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Contract farming could be the gamechanger for Uganda’s agriculture

Cattle feeding

Cattle feeding

Agriculture is the backbone of Uganda’s economy. At least 70 per cent of the population depends on agriculture.

Data indicates that the majority are in subsistence rather than commercial farming, only cultivating 35 per cent of arable land. In the 2021/22 financial year, agriculture accounted for about 24.1 per cent of the country’s GDP and 33 per cent of export earnings.

As a country, we should be cultivating more than 35 per cent of our land for the fact that 80 per cent of our land is arable, and taking advantage of the two rainy seasons and irrigation systems (supplied under contract farming arrangements) as a comparative and competitive advantage - for multiple crop harvest, per year.

Whereas Uganda, according to the UN Food and Agriculture Organisation, is capable of feeding 200 million people, almost three quarters of the East African Community, we can only manage to cultivate 35 per cent of our arable land. So, where is the problem?

When one traverses this country from any direction, one will realise too much of disintegrated small-scale and subsistence farming, and a paltry one per cent or two per cent of commercial farming. This is partly attributed to inaccessibility of agricultural inputs to facilitate large-scale farming, unpredictable price, and market uncertainties that ‘disincentivise’ farming.

In the post-independence era, when cooperative societies were still a thing, farmers leveraged such structures to have access to cheap, high-quality inputs, and access to cheaper capital compared to today.

Commercial agriculture and mass production keeps attracting the middle- class and multinational companies. However, this is not without its own issues. The entry of the middle-class and multinationals in agro-agriculture creates demand for big chunks of land to satisfy the agro-industries.

As a consequence, we are likely to see more illegal mass evictions and dispossession of natives to pave way for commercial agriculture. The effect of this is driving more households into abject poverty, contrary to the ambitious commitment to eradication poverty in all manifestations under Sustainable Development Goals and Vision 2040.

However, involving small-scale farmers in the product value chain might be the silver bullet; it offers a collaborative and participatory approach to solving different bottlenecks, and contract farming has that potential.

Contract farming facilitates a relationship between small-scale farmers and a contractor (usually a multinational company/exporter or rich individual that/who does not own land, but has the resources and expertise to facilitate the production of certain quality agricultural produces on a large scale and for a large market) to make sure farmers participate in the production and supply value chain without being delineated.

Contract farming has the potential to increase participatory utilisation of our fertile arable lands and create more jobs to a demographically young population. Contract farming arrangements easily attract financing from commercial banks and insurance products because of the vigorous risk mitigation interventions activated throughout the value chain processes.

The writer is a lawyer.

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