The Future of Smallholder Farming in Eastern Africa - Uganda ...

• Transport constraints (poor road network, high transport costs, and poorly maintained
roads);
• Storage constraints (lack of storage capacity, high storage costs, and lack of
appropriate storage technologies);
• Inaccessible market centers and inadequate marketing facilities in the market centers;
• Lack of accurate and reliable market information;
• Lack of capital and access to credit;
• Unclear and uncertain government policy;
• Insecurity; and
• Nonenforcement of contracts, grades, and standards.
Poor infrastructure raises marketing costs; licensing requirements hinder entry into maize
trade; unavailability of credit limits traders’ access to working and investment capital; while
unclear and unreliable government policy creates unwarranted uncertainty in the maize
subsector.
4.2 Policy Recommendations
The following policy recommendations are drawn from the results of this study:
Reduce transport costs: The government must take positive steps to overcome high
transport costs. Long-term policies should focus on investing in transport infrastructure.
Systems should be developed to lease transport facilities (such as trucks, etc) to farmers and
farmers’ associations (to be encouraged) and rural traders to move maize from remote areas
to local markets and assembly points. Medium- and long-term investment loans for the
purchase of means of transport should be made available to traders.
1.Increase storage capacity: In the short term the storage capacity owned by the NCPB
should be leased to the private sector under favorable terms. In the long term investment
in on-farm and off-farm storage facilities by the private sector should be encouraged and
supported. Another important area of government support in maize storage is research
and extension in post harvest technology to help traders avoid storage losses as well as to
ensure the sale of maize when the prices guarantee profitable operations.
2.Improve market facilities: Wholesale maize marketing sites should be developed at major
regional nodes, and market facilities and assembly points should be created in the rural
areas near the major transport routes. Local governments should supply adequate
marketplaces and marketing facilities as a service, by using revenues from fees usually
collected from the traders.
3.Provide accurate and reliable market information: Accurate information on price,
supply, and demand situations needs to be collected from the emerging central markets
and relayed to market participants in a timely fashion. The Agricultural Information
Service of the Ministry of Agriculture should receive adequate budgetary allocation to
allow it to perform this role. The Ministry of Agriculture and farmer organizations could
provide long-term outlook information. Availability and improvement in
communications infrastructure, especially in the rural areas, should receive more attention
from the government.
4.Increase access to credit: Government should encourage the development of nonbank
institutions (including traders’ and farmers’ organizations) with expertise in lending to
farmers and agribusiness, which more conventional lending institutions find too risky.
Lending by financial institutions to small-scale traders and farmers could be encouraged
by government underwriting of such credit schemes.