Minister for Trade, Industry and Cooperatives, Amelia Kyambadde has said that government is set to purchase maize produce from farmer cooperatives as a way to reduce on the surplus produce that resulted from a number harvest.
Kyambadde said that the excess production of maize in the first of the two seasons in 2018 has resulted into price fluctuations. Domestic prices for ungraded maize grain in the first season ranged between Shs 450 to Shs 800 per kilogram in the main urban areas.
However, the farmer gate price stood at only Shs 300.
“These cyclic fluctuations in agro commodities prices are not accidental. At the peak of harvest of crops, mainly cereals and grain prices tend to decline gradually or drastically due to a number of reasons,” Minister for Trade, Amelia Kyambadde told journalists on Tuesday during a news conference.
She outlined; bumper harvest, undefined prices due to lack of market information, constant decline of demand from traditional consumers, acute lack of standardized storage facilities as some of the drivers of the price slump.
“In the immediate term, the Ministry of Finance has offered to release funds through the agriculture credit facility as crop finance to be able to buy the produce which have been harvested from the farmers,” said Kyambadde but did not give a figure of the funds.
She however said that under this arrangement, government will only prioritize farmers who are organized in cooperatives.
“We urge farmers to organize themselves more in cooperatives and associations, and to register with the district commercial officers. It will be easier to buy from you if we know where you are or if you are in group, instead of buying from individuals,” the Minister added.
She said that “We are also opening up borders for the sale of our maize to neighbouring countries, so that people can sell to anybody who comes in. This way, we can sell the surplus that is on the market”.
Experts in agriculture opposed to this idea suggest that government should instead focus on establishing more silos and warehouses where such surplus would be purchased and stored for future emergencies.
In line with this, Minister Kyambadde revealed that the Uganda Warehouse Receipt System Authority (UWRSA) plans to immediately license 7 storage facilities which have so far applied for Public Licensing and have satisfied certification requirements.
Two of these facilities are situated in Jinja with a total capacity of 21,000 metric tonnes, 1 is in Mbarara (5,000 tonnes), 2 in Kasese (2,000 tonnes) while the other two are in Mubende (10,000 tonnes) and Kamwenge (6,000 tonnes).
The Minister asked all individuals and entities that own storage facilities near production centres to open them for the public to deposit as well as to render drying, spring, grading and general quality services to the public.
In the medium and long term, Minister Kyambadde said, government plans to review related policies, particularly to operationalize the National Grain Trade Policy, the Warehouse Receipt System as well as revising the Agriculture Produce Marketing Bill.
She said as well that there are plans to increase the number of storage facilities for agriculture produce across Uganda as ways to mitigate the problem of price fluctuations.
The warehouse receipt system was established with an aim to facilitate commodity trade and financing, promote strategic marketing, improving and standardizing storage for agricultural commodities.
So far, 192 storage facilities have been profiled and inspected across the country, with a total capacity of 356,051 metric tonnes. Out of these facilities, only 47 (24%) met the requisite standards for storage of commodities as per the Warehouse and Warehousing Standard of Bagged Cereals and Pulse (US 1648:2018).
Statistics from the Uganda Warehouse Receipt System Authority indicate that in the first season of 2018, Uganda exported maize amounting to 338.8 million metric tonnes within the East African Community worth Shs 256.4 billion. The biggest volume (272 million metric tonnes) was exported to Kenya.
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