Food shortages are reported in different parts of Uganda year in year out. But the government has always insisted that Uganda is not food insecure, arguing that while some regions have food shortages due to drought and other reasons, many other regions in the country have surplus food. As a solution to this anomaly, the government plans to improve food storage facilities across the country in order to have a proper record of what type and amounts of food produce is available in what area, and ensure supply of food to less food secure areas at a particular time. This will be possible through establishment of warehouses that will also help farmers keep and better market their produce.  Gerald Businge talks to Alex Rwego, the Manager of the Uganda Commodities Exchange, the government body responsible to make this happen.

Qn. Tell us about the role of the Uganda Commodities Exchange

Alex Rwego, the Manager of Uganda Commodities Exchange

The Uganda Commodities Exchange (UCE) is a Private sector mandated body that runs warehouse receipting in this country.  UCE came into force in 2006 though an Act of Parliament mandating UCE to establish or license warehouses, ensure care and maintenance of those warehouses.  There are public warehouses, which are established by the government to handle accepted crops and private warehouses which deal in storing of a particular crop.

What is warehouse receipting?

It is a system where people deposit commodities of a specific grade to a licensed warehouse and are issued a document of title which is referred to as a warehouse receipt. Currently we are working with four warehouses, located in Jinja, Masindi, Kasese and Mbarara. We are hoping to add another nine warehouses in 2010.

How do ware house receipts benefit a farmer?

All current warehouses and those we are to establish are based upcountry closer to farmers so they can use the warehouses to store their produce.

Apart from storing their produce, how specifically do warehouses help farmers earn from their farming?

One of the biggest problems small scale farmers in Uganda face is post harvest handling. They have no capacity to properly store their produce.  The warehouse receipt system gives them an opportunity to store their commodities in professionally run and secure facilities. Secondly, it gives farmers the opportunity to access markets they would never have accessed.

Currently, the majority of small scale farmers in this country will even sell their commodities while the commodity is still in the garden. And they do that so that they cannot have any losses at that time. The warehouse receipt system has given farmers an opportunity to store and supply to big buyers. For example only farmers who keep their commodities in the warehouses can benefit under the Purchase for Progress of the World Food Programme. In Uganda WFP is the leading buyer of quality oriented grades. In addition to adding value to their commodity by storing it under a particular grade, it gives farmers an opportunity to supply a relief agency like WFP.

But it takes long from the time farmers deposit goods in the warehouse to when they actually sell. How do the receipts you issue help farmers meet their urgent needs?

The warehouse receipts we issue are documents of title showing the quantity and quality deposited by a particular farmer of farmer group in the warehouse. We have been talking to banks over the past four years to finance warehouse receipts. I’m happy to note that beginning January 2010, three Banks have committed themselves to finance ware house receipts. This means that the small scale farmer who could not secure finance will be able to use the commodities they have produced as collateral to receive finance. We have signed a memorandum of understanding with Housing Finance Bank, Stanbic Bank and Centenary Bank. Stabic Bank has already launched its agriculture loan facility to be based on warehouse receipts as security. So farmers will be able to receive finance so long as they have deposited in the warehouse as little as 3metric tones, which is the minimum target of the warehouse receipt system.

Are small scale farmers able to benefit from this warehouse receipt system or they have to be under groups?

Most of the farmers registered are under groups since in this country we do not have that many big farmers who can make the minimum of 3netric tones to deposit in the warehouse.  It has to be economically viable to transport that commodity from one place to the warehouse.

Why is the warehouse receipt system import in agriculture trade?

If you look at the agriculture marketing chain, you have got the farmer on one side and the trader on the other. In the middle you have a set of many middlemen each one taking a certain risk along the chain. Most of these middlemen are dishonest especially in terms of weighing, which makes farmers dishonest as well through tricks like adding bad produce or stones. The warehouse house receipt system ensures there is a transparent way of marketing agricultural goods. The system is transparent. The farmer brings in their produce to the warehouse, it is properly weighed on calibrated scales which we make sure the warehouse keeper services regularly. The farmer’s commodity is them cleaned at a fee, it is dried using mechanical means, it is re-graded, it is re-packaged, it is fumigated and then stored securely. That means the farmer has added value to his or her commodity and at the end of the day get a better price.

For example the last time I was in Masindi warehouse, farmers who were selling directly to the traders- that is selling unclean, ungraded maize, were getting at 450 Uganda shillings per Kilogram of maize. Farmers who decided to use the warehouse receipt system receipted 790 Uganda shillings from WFP

How long do farmers have to wait keeping their commodity in the warehouse before selling and receiving money?

With agriculture commodities, when the harvest season has just started, that…

The post Proper food storage to help end food shortage in Uganda first appeared on Uganda Multimedia News & Information.

Many leaders at the African Union summit in Uganda are leading the way in bringing new energy and commitment to tackling hunger and malnutrition. And the African Union has declared its intent to build an Africa that ends hunger and empowers the continent to both feed itself, and ultimately to help feed the world.

WFP supports this vision and is deploying at Africa’s request tools that empower women and men to overcome their own hunger. WFP also pledges to stand by Africans trapped in conflict and weather-related emergencies who are urgently hungry – especially the most vulnerable young children.

First lady Janet Museveni, WFP Director Josette Sheeran and WFP Uganda Country Director Stanlake Samkange

When designed right, social protection programmes such as school meals, food for education and food for work are foundations for not just beating hunger and malnutrition, but also drivers for agricultural development and faster economic growth.

Food-based social protection programmes can be one of the largest and most reliable purchasers from smallholder farmers. They help create community infrastructure such as roads, irrigation, food processing and storage connecting farmers to markets. They help ensure that farmers and others benefit from the food supply chain so food reaches the people who need it most.

For instance, WFP buys US$1 billion of food annually in the developing world. Uganda is WFP’s number one purchase market where WFP operates. WFP is seeking to replicate that success throughout Africa.

Our Purchase for Progress (P4P) initiative – which is being implemented in 16 African countries – builds the capacity of smallholder farmers to connect to markets and raise their incomes.

P4P is transforming the lives of smallholder families in villages across Africa. WFP envisions the day when its emergency operations in Africa will be largely supplied by African farmers. We are gearing programmes to empower people to be food self-sufficent and contribute to the food supply chain.

With the support of the  Bill & Melinda Gates Foundation, the  Howard G. Buffett Foundation and donor nations, P4P is building capacity with partners such as the UN Food and Agriculture Organization and guaranteeing markets for smallholder production at fair prices.

WFP is also looking to Africa to supply fortified food products, which will build employment opportunities and help end the scourge of malnutrition in the continent.

Last week I visited the Millennium Village of Ruhiira in southwestern Uganda where WFP so far this year has purchased 250 metric tons of beans from 1,000 smallholders in a Women’s Association to feed hungry children in drought-stricken Karamoja in the Northeast.

I pledged to them that WFP would double its purchases in Ruhiira next year because their actions are helping now to transform thousands of lives in the very remote area.

My trip to Africa has included visits to Niger, the Democratic Republic of Congo, the African Union summit in Kampala and Rwanda. In all these places, we hear the same voices of people wanting empowerment to build better lives and to end food insecurity. WFP, in support of the leaders of the African Union, is here to help them do just that.

Josette Sheeran, the WFP Executive Director made this in a statement at African Union summit in Kampala

Also see

Small holder farmers expect more from WFP’s Purchase for Progress

Ugandans asked to take advantage of WFP’s Purchase for Progress

The post World Food Programme roots for food based social protection programmes first appeared on Uganda Multimedia News & Information.

After growing different crops on subsistence basis for over 15 years, Simuntu in 2004 decided to farm with the key aim of earning substantial income from his farming.

“I embarked on farming only beans and maize on a bigger scale,” he says.  Speaking at his 20 acre maize farm in Kiwungu, Mbulamuti, Kamuli district, Simuntu says farming is the best chance for many ordinary Ugandans to earn income. Apart from this big maize farm by Ugandan standards, Simuntu also grows beans in another 20 acre farm, rotating maize and beans over the different seasons.

Many farmers need support to produce for the market

“I realized the only way to earn more income from farming is to grow big quantities of commodities like maize and beans which are traded by big buyers, even across borders. I had to invest in planting improved varieties, fertilizers, labour, and give more attention to my farms,” Simuntu says.

And it wasn’t long before he was rewarded for his efforts. For each acre, Simuntu harvests two tons of dry maize, a big feat for a farmer who had never harvested two tons in his earlier farming life.

But the quantities he was producing were still insufficient to attract a good buyer to Kamuli or enable him to make money through transporting his maize and bean produce to Jinja or Kampala (40 and 130 kilometers respectively) where he might get better prices for his produce.

This led him to form the Simuntu Farmers Group, in order to work with fellow farmers in Mbulamuti to produce more quantities and be able to attract a better market for their produce. Even then, competing with big food traders in the towns meant that Simuntu Farmers were always out bid whenever there was a chance of tapping good prices of big time food buyers like the World Food Programme.

Simuntu says that farmers were in 2008 boosted by the direct purchase of WFP from their group. The WFP, which is the leading single food buyer in Uganda and many African countries, through its Purchase for Progress initiative is now purchasing food items direct from small holder farmers.

“The direct purchase by WFP has helped us a lot as farmers, compared to the former system of tendering. You could tender to WFP 10 times and you never get the contract to sell them your food crops,” Simuntu says.

What is Purchase for Progress?

Stanlake Samkange, WFP Country Director in Uganda says Purchase for Progress (P4P) is a new initiative started by WFP in 2008 to increase local purchases in areas where WFP operates.

The P4P is being implemented in Africa (Uganda, Burkina Faso, Democratic Republic of Congo, Ethiopia, Kenya, Liberia, Malawi, Mali, Mozambique, Rwanda, Sierra Leone, Sudan, Tanzania and Zambia); Latin America (Guatemala and Nicaragua) as well as Asia (Afghanistan and Laos)

“WFP spends over a billion US dollars each year purchasing relief food. If that money is well spent locally, it constitutes a significant input in the agriculture sectors of the respective countries. Purchase for Progress is aimed at using WFP’s purchasing power to improve agriculture through increasing access of farmers to markets and improving incomes of small holder farmers. Other than focus on our food purchase and distribution for relief purposes, we want to ensure the food purchases we make bring about development by benefiting smallholder farmers,” Samkange told ARP in an exclusive interview.

Map of countries where WFP’s P4P is being implemented

View Countries implement WFP’s Purchase for Progress in a larger map

David Kakuba, the Coordinator of Simuntu Farmers Group says each season, they supply an average of 1,500 tons of maize to WFP for an average price of 700 Uganda shillings, which is more than twice the best price farmers in Kamuli had ever sold their maize produce.

Samkange says the WFP is currently purchasing maize and beans directly from farmers groups in different parts of the country that produce surplus food.

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