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Inflation level is unacceptably high!

By Vision Reporter

Added 22nd April 2008 03:00 AM

EDITOR—I am deeply disjointed with some of our politicians saying that increased prices are good for the Ugandan manufacturers and farmers.
The current inflation level is unacceptably high and calls for urgent steps by the government to keep it under control.

EDITOR—I am deeply disjointed with some of our politicians saying that increased prices are good for the Ugandan manufacturers and farmers.
The current inflation level is unacceptably high and calls for urgent steps by the government to keep it under control.

EDITOR—I am deeply disjointed with some of our politicians saying that increased prices are good for the Ugandan manufacturers and farmers.
The current inflation level is unacceptably high and calls for urgent steps by the government to keep it under control.

It is the responsibility of the government to ensure also that the uncertainty in the global system does not harm our growth process.

Higher prices erode consumer spending, one of the motors of economic growth and triggers a reduction in savings.
Most of our farmers are engaged in subsistence farming so the rising prices returns may not trickle down to our farmer’s real incomes in the rural economy. The majority of our people compared to the people in developed countries still lack essential commodities so any increase in price may deter our population from accessing these essential products.

The raising prices will also hurt most of the government
programmes like ‘Boona bagaggawale, UPE, USE, slow down poverty alleviation, impede economic growth and retard employment generation. President Museveni has always been talking about building a middle class. While the increase of prices may favour the farmers, it will hurt some sections of the middle class. In order to sustain economic growth our country has enjoyed since the early 90s, we have to get the prices and politics right. There are no shortcuts because food prices are the kingpin of the price structure.

A steep rise in food prices will make inflation control more difficult and can thereby hurt the cause of macro-economic stability. The surging global food costs are not a temporary phenomenon but likely to continue until 2015 for most crops, according to
the World Bank president, Robert Zoellick.

so this calls for revitalising the agricultural sector. Violent and deadly demonstrations have broken out in several nations like Haiti, Bangladesh and Guinea Bissau. The Government has to arrest the decline and investment in agriculture, as compared to other sectors of the economy because agriculture is growing at slow rate of 0.9% while others like the industrial sector is growing at 21%. Institution, capacity building and empowering farmers through investment are the kind of interventions we must seek.

Even in promoting agri-business and agro-industries, we need a model that can combine the economics of small farms with the economics of mass production and modern marketing.
We need to focus on the economics of farming operations as a whole, not of individual crops alone.

In the final analysis, what our rural households need is higher investment in land development, in water management, in seed technology, in output storage and in marketing and investment in rural infrastructure, sound macro-economic policies designed to raise savings and high productivity.

Henry Mugisha Rodney
kampala

Inflation level is unacceptably high!

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