There are disconnects between commercial farmers and Operation Wealth Creation. How are you dealing with this challenge?
Operation Wealth Creation (OWC) has had its challenges and we are not shy to admit it. Already, we are trying to link the two—cooperative and OWC. What we are trying to achieve here is efficiency in service delivery. In other words, we will not just ensure that cooperatives are on board but also have them involved in the implementation of OWC activities.
Inputs and services will now be distributed to organised cooperatives and enterprises. For example, a cooperative made up of coffee farmers will get focused attention in terms of getting the right inputs and the necessary support from us.
With such involvement, we believe the reward will be huge both in terms of yields, market access and income to the farmers.
This will boost cooperatives savings given that they do not make profits. The savings realised, that is if they work as one large, focused unit, can then be used to address their problems.
Farmers and middlemen are like couples trapped in a bad marriage. Cooperatives are not doing any better either. How are you going about this conundrum?
Most farmers, some of whom are members of cooperatives, have fallen prey to middlemen. Normally, it is the middlemen who advance them some money which they use for procuring pesticide and other agricultural inputs. As a result of this, the middlemen hold them hostage and dictate to them even the kind of crops they should plant!
This is something we are looking to deal with. Importantly, we are already working towards minimising post-harvest losses. About 25 per cent is lost in post-harvest handling alone. We are already working with farmers in setting up their stores. We want every homestead to have a granary as it used to be in the olden days.
Warehouse receipt system is also something that we are already involved in, and this will ensure best prices for crops. So, there will be no need for the middleman. Receipts issued by the warehouse to farmers can act as a bank guarantee, bailing out farmers when in need of money.
Despite huge potential, farming is still a low paying business. As a ministry, how are you going about this challenge?
Our policy on value addition is clear. We have to add value to our produces. Why should we export raw maize yet we can first turn it into maize flour? We already have a wide regional market, including Common Market for Eastern and Southern Africa.
We are also spending a lot of time ensuring that we increase the volumes of our productions and this is where the cooperative comes in handy.
Access to credit has always been an issue to players in agricultural sectors, especially farmers, no matter whether they are a cooperative or simply lone commercial farmers. For how long will this continue?
It is true that commercial banks do not lend to farmers. This could be because of the perceived risks involved. We have resolved to revive the Cooperative Bank. President Museveni has given us a go ahead to already on this. The President says the farmers should have a cooperative bank.
Already, a petition in this regard has been presented to the Speaker of Parliament. Now we want a liquidation report from the Bank of Uganda. This will reveal the cause of the collapse of the Cooperative Bank where all cooperatives had shares. You may also want to know that Uganda Cooperative Alliance is spearheading this development.
This development is important because once this comes to fruition, the issue of cost and access to credit to farmers, some of whom are members of cooperatives, will be solved.
Cooperatives will be the winners because they will be able to access loans at low interest rates. We are also looking at having the cooperatives recapitalise the bank with their savings. As government, we shall regulate and monitor the bank.
Is that all the government can do to a sector providing livelihood to the largest segment of the population?
Government will provide nearly Shs60 billion in compensation of the bank’s affected properties which will be used to recapitalise the bank. Most of the Cooperative Bank properties were either lost or destroyed when Uganda was going through political insurgencies.
This will be in addition to recapitalising Uganda Development Bank, another opportunity for enterprises, including farmers and Savings and Credit Cooperatives (SACCOs).
What are the challenges the sector, particularly cooperative is grappling with?
We have seen cooperatives with where members’ savings have been squandered and in some instances stolen through fraud and corruption, a tendency we are totally against and want to end. This has been escalated by numerous court cases as a result of leadership wrangles involving the members.