Sunday, October 1, 2023
Home Agribusiness Experts Dialogue On Value Addition Challenges

Experts Dialogue On Value Addition Challenges

by Jacquiline Nakandi
0 comment

By Nelson Mandela Muhoozi

The bulk of traded agricultural products from Uganda are in raw form implying that there is limited value addition.

This is partly attributed to the poor linkage between Research and Development institutions and the agro-value addition industry, according to Prof. Sarah Ssali, the Dean at Makerere University in the Department of Women and Gender Studies.

Ssali, who was remarking during one of her media appearances this week, argued that value addition in the country is at its minimum both in terms of scope and breadth due to a shortage of postharvest and value addition technical specialists and inefficient knowledge transfer from research stations to extension services.

“The only way to correct the issues in the sector is ensuring that every structure of government in the sector is working. There is a knowledge gap on the ground level. There is a need to provide farmers with the right information because this knowledge hardly reaches the ground where farmers are situated,” she noted.

Ssali also highlighted the issue of storage infrastructure, noting that “farmers sell everything at harvesting and this is because of storage challenges. Someone has to take the responsibility and act.”

Prof. Yusuf Byaruhanga, a food scientist from Makerere University said there is quite a lot that is not right along the agricultural value chain including inadequate agricultural supplies to feed value-addition operations.

“We are largely dealing with smallholder farmers who are stressed with market dynamics and this means that if an off-taker from Kenya offers just sh100 over and above what the local market offers, then everything will be swept off and you will have nothing to supply for those doing processing,” Byaruhanga noted.

According to him, there has to be a sustained supply in order to have continuous processing in the sector. 

“But because the way the system operates is not favourable, value addition becomes a challenge,” he said.

However, Ssali said the issue is that every farmer is growing everything.

She argued that zoning would solve a number of issues in productivity by ensuring that areas with comparative advantage can be supported to grow certain crops or rare animals.

She said farmers need to be supported to grow what they can manage but more efficiently. 

“When you specialize and grow what you are advantaged to, you will get better skills and produce efficiently and this is what farmers from Israel do.”

Embracing technology in agriculture

The Minister of State for ICT and National Guidance, Hon. Godfrey Baluku Kabbyanga said farmers must embrace technology and new modes of farming to increase productivity and efficiency.

He also emphasized the need to associate so that they can be able to do bulk production and supplies in order to increase their bargaining power.

“We see a lot of silo operations in the sector. Farmers need to be organized if we are to see progress. When farmers are more organized, they become a bigger force when it comes to accessing the market,” he said.

However, Ssali said the projects that the Government invests in must connect to the people. 

“A lot of projects are being built around value addition but farmers are not connected to farmers.”

This, she said is the reason Uganda’s value addition sub-sector is still in its infant stage albeit there is enormous potential for expansion and growth.

Dr Atim Agnes, Amolatar Woman Member of Parliament expressed the need to identify the needs of the farmers first.

“Agriculture is an eco-system. It’s not that when you solve value-addition issues you have solved other issues. Sometimes the subject is farfetched because you will find that farmers need to travel 200 miles to access a maize milling machine,” she noted.

She added, “As we encourage value addition, we should enable the farmers by providing subsidies and developing an infrastructure that facilitates the value addition we are talking about. And the other issue is that the market is also full of cartels and this is a huge problem. We need market linkages for what the farmers produce.”

Opportunities in Agriculture Value Addition

Dr. John Bahana a consultant in value addition said that value addition is a simple thing that can be done from any stage in the agriculture value chain. 

“Even washing your cabbage and packaging it is a value addition. However, our farmers cannot even do these simple value addition things because they are largely not aware of what value addition means,” he noted.

“Other countries like Kenya have adopted value addition for their agricultural produce unlike in Uganda. We need to help the farmers at every stage so that they can appreciate the benefits in value addition,” he said.

While the Ugandan Government is pushing for greater commercialisation of agriculture by encouraging the use of irrigation, value addition and mechanised farming, Bahana said there is a need for policy guidelines that prohibit selling grain maize to Kenya as more money is earned when you add value.

In addition, he said farmers need to be trained in value addition but also, revive the cooperatives, and the district farm institutes and ensure that technical institutions have value addition centres where farmers can go and learn value addition in different aspects.

Atim said that farmers need to be taught to appreciate farming as a business. 

She said that with the limited resources, there is a need to do the right things and ensure that the sector is well funded.

“We should not stop at production. We need to invest in the technology, the market and all other processes in the system because when we invest in agriculture you will be increasing the productivity and production,” she said.

According to Atim, when the farmers get more money their purchasing power will increase and since the majority of the population (70 percent) is engaged in agriculture, the economy will be boosted.

Agriculture financing

Although commercial bank shilling-denominated lending rates reduced to 18.76 percent in March 2023 from 20.24 percent recorded the previous month according to the ministry of finance, experts in agriculture say the rates are still unbearable.

Agriculture financing is less attractive due to the seasonality of cash flows, lack of or no financial records, and small loan sizes for smallholder farmers.

Kabbyanga said that the Parish Development Model is a solution to the challenge of financing as the money targets parish-level farmers.

Atim said that there is money to finance the sector, only that it just needs to be collected from wherever it is scattered in different programs like agriculture credit facilities into one pouch like a cooperative bank which is able to understand the challenges farmers face.

With this bank that understands farmers’ needs, she said they will be able to access cheap credit to maximize production and even do value addition to earn more from their products.

GDP from Agriculture in Uganda averaged sh6314.71b from 2008 until 2023, reaching an all-time high of sh10729.98b in the third quarter of 2021 and a record low of sh1994.51b in the first quarter of 2008.

You may also like

Leave a Comment

Download Vision Group Experience App

Follow Us

All Rights Reserved © Harvest Money 2023