Revival of co-operatives will raise farmer incomes

By Marie Nanyanzi

When Finance Minister Matia Kasaija said recently that Uganda's economy had slowed down due to the prolonged drought, there was hardly any public debate about it. Like a footnote in a huge government policy document, Kasaija's assertion attracted little attention.

To be fair to the minister, this is not the first time Uganda's economic fortunes have been hedged on a stroke of luck of the rains. Bank of Uganda has in the past pointed to drought being behind the shortage of food, which in turn sparks off inflationary pressures and ultimately weaker economic growth figures.

However, when it comes from Kasaija, who is in charge of the fiscal policies, the excuse of drought hampering economic growth suddenly becomes loaded. It means at least three things: poverty in rural areas, where much of Uganda's agriculture takes place, is set to go up; the lack of more irrigation schemes is a problem that needs to be resolved quickly; there is a need for a policy shift towards agriculture, especially one that incorporates the role of co-operatives.

The situation does not look good. More Ugandans are struggling to put food on the table, according to official government data, with a larger number of the population living on less than two dollars a day.

Just over two out of 10 people in Uganda - or 21% of the population - live on $1.25 a day or less, according to the 2016/2017 Uganda National Household Survey, the latest official data available. This is an increase from the 19% recorded in a similar survey in the year 2012/2013.

Poverty is a social condition characterised by lack of access to food, clothing and shelter.

According to a recent nationally representative survey of Sauti Za Wananchi, a nationally representative data collection initiative that uses mobile phones, one of the most serious problems facing Uganda is poverty. The number of citizens citing this has more than doubled to 29% in 2018 from 14% in 2017.

Agriculture in Uganda continues to suffer from climatic variations and farmers often lack information and resources on how to cope through these challenges.

The question remains on how to build resilience among the farmers to enable them to cope amidst drastic weather changes. Are there alternatives for poor farmers to take on irrigation? Do we have enough storage or processing alternatives to cater for the bumper harvest to guard against erratic price changes?

A World Bank report titled, Closing the potential-performance divide in Ugandan Agriculture 2018, notes that there are different players (farm groups, traders, associations) who play a role in shaping the sector but do not effectively represent the interests of the smallholder farmers.

One of the key safeguards for the smallholder farmers were the cooperative unions. But many of those have since collapsed. Notably, Bugisu Co-operative Union remains active, boosting and sustaining coffee farmers in mainly eastern Uganda.

There is some effort to revive co-operative unions such as putting in place a law that offers a conducive environment for them to thrive. This is critical in mobilizing farmers. The situation is beginning to improve with about 10,000 cooperatives being registered recently (World Bank, 2018).

Farming in Uganda contributes about 24.2% to the GDP, according to the Uganda Bureau of Statistics. Being the occupation where most Ugandans gain their source of livelihood, this is crucial to the growth of the economy and ensuring food security. The reliance on rain-fed agriculture continues to leave Ugandan farmers vulnerable to climatic shocks.

Data from the Sauti za Wananchi indicates that compared to other occupations, farmers are more likely to face financial-related setbacks. They are more likely to have a family member drop out of school or lose a family member due to financial reasons.

SACCOs and cooperative unions could play a critical role in providing safety nets for farmers. A clear example is where members can borrow soft loans from their SACCOs, while farmers can use their produce as security to secure funds to solve short term pressures such as paying school fees. Currently, half of the population will turn to friends and family, in an environment where only one household out of five says they have enough income to only cater for their daily needs.

The writer is a social scientist at Twaweza East Africa