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Uganda Coffee Bill 2018 finally passed

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Kampala, Uganda | Parliament has passed the National Coffee Bill, 2018 that provides for registration of coffee farmers by the Uganda Coffee Development Authority (UCDA).

The registration of farmers will entail capturing details of the size of land, number of coffee trees, particulars of a farmer, coffee buyers, sellers and nursery bed operators.

Parliament however rejected a clause to de-register coffee farmers who fail to meet standards set by Government. In addition, a two year jail term for a farmer who fails to take good care of their coffee plantation was also rejected by members.

The National Coffee Bill, 2018 was passed by Parliament sitting on Wednesday 5 August 2020. The Bill repeals and replaces the Uganda Coffee Development Authority Act, Cap. 325, which was enacted in 1991 and only covered off-farm activities of marketing and processing, leaving on-farm activities like planting materials, nurseries, harvesting and post harvesting handling outside the scope of the law.

According to the Bill, registration of farmers will be free and each registered farmer will be given an identification number.

The Bill provides that for a person to be registered, “he or she shall either be growing coffee at the time of registration or shall have proof of his or her intention to commence growing coffee within a period of six months, from the date of registration.”

MPs also opposed the proposal to have UCDA evaluate land where coffee is to be grown to determine whether or not it is suitable for coffee growing.

The Bill aims at reforming the law to provide for Uganda Coffee Development Authority (UCDA) to regulate, promote and oversee the coffee sub-sector and to regulate all on-farm and off-farm activities in the coffee value chain.

The Bill will help in comprehensive planning for coffee farmers when it comes to linking buyers and farmers, setting up irrigation systems, provision of planting materials and extension services.

National Coffee Bill 2018 by The Independent Magazine on Scribd

Coffee Uganda’s number 1 export
Coffee is a significant source of income for farmers and export earnings to many nations including Uganda. In Uganda, coffee remains the leading export crop employing more that seven million people equivalent of 1.7 million households in over lOO coffee growing districts.
Uganda strengthened her position as Africa’s top coffee exporter with a record 5.06 million (60kg) bags in the financial year 2019/20. All indications are that Uganda, 8th in the world, could also overtake Ethiopia as Africa’s top coffee producer.
Export earnings also reached an all-time new level of US$494 million (Sh 1.8 trillion). Coffee exports for 2018/19 amounted to 4.18 million bags worth US $416 million compared to 4.45 million worth US $492 million the previous year
The National Coffee Bill aims to enhance the production of coffee as Uganda aims to produce 20 million bags by 2030.

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SOURCE: Parliament Uganda Media

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Smallholder Farmers Can Now Access Agricultural Credit Facility Without Collateral

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The Agricultural Credit Facility (ACF) has devised a path-breaking innovation of block allocation to enable farmers access loans based on alternative collateral such as chattel mortgages, cash flow based financing, and character-based loans, among others, Dr. Michael Atingi-Ego, Deputy Governor, Bank of Uganda, has revealed.

“This innovation is unlocking access to credit in areas with communal land tenure; and most especially, for micro and smallholder farmers who are otherwise excluded for lack of collateral to secure credit.

“By September 2020, the ACF had advanced UGX 2.8 billion to 187 small and micro borrowers with non-traditional collateral under block allocation,” he said.

The ACF is administered by the Bank of Uganda on behalf of the Government of Uganda.

The Deputy Governor said that through this innovation, the ACF working with the participating institutions, has extended loans of up to UGX 20 million to small-scale farmers.

He further said that block allocations support financial inclusion and advance equity in economic activity by serving women and youths with limited property rights.

Dr. Atingi-Ego made the remarks just before he a launched the 2020 Agricultural Finance Yearbook at Imperial Royal Hotel, Kampala on Tuesday.

The Agricultural Finance Yearbook  has produced by the Economic Policy Research Centre (EPRC) since 2014/15.

The yearbook contains several agri-financing models for various commodities such as rice, dairy, coffee, among others. The models have some standard features:aggregation of producers for economies of scale, functional linkages between value chain actors (input distributors, extension agents, agri-markets information providers, producers, storage units, marketing agents, processors, financial service providers, wherein some players are ‘lead agents’ in the segments where value chains are weak.

The Ugandan economy is still heavily reliant on agriculture, with 69 percent of households dependent on subsistence farming and nearly 75 percent of all households.

Atingi-Ego  revealed that the share of value-added by the agriculture sector in the economy stands at about 25 percent, presently.

“Boldly facing these facts, it is clear that whenever the BoU announces the Central Bank Rate (CBR), the intended policy signal may not penetrate through to the majority of the population. It is, also, quite evident that the route for the CBR signals to reach the people will be unblocked through agricultural finance,” Atingi-Ego said.

He added: “Fortunately, by seeking to close the information gap between agriculture and finance, these yearbooks bring much-needed illumination to the recesses of information asymmetry, thereby improving risk analysis and credit scoring of agricultural credit.”

 

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Uganda’s coffee exports on the rise

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The Uganda Coffee Development Authority (UCDA) says that the country’s coffee exports are increasing, showing a gradual rise in the last two years.

“Coffee exports for Sep 2019 to Oct 2020 totalled to 5,409,054 bags worth $513.99m compared to 4,465,534 bags worth $435.81m the previous year,” UCDA noted in a tweet on Wednesday.

“This is a 20% and 18% increase in quantity and value. Performance attributed to increase in production, fruitation of new coffee trees and good weather,” the authority added.

In the last one year (since June 2019), the highest earnings from coffee exports of $48.2m were registered in January 2020 followed by the August 2019 earnings of $46.3m.

More so, Uganda’s coffee was ranked third best in the world by cup tasters who graded 1,229 coffees from around the world.

According to the Research Gate, studies show that Uganda is one of the largest producing and exporting countries of coffee products in the world.

Coffee production has heavily contributed to both domestic and foreign earnings in the country.

Moreover, coffee also serves as a primary source of labour, especially for the rural smallholder farmers.

Original Post: New Vision

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Agriculture rebounds as economy recovers

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Prices of agricultural products are starting to rebound as the easing of lockdown measures in Uganda open up places of food consumption.

Evans Nakhokho, the chief manager, Agribusiness at Centenary bank, said during a thought-leadership forum hosted by the bank that economic recovery interventions had triggered a five per cent increase in food prices.

“The five percentage point price improvement is largely attributed to the gradual recovery of activities in the agricultural sector and the economy as a whole. A case in point is the improved price of matoke and other foodstuffs,” Nakhokho said.

Key to this recovery is the role that has been played by both financial and non-financial services in helping to ease the access of credit to framers, which, according to Nakhokho, raised the fortunes in the sector.

“Financing plays an instrumental role in boosting agricultural activities. The structured ecosystem that focuses on both financial and non-financial services has enabled the utilization of credit. This year, we have disbursed close to Shs 600 billion, of which 60 per cent has been issued to smallholder farmers.”

The symbiotic relationship shared by the banking sector and agriculture means that both have been pivotal to each other’s recovery efforts, according to Nakhokho.

“Agriculture financing contributes about 12 per cent of the total lending to all sectors in the banking industry, which is approximately Shs 2 trillion,” he said.

Beyond the financing, banks have also offered guidance to their customers in relation to managing their credit and how it can be invested for a strong return on investment, according to Nakhokho. He said they had reviewed business projects and even restructured the loans to make it easier for customers to pay back the money.

LESSONS

Mona Ssebuliba, chief operating officer, Agricultural Business Initiative (aBi), said their focus as an organization has been on stabilizing and strengthening financial institutions to ensure that agribusiness financing is supported.

“This has been implemented by rescheduling lines of credit (principal and interest) for a period of 12 months, reduced interest rate from an average of 13.5 per cent to 8.2 per cent on all running facilities…”

Ssebuliba said. Ssebuliba said farmers have to improve their businesses if they are to survive other challenges. He advised commercial farmers to have “the ability to swiftly adapt to improved business models, digitizing for improved resilience, business monitoring, and putting in place business continuity plans for the unexpected occurrences…”

ASSESSING COVID IMPACT

Martin Fowler, the agriculture adviser, United States Agency for International Development (USAID) Uganda, recently stated that the Covid-19 lockdown presented mixed results in the prices of food. According to Fowler, there was a slight spike in staple food prices between March and April, followed by a slight decline, though, to August.

“Maize prices rose rapidly in the early weeks of Covid-19 lockdown (mid- March to April) from Shs 1,129 to Shs 1,458 per kg. This trend was caused by a combination of panic buying, speculation, government purchases and supply-chain disruptions. Other staples mirrored this trend,” Fowler said.

According to Fowler, food prices currently remain close to (significantly above, in the case of beans) 2019 levels and the five-year (2015-2019) averages, which shows that the sector has for the meantime managed to weather the storm from the impact of Covid-19 on the agricultural sector.

Effecting of the lockdown by the government, therefore, led to a decline in effective demand for food, which reduced household incomes, according to USAID.

Agriculture experts have now projected that the significant loss of formal sector jobs and incomes as a result of the impact of Covid-19 will continue to impact negatively the domestic demand for food, and their prices on the market. Similarly, international and regional demand prospects for agricultural commodities remain uncertain despite the improvement in food prices.

Original Post: The Observer

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