AGRICULTURAL DEVELOPMENT AGRICULTURAL DEVELOPMENT AND TRADE: LAND LOCKED AND TRADE: LAND LOCKED STATUS, AGRUCULTURAL STATUS, AGRUCULTURAL PRODUCTIVITY AND TRADE PRODUCTIVITY AND TRADE FACILITATION IN UGANDAFACILITATION IN UGANDA

ByByMwambutsya NdebesaMwambutsya NdebesaE-mail: E-mail: ndebesam@yahoo.com

INTRODUCTIONINTRODUCTION

Economic, Trade and Social Profile of Agriculture Economic, Trade and Social Profile of Agriculture SectorSector

– Trends in the production, exports and imports of major Trends in the production, exports and imports of major crops/productscrops/products

– Trends in agricultural productivity with a focus on Trends in agricultural productivity with a focus on developments in the productivity of main crops in the last developments in the productivity of main crops in the last ten yearsten years

– Trends in formal and informal employment in agriculture, Trends in formal and informal employment in agriculture, rural poverty, rural poverty, nutrition and food security statusnutrition and food security status. .

Landlockedness and trade facilitation issuesLandlockedness and trade facilitation issues

– main physical, infrastructural and institutional constraints main physical, infrastructural and institutional constraints

– Policy framework with a focus on:Policy framework with a focus on:

– Key features of existing development, trade, agriculture Key features of existing development, trade, agriculture and trade facilitation policiesand trade facilitation policies

METHODOLOGY

General methodology guidelines for the project including, literature search, Data collection, and consultations with different stakeholders;

Interview with civil society activists including Farmers association members;

Interview with individual agricultural produce exporters; Presentation of draft findings to National Stakeholders

Dialogue for validation and finalization.

FINDINGSFINDINGS

GDP GROWTH RATE TRENDSGDP GROWTH RATE TRENDS

From the late 1980s, Uganda From the late 1980s, Uganda registered high growth rates registered high growth rates until the 2000s when the until the 2000s when the growth rates slowed down as growth rates slowed down as shown in the Figuresshown in the Figures

Economic growth raised from Economic growth raised from Us $ 2 billion in 1980s to Us Us $ 2 billion in 1980s to Us $12 billion in 2007$12 billion in 2007

Annual Average Growth rate of Total real GDP (1980-2007

3.5

7.4

6.8

6.1

5.6

6.56.2

6.5

5.85.9

5.7

0

1

2

3

4

5

6

7

8

80-90 80-00 80-05 90-00 90-05 95-05 00-05 2004 2005 2006 2007

Per

cen

t

Nominal GDP ( 1980 - 2007)

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

1980 1990 2000 2003 2004 2005 2006 2007

US

$ M

illi

on

Agricultural productivity has been on the decline for much of Agricultural productivity has been on the decline for much of the last decade as shown in the Figures belowthe last decade as shown in the Figures below

Between 1999 and 2006, the major export crops have Between 1999 and 2006, the major export crops have experienced double digit drops in productivityexperienced double digit drops in productivity

The General cause of low productivity levels is theorized to The General cause of low productivity levels is theorized to be lack of improved inputs applicationbe lack of improved inputs application

Uganda’s application of improved inputs is one of the lowest Uganda’s application of improved inputs is one of the lowest in the region in the region

PRODUCTIVITY OF THE MAIN AGRICULTURAL CROPSPRODUCTIVITY OF THE MAIN AGRICULTURAL CROPS

PRESENT FARM YIELDS AGAINST ATTAINABLE PRESENT FARM YIELDS AGAINST ATTAINABLE POTENTIAL FOR SELCTED CROPSPOTENTIAL FOR SELCTED CROPS

According to the Agricultural Sector Investment Plan According to the Agricultural Sector Investment Plan 2009/10 -2013/14; a comparative analysis of farm level 2009/10 -2013/14; a comparative analysis of farm level yields and research station yields reveals a huge gap.yields and research station yields reveals a huge gap.

As table below illustrates, productivity at the farm is far As table below illustrates, productivity at the farm is far much lower than the attainable potential much lower than the attainable potential

FARM YIELDS VS POTENTIALFARM YIELDS VS POTENTIAL

CHALLENGES OF AGRICULTURAL PRODUCTIVITY

Prevalence of animal and plant diseases Reliance on unpredictable weather Price fluctuations Lack of input applications, e.g. fertilizers, pesticides and

improved seeds Poor skills, knowledge and attitudes Absence of agricultural mechanization Land tenure systems Wrong policies

LANDLOCKEDNESS CONSTRAINTS AND THEIR EFFECT ON LANDLOCKEDNESS CONSTRAINTS AND THEIR EFFECT ON AGRICULTURAL TRADEAGRICULTURAL TRADE

LANDLOCKEDNESS STATUSLANDLOCKEDNESS STATUS

Uganda is critically dependent on its neighbors—Kenya and Uganda is critically dependent on its neighbors—Kenya and Tanzania for transportation of her goods and services.Tanzania for transportation of her goods and services.

The main routes used for Uganda’s external trade are: -the The main routes used for Uganda’s external trade are: -the Northern CorridorNorthern Corridor

The Central Corridor that comprises similar services, other The Central Corridor that comprises similar services, other than pipeline, pertaining to the Port of Dar Es Salaamthan pipeline, pertaining to the Port of Dar Es Salaam

An air corridor out of Entebbe International AirportAn air corridor out of Entebbe International Airport Road services between Uganda and countries further inlandRoad services between Uganda and countries further inland

Map of Main Regional Road and Rail Routes

THE MAIN CONSTRAINTS UNDER TRANSPORTTHE MAIN CONSTRAINTS UNDER TRANSPORT

The share of rail transport to total traffic is only 5 The share of rail transport to total traffic is only 5 percentpercent

Operations on railway transport are inefficient and poorOperations on railway transport are inefficient and poor

Internal transport links are mainly by road where more Internal transport links are mainly by road where more than 30,000 kms of rural community access roads are than 30,000 kms of rural community access roads are unpavedunpaved

Most ferries have fallen into disuseMost ferries have fallen into disuse

Road service transport is expensive and exceeds rail Road service transport is expensive and exceeds rail rates by 38 to 56rates by 38 to 56

Other trade facilitation constraints include customs Other trade facilitation constraints include customs operations, clearing and forwarding, insurance, post operations, clearing and forwarding, insurance, post services and telecommunications.services and telecommunications.

CONSTRAINTS (CONT’D)CONSTRAINTS (CONT’D)

Congestion at Mombasa Port which handles 95% of Uganda’s Congestion at Mombasa Port which handles 95% of Uganda’s external trade trafficexternal trade traffic

High cost of road transport due to high tariffs on freight vehicles High cost of road transport due to high tariffs on freight vehicles raised from 7 – 25% with the introduction of the Common External raised from 7 – 25% with the introduction of the Common External TariffTariff

Physical inspection of exports involving duty drawbacks and VAT Physical inspection of exports involving duty drawbacks and VAT refundsrefunds

LINKAGES BETWEEN AGRICULTURAL PRODUCTIVITY AND LINKAGES BETWEEN AGRICULTURAL PRODUCTIVITY AND TRADE IN AGRICULTURETRADE IN AGRICULTURE

Positive LinkagesPositive Linkages Agricultural trade liberalisation has provided price Agricultural trade liberalisation has provided price

incentives to some farmers over some periodsincentives to some farmers over some periods Liberalisation has attracted investments in no-Liberalisation has attracted investments in no-

traditional crop exports especially to the COMESA traditional crop exports especially to the COMESA regionregion

Trading in live animals has positively contributed to Trading in live animals has positively contributed to increased production in the animal industry sectorincreased production in the animal industry sector

Trade in agricultural inputs has contributed to Trade in agricultural inputs has contributed to agrucultural productivityagrucultural productivity

LINKAGES (CONT’D)LINKAGES (CONT’D)

Negative LinkagesNegative Linkages Increased exports have not translated into more Increased exports have not translated into more

earnings for the peasantsearnings for the peasants Increased exports coupled with poor management of Increased exports coupled with poor management of

natural resources have negatively impacted especially natural resources have negatively impacted especially on fish stockson fish stocks

The greatest beneficiaries of increased exports The greatest beneficiaries of increased exports namely the middlemen do not necessarily invest the namely the middlemen do not necessarily invest the proceeds in the agricultural sectorproceeds in the agricultural sector

Liberalisation of agricultural imports has exposed the Liberalisation of agricultural imports has exposed the Ugandan farmers to the vagaries of international Ugandan farmers to the vagaries of international competitioncompetition

LINKAGES BETWEEN TRADE FACILITATION AND LINKAGES BETWEEN TRADE FACILITATION AND LANDLOCKEDNESSLANDLOCKEDNESS

Positive LinkagesPositive Linkages Government has recently put in place a well facilitated Government has recently put in place a well facilitated

customs management mechanism.customs management mechanism. Government realizes that ensuring efficiency in Government realizes that ensuring efficiency in

customs administration reduces on cost of doing customs administration reduces on cost of doing businessbusiness

There are efforts to link the northern corridor to trunk There are efforts to link the northern corridor to trunk roads roads

There are efforts to harmonies trade facilitation There are efforts to harmonies trade facilitation processes at the EAC levelprocesses at the EAC level

LINKAGES BETWEEN TRADE FACILITATION AND LINKAGES BETWEEN TRADE FACILITATION AND LANDLOCKEDNESS (CONT’D)LANDLOCKEDNESS (CONT’D)

Negative LinkagesNegative Linkages Documentation requirements are still many and Documentation requirements are still many and

issued by various institutionsissued by various institutions The cost of exporting is still high and there are a lot of The cost of exporting is still high and there are a lot of

delaysdelays The majority of feeder roads are not-all weather roadsThe majority of feeder roads are not-all weather roads There are incidents of corruption that delay clearance There are incidents of corruption that delay clearance

of goodsof goods

RECOMMENDATIONS

Productivity Government should prioritize, mainstream and encourage Government should prioritize, mainstream and encourage

both public and private investment in improved both public and private investment in improved agricultural productivity ( not merely production) agricultural productivity ( not merely production)

Formulate and effectively implement a National Policy Formulate and effectively implement a National Policy and funding scheme for Small and Medium Enterprises and funding scheme for Small and Medium Enterprises especially those involved in agro-processing and exportespecially those involved in agro-processing and export

Development partners such as UN and EU should prioritize Aid targeting improved labor productivity

Donors should assist government set up an Agricultural Bank to offer soft loans specifically to finance start up projects for improved Agricultural productivity

There is need for a plan and programs to be put in place There is need for a plan and programs to be put in place for adoption of new seed varieties and improved animal for adoption of new seed varieties and improved animal breedsbreeds

Productivity (cont’d)Productivity (cont’d)

There is need for further research on improving Agricultural, and labor productivity

Government, Donors and Researchers should focus attention to plant and animal disease control

Efforts should be made to get away from rain fed to irrigation technology

Farmers associations, social science researchers and government should establish why there is slow or even resistance to adopt modern agricultural technology and management

Researchers should establish why there is dismal in put application such as fertilizer use in Uganda

Researchers should find out the specific impact of liberalization of external trade on domestic agriculture

Land-lockedness and Trade FacilitationLand-lockedness and Trade Facilitation

Government should pursue Trade and Transit Agreements at regional as well as International levels to ease movement of goods for the country

Government should pursue the decongestion of Mombasa port through diplomacy and at EAC levels

There is need for synergy between the ministries of Agriculture, There is need for synergy between the ministries of Agriculture, Trade, Transport and East African Community affairs MinistryTrade, Transport and East African Community affairs Ministry

Government and Donors should prioritize and increase funding Government and Donors should prioritize and increase funding the development of trade and Agricultural marketing the development of trade and Agricultural marketing infrastructure infrastructure

Investment in Railway Transport must be undertaken urgentlyInvestment in Railway Transport must be undertaken urgently Government should come up with a systematic targeted price

stabilization fund for strategic crops or livestock sector

Policy and General RecommendationsPolicy and General Recommendations More facilitative public investment and intervention in agricultural More facilitative public investment and intervention in agricultural

development such as infrastructure, research and subsides development such as infrastructure, research and subsides needed needed

Control population growth to match economic growthControl population growth to match economic growth Invest in rural areas where the majority of the population is Invest in rural areas where the majority of the population is

employedemployed Need for Government to promote an inclusive agricultural policy Need for Government to promote an inclusive agricultural policy

making and implementation process making and implementation process The policy bodies such as NPA should integrate economic and The policy bodies such as NPA should integrate economic and

non-economic factors in their development programmes.non-economic factors in their development programmes. Research studies should establish how and to what extent farmers

earn far less than other players in the value chain and plug these holes

Government should balance commercial imperatives of agricultural policy with issues of environment to ensure Sustainable Development

Thank YouThank You