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

Table 2.27: Respondents’ opinion about government support
No
Area of government support Improved improvement
Transport facilities and access 16.4% 83.6%
Telephone and other
46.3% 53.7%
communication services
Security and legal services 16.4% 83.6%
Support for traders’ association 7.5% 92.5%
Source: Survey, 2002.
Brokers also claimed that the level of taxation is high. About 95 percent reported that the rate
of taxation is extremely high and discourages grain trade (Annex Table 2.26). In addition, the
method of tax assessment was viewed as unfair (Annex Table 2.27).
2.4.2. Dispute settlement
As already described, grain trade involves credit transactions, and disputes over payment are
common. Disputes may also arise over quantity, quality, and prices between a regional trader
and a broker or between a broker and a buyer. Since there is no written agreement, it is
difficult to enforce payment through the court system. The most common ways of settling
disputes are peer pressure (69 percent) and personal effort (40 percent). About 85 percent of
the sampled brokers reported that disputes are not resolved (Table 2.28). Brokers appear to
operate with no legal protection and virtually no recourse to courts. The trading environment
is extremely risky for brokers and regional traders. Consequently, there is very limited chance
for the market to grow beyond cash-based spot markets or the physical cash market.
Table 2.28: Means of settling disputes with clients
Means Yes No Total
Keble courts 2 (3.8%) 50 (96.2%) 52
Woreda and higher courts 5 (9.6%) 47 (90.4%) 52
Association arbitration 2 (3.8%) 50 (96.2%) 52
Community mediation 5 (9.6%) 47 (90.4%) 52
Friends and peers 36 (69.2%) 16 (30.8%) 52
Religious fathers 5 (9.6%) 47 (90.4%) 52
Personal effort without any 21 (40.4%) 31 (59.6%) 52
arbitration
No resolution 44 (84.6%) 8 (15.4%) 52
Source: Survey, 2002.