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

Table 2.16: Have you faced disputes with buyers in the past
three years
Brokers’ response Number %
Yes 52 77.6
No 15 22.4
Total 67 100.00
Source: Survey, 2002.
Lack of grading provides an additional edge to buyers in the process of bargaining. Buyers
often dispute grades set by brokers or regional traders. Because of the pressure to sell,
brokers often agree to the lower grade asserted by buyers. In fact, about 59 percent of the
sample brokers indicated that the quality of grain is determined by buyers, and only 25
percent indicated that quality of grain is determined through negotiation. Large-scale buyers
certainly have a stronger position vis-à-vis the brokers, especially when there is excess supply
in the market.
2.2.4. The role of transporters
On average, transporters wait for two to three days until the grain is sold at the central
market. About 97 percent of brokers reported that transporters press brokers to sell the grain
as quickly as possible. Apart from the opportunity cost of losing working time, many
transporters want to avoid costly hotel bills when they stay in Addis Ababa. Besides bringing
grain to the central market, truck drivers are often responsibile for delivering the money from
brokers to regional traders. About 48 percent of the brokers send money to regional traders
though truck drivers (Table 2.17).
Table 2.17: Do brokers send money for regional
traders via transporters
Response Number %
Yes 32 47.8
No 35 52.2
Total 67 100.0
Source: Survey, 2002.
About 53 percent of brokers do not assume any responsibility if money sent through drivers
is lost (Table 2.18). Others (47 percent) reported taking responsibility for money lost in the
process. Nonetheless, there is no legal means to enforce payment in all cases (no written
contract), and the ultimate losers are regional traders. The main reason for using transporters
to transfer money is absence of a banking service (Table 2.19). Fortunately, the majority of
brokers (94 percent) experienced no incidence of fraud by transporters. Only 6 percent of
brokers reported that they have faced betrayal by transporters (Table 2.20).