Government to inject sh11b in cooperatives

By Henry Sekanjako

Government is seeking an additional funding of sh11 billion to facilitate and support cooperatives revival and development in the country, as one way to boost value addition and marketing of agricultural produce.

The request is contained under the unfunded priorities by Ministry of Finance for the financial year 2012/2013.

According to trade Minister Amelia Kyambadde, government views cooperatives as being central in mobilizing and organizing farm-level production, value addition, marketing, savings and financial intermediation at all the local levels.

"The Cooperative sector occupies a significant position in the economy with enterprise that cut across all sectors including transport, agriculture, industry finance, energy, housing and tourism," Kyambadde said.

The minister sees it is a means through which productive enterprises involving indigenous entrepreneurs can be built at all levels.

She said this on Tuesday before the Parliament's committee on tourism, trade and industry where she appeared to seek approval of the trade ministry's budget amounting to sh56b for the financial year 2012/2013.

Kyambadde noted that the cooperatives sector has the potential to increase export revenues, improve peoples' purchasing power and minimize income inequalities through diversifying the range of value added products and accessible financial services.

She added that cooperatives promote increased efficiency in management and competitiveness of the economy through technical skills transfer which she says present great prospects for a higher rate of economic growth and poverty eradication.

The minister told the committee that the National Warehouse Survey (2007) showed that there are 866 warehouses with a total storage capacity of 450,733 metric tons, but only 3% of the warehouses met the standards for storage of agricultural commodities, while 8% only required minor repairs.  

According to Kyambadde, the cooperatives sector has been faced with challenges of an inadequate legal and regulatory frame work, poor storage facilities and other infrastructure and insufficient knowledge on co-operatives by communities.

"The ministry is currently reviewing the Cooperatives Act (1991) and principles for the amendment and these are still under draft," she said. 

Kyambadde added that; "These amendments are intended to address the current policy and legal challenges facing the revitalization process of the cooperatives movement."

In 2011, government put in place a national cooperative policy which gives an elaborate policy direction for the cooperative subsector.

Kyambadde demanded that the budget allocations be seen to match the required efforts for revitalizing the entire cooperative movement across the board.

The committee supported the cause saying it would help in fighting poverty among the local people.

"Despite the problems cooperatives have been facing, we must step up the funding for the cooperatives," said committee chairman, Stephen Kagwera.

Currently there is only one active cooperative union Bagisu Cooperative which is in the eastern part of Uganda.