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

Table: 2.30: Major barriers to entering brokerage business
Barrier Yes No
Lack of access to stall 76% 24%
Shortage of working capital 90% 10%
High cost of renting stall 81% 19%
High level of taxation 75% 25%
Difficulty in processing license 37% 63%
Lack of contact and trust with
39% 61%
regional traders
Source: Survey, 2002.
The sample brokers were also asked to rank the problems of the central market on a fourpoint
scale: (1) no obstacle, (2) minor obstacle, (3) major obstacle, and (4) very severe
obstacle. The mean scores of major marketing problems are given in Table 2.31. On the basis
of the mean scores, the major problems of grain marketing at the central market include
expensive rent for stalls, lack of access to operating premises, high tax rate, congestion at the
marketplace, and poor tax administration. There is a need for government intervention to
correct these deficiencies and create an enabling environment for brokers.
Table 2.31: Mean score of major marketing problems
Problem
Extent of obstacle
Poor telecommunications 1.96
Lack of electricity 1.48
Lack of transportation 1.84
Poor access to operating place 2.96
High tax rates 2.70
Poor tax administration 2.54
Lack of standards 1.73
Unlicensed operators 2.45
Weak legal system for contract enforcement 1.88
Congestion at marketplace 2.58
Expensive stall rent 3.39
Long procedures for licensing and registration 1.73
Limited access to credit 2.13
Crime, theft, disorder and lack of trust 1.96
Anticompetitive practices 1.64
Weak access to market information 1.43
Source: Own computation.