Smallholder supply chains - How to make the food chain sustainable Presented by Margaret Asekenye Absa Bank Uganda
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Smallholder supply chains
How to make the food chain sustainable
Presented by Margaret Asekenye
Absa Bank Uganda
1 |
Introduction
• Africa population is predominantly rural with 54% of the population engaged in
agriculture (FAO 2014).
• Farmers largely cultivate small, fragmented parcels of land hence called smallholder
farmers (Kuivanen 2016).
• Smallholder farmers account for the bulk of food production in Africa hence their key
role in supporting livelihood (Wiggins 2007)
2 |
In Uganda, smallholder farming households are the least income earners.
Main source of household income and poverty
11,2
29,8
12,5
11,4
16,5
17,1
13,7
Crop farming (Smallholder) Livestock (Smallholder) Commercial farming
Wage employment Non-agriculture enterprises Remittances
Others
• Source: Uganda National Household Survey (2016/17)
3 |
Poverty could be associated with subsistence farming
Activity status and Poverty
10,2
25,3
34,8
32,3
16,3
6,6
Paid employee - not casual in agriculture Paid employee - casual in agriculture Self employed
Contributing family workers Subsistence farmer only Not working
• Source: Uganda National Household Survey (2016/17)
4 |
Why is poverty high among smallholder farmers? • Exploitation by middlemen for example the farm price of matooke is approximately 1.13 US$ while it costs at least US$ 4.25 in Kampala • Largely nature dependent? Hence higher vulnerability to climatic shocks which accounts for higher poverty incidence. • Input supply constraints which undermines quality and quantity of yield. • Land poverty/land insecurity which undermines the extent of commercialization hence low yield. 5 |
The aforementioned prognosis implies incompleteness in the smallholder farmer food value chain • Middlemen survive because of the limited scope and quite often absence of aggregator and cooperatives • Dependence on nature is on account of absence of agriculture production zoning to extent that there are no economies of scale in input supply for example irrigation facilities and extension services that are crop or animal husbandry specific. • Input supply constraints e.g Fertilizer ➔ partly on account of absence of streamlined supplies ➔ hence quality and quantity inconsistences • Land insecurity ➔ overlapping rights and absence of a well developed land market. 6 |
How then can smallholder supply chains be enhanced to make the food
chain sustainable?
Aggregators/Cooperati
ves (Provide market)
Government
(policy and regulatory
Small holder farmer Financing (Absa) environment e.g GOU
Agricultural Credit
Facility)
Input suppliers
7 |Absa bank’s role in ensuring sustainable food value chains in Uganda
Farm Machinery Agro processing machinery
Farm improvement
Post harvest
handling Why chose Absa Bank?
• Wide range of products.
• Competitive rates as low as 12% P.a
• Flexible repayments with grace periods.
• Discounts on farm vehicles and equipment
tracking .
• Power to transact at your farm using our
online banking.
Farm Inputs Purchase of
Storage facilities Biological Assets
8 |Conclusion
• Uganda’s agriculture sector is entirely based on smallholder farmers.
• In order to achieve a sustainable food value chain, better pay for small holder farmers,
and to create a positive impact on the environment;
• Its critical to work closely with smallholder farmers to embrace new agricultural inputs. For
example fertilizer use and techniques
• Provide financing solution through Aggregators/Cooperatives and input suppliers
• Together, we can sustain Uganda’s food supply and food security.
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