Farmers doubt SACCOs

Sep 15, 2008

Farmers and food rights activists have doubted the ability of savings and credit cooperative societies (SACCOS) to boost household incomes.

By Francis Kagolo
Farmers and food rights activists have doubted the ability of savings and credit cooperative societies (SACCOS) to boost household incomes.

They said loans granted by most of the SACCOS carry a short grace period, which in most cases end before the harvest season.

“Under SACCOS, one must pay back the loan within six months. This is incompatible with farming and animal rearing,” said Maimuna Kiwanuka, a banana and vanilla farmer in Mukono district.

Kiwanuka explained that since most crops and animals take long to grow, farmers needed long-term loans with a four-year grace period, which most SACCOS could hardly offer.

He made the remarks during a workshop organised by the Food Rights Alliance, a local charity, at Hotel Africana in Kampala.

Over 300 farmers from different parts of the country attended.

The Prosperity-For-All (Bonna Bagaggawale) programme funds, which are aimed at fighting poverty household poverty, can be accessed through SACCOS at each sub-county.

Farmers decried the high interest rates on the loans and the capital required before one gets the credit.

They said SACCOs levy 13% interest on the loans.

“SACCOS can help small businessmen unlike farmers,” said Sarah Kaweesi, a member of Wakiso District Farmers’ Association.

The participants urged the Government to increase funding to the agricultural sector to avert poverty and food shortage.

Under-funding of the sector, they noted, had affected the development of farming areas.

Quoting a recent UN report on Uganda’s human development, Onesmus Mugyenyi, the executive director of Advocates Coalition for Development and Environment, said agricultural productivity had gone down by half in the last 20 years.

“Agriculture GDP declined from 5.6% in 1999/2000 to -0.6 % in 2005/2006. We only had a minimum recovery to 1.9% in 2006/2007,” he said.

This financial year, the Government reduced the national budget share of the sector from 4.2% to 3.8%.

Julius Musimenta, the Wakiso district coordinator for the Agency for Integrated Rural Development, condemned the Government for delaying to implement the Maputo (2004) and Dar-es-salaam declarations on Agriculture.

Under the two accords, on which Uganda is a signatory, African governments committed themselves to increasing funding to the agricultural sector to at least 10% of their respective national budgets by 2010.

“The 3.8% share allocated to the sector this fiscal year is inadequate. If the Government is serious about agricultural development, let it increase funding to the sector.”

Agriculture employs over 80% of Uganda’s population.

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