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

Like brokers, retailers use cash or credit sales to dispose of their stock. In recent years credit
sales have become important. For instance, about 40–59 percent of teff was sold on credit
during the month of February 2002. The figures for wheat and maize ranged from 29 to 36
percent and 29 to 32 percent, respectively (Table 3.6).
Table: 3.6: Mode of sale for most recent sale
% of sales via
Crop type Cash Credit
Adda teff 60.4 39.6
Wollenkomi teff 57.0 43.0
Gojjam/Bechena teff 40.9 59.1
Wheat, grade 1 70.7 29.3
Wheat, grade 2 64.2 35.8
Wheat, grade 3 68.0 32.0
Maize, white 70.2 29.8
Maize, mixed 67.8 32.2
Source: Own computation.
As already noted, credit sales to customers involve risk in the sense that debtors may refuse
to pay back. About 79 percent of the retailers reported losing money in the preceding three
years as a result of defaulting customers (Table 3.7). On average, retailers lost birr 1,722.3
over the preceding three years. Retailers did not take defaulters to court, mainly because they
had no written agreement. Other reasons included unknown address (23 percent), delays in
court decision (15 percent), and lack of money and time (11 percent) (Table 3.8).
Table: 3.7: Money lost due to credit sales and defaulters over the last three years
Response Number %
Yes 84 78.5
No 23 22.5
Total 107 100.00
Source: Survey, 2002.
Table 3.8: Reasons for not taking defaulters to court
Reason Number %
Unknown address 17 22.7
Delays in the court decision 11 14.7
No written evidence 28 37.3
Lack of money and time 8 10.7
Fear of social sanction 4 5.3
Others 1 1.3
Source: Survey, 2002.