The Independent Uganda: You get the Truth we Pay the Price
COMMENT | TMS RUGE | For those not paying attention, new EU organic certification requirements of all supply chains have effectively killed off Ugandan agriculture exports into the European Union.
For example, organic certification has been a necessary certification for export of our Moringa powder and for a while it was competitive advantage. They have however been completely burdensome to a point that I am required to track nearly 50 data points on every farmer in my supply chain.
They’ve now increased requirements to where all farmers have to register as 1) individual small business entities or, 2) self organize and register. On top of that, they have to now maintain their own set of certification records and monitoring.
I can confidently tell you that a one Mr. Odinga in Budongo forest who lives in a hut with half acre of moringa is NOT going to do that. Nor will they organize and register as a producer entity.
Why?
- It’s a burdensome expense for him
- There’s no premium paid to deal with that burden.
Prices being offered by EU customers have fallen by 50% since 2019 while certification requirements have increased. Meaning we have to reduce the price we pay him. So why bother?
We often don’t think about trade barriers dressed as suffocating regulations that value-added processors in Africa have to swim through to trade with the bloc. There is all this preaching of increased trade with the continent but behind the scenes they tighten regulations and drop prices.
The The African Continental Free Trade Area (AfCFTA) can’t come soon enough to allow African producers trade right here on the continent. They need this, because African governments don’t have the leverage to demand trade regulation reciprocity.
Now I have to consider dropping all our farmers, because there’s no incentive any more to work with them. Wonder if agriculture impact investors are considering this difficulty when demanding impact reach in order to invest in the sector? The checks are too small for founders to deal with this.
In summary, the way I read it, is that the aggregator model is no longer a viable business. So you can’t build a large out grower supply chain for organic products. Companies now have to expand own farm holdings and own the entire value chain. We can no longer carry the weight of supporting the farmers.
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Ruge is the founder of a number of businesses and initiatives working on cutting-edge solutions for social change. He is the founder and CEO of Raintree Farms, an agriculture business in his hometown of Masindi, Uganda, as well as the co-founder of remit.ug, a money transfer platform.
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For those not paying attention, new EU organic certification requirements of all supply chains have effectively killed off ag export into the EU. Organic certification has been a necessary certification for export of our Moringa powder and for a while it was competitive advantage
— 🇺🇬 TMS Ruge 🇺🇦 (@tmsruge) November 27, 2024
