Connect with us

Create own bank, farmers told


Create own bank, farmers told

Participants at the Financing Agriculture conference pose for a photo at Speke resort Munyonyo. How to turn rhetoric into action remains the chalenge

Participants at the Financing Agriculture conference pose for a photo at Speke resort Munyonyo. How to turn rhetoric into action remains the chalenge

Farmers should rise from slumber and start pooling resources to start their own bank rather than rely on the government or commercial banks to provide the much-needed funds for investment into the agricultural sector.

This was a widely shared view among farmers, agri-business entrepreneurs and leaders of community-based organisations at a conference on Financing Agriculture in Uganda that was held at Speke Resort Munyonyo this week.

The meeting was convened by the Uganda Agribusiness Initiative (UAI) led by former agriculture minister Victoria Ssekitooleko in collaboration with the New Partnership for Africa’s Development (NEPAD).

Ssekitooleko argued that whereas the government has brought many fantastic proposals on funding agriculture in previous badgets, there is little to show for it in terms of visible agricultural projects or an increase in the number of agribusinesses in the country.

Ssekitooleko said: “We know the government put billions of shillings under the Agricultural Credit Facility in commercial banks with the view to enabling borrowers access it at about 12% interest. But when a farmer goes to the bank, the loan managers make sure they tell you about their commercial products on which they charge 25% instead of offering the low interest facility.”

David Kyeyune, who works with VECO, an NGO based in Eastern Uganda, argued that politicians are more interested in votes than transforming the agricultural sector. He strongly advocated for the establishment of a farmers’ bank by farmers themselves.

Kyeyune said: “Centenary bank was started through contributions by ordinary people, see where it is now. It is possible for farmers to start their own bank instead of lamenting about government neglect.”

Kyeyune was supported by Julian Omalla, the proprietor of the Juice company Cheers Uganda Ltd, who said it is almost impossible to succeed in any serious agricultural venture using costly commercial loans in Uganda.

“We need to organise ourselves and have our own bank. There is no hope from commercial banks.”

For Ssekitooleko, improving access to credit for agriculture in Uganda needs the active participation of government, the donor community, researchers, financial institutions but with leadership by the farmers.

In this perspective, Ssekitooleko’s AAI has championed the creation of the Uganda Agricultural Investment Platform, a group of organisations and agri-business associations with interest in the agricultural sector.

Chaired by the Dutch NGO SNV, Ssekitooleko says the platform will push for policies that promote increased investments into the agricultural sector.

The platform, according to Ssekitooleko will define priorities for investments into the sector through a bottom-up approach that puts farmers’ needs at the heart of decision making.

With a membership of 17 groups such as the Horticultural farmers association, Uganda honey producers association, The Uganda Agricultural Investment Platform, according to Ssekitooleko is open to other groups such agro-chemical dealers.

At the conference, President Yoweri Museveni’s government was criticised for paying lip service to agriculture.

David Mudooli a Lecturer at Kyambogo University and former Executive Secretary of the Inter-Governmental Authority of Development (IGAD) blasted the government for relegating the agricultural sector despite what he termed as the lifeblood of the country.

“Agriculture must be taken as a special project, more like roads or power. If the government was serious about agriculture, it would have created an special fund similar to the road fund, instead of pushing farmers into commercial banks, said Mudooli.

Other participants criticised the government’s heavy reliance on domestic borrowing which has resulted into an escalation in interest rates for government debt products such as treasury bills and treasury bonds.

Because of the high rate of returns (about 15percent) on treasury bonds, commercial banks are attracted to lend to government than the more risky and longer term projects in agriculture.



Continue Reading
You may also like...

More in Business

Advertisement solar



To Top