Sober at the ginnery

Lunchtime on Saturday, at Gulu’s Ethiopian restaurant (actually run by Eritreans, but I guess they don’t quite have the same brand yet), we had an interesting debate on the big-picture issues for Northern Uganda’s economic development. 

It’s fairly obvious that agriculture will be the North’s economic base.  Land is plentiful & fertile, the climate is good with two growing seasons, there are populations in South Sudan and DRC to export to, let alone Uganda’s still growing populace to feed.   But at the moment, not much of the land is being farmed, and of the land that is, I’d estimate at least 95% of it is farmed by smallholders.    

So naturally everyone at lunch - representatives from Danida, aBi Trust, African scholars, and Ugandan locals – agreed that lots more needs to be done to support those smallholders.  Many farmers here have 10 or even 20 acres, but often only 2-3 are cultivated while the rest are overgrown with thick bush.  The farmers need support to clear the land, training in getting high yields, access to affordable inputs, and involvement in stable premium markets.  They need better storage facilities and cheaper transportation options.  Most of all they need to be able to access financial institutions & save & borrow to make the most of every shilling that they earn.

10 acres, and a yield of 500kg/ acre of cotton, at this year’s UGX 1200/kg cotton price would be transformational for farmers here, but it still amounts to a shockingly tiny $2400 in revenue.  Helping smallholders grow is crucial, and I’m proud of the ginnery plans to help thousands of them, but its often discussed as if it’s the only option.  For once, we discussed commercial farming too.

A Ugandan joined us at lunch to tell us about his 1,200 acre (5 square mile) farm about 60km west of Gulu.  He farms just 100 acres of it because he doesn’t have the capital to invest in the rest.  He explained that he’s too scared to use the land as collateral to get a loan from the bank – if the climate ruins one year’s crop, he might lose the farm.  I can understand that, as it’s not like Uganda has social safety nets for people who take those kinds of risks and lose.

But the obvious answer seems to me to get an equity partner in:  lease 50% of the land for 20 years or so to someone who has the money to make it productive and use the lease revenue to farm the remaining 600 acres (and get rich).  The farm-owner responded to that suggestion by stating that culturally it’s ‘not right’, and that his neighbours would cause problems.  He’s referring to the fact that such a willing, able & capitalised partner is more than likely to be ‘foreign’ (which interestingly can often mean a Southern Ugandan, as much as a white person).  While I don’t doubt neighbours can make things difficult, I would’ve thought that the view from his house, across 1,100 acres of vast wasted unused land, would be enough to make this guy think that he could set an example of how this culture needs to change.

It’s easy from afar to romanticise life as a smallholder living off the land.  But in smallholder farming, risks are so high, particularly proportionate to the less-than-spectacular maximum gains.  Most smallholders are ‘entrepreneurs’ by necessity, not by choice.  Of course it’s vital to find ways to give every smallholder the best chance at making the most of their land.  But it’s also important to support the development of commercial farms, which can provide reliable secure jobs, and be competitive in the global markets.   It will take significant capital, and as the Ugandan at the lunch table described, a fairly huge shift in the northern Ugandan culture.