The Independent Uganda: You get the Truth we Pay the Price
Kampala, Uganda | THE INDEPENDENT | Experts have warned that the continued extension of handouts or money to farmers through programmes such as the Parish Development Model (PDM) without offering them support on how to market their products will not help them create sustainable wealth.
Delivering a keynote address at the launch of the Agricultural Finance Yearbook 2024 by the Economic Policy Research Centre (EPRC) on Tuesday, Bank of Uganda Governor Michael Atingi-Ego said sustainable agricultural financing requires more than just capital, as it demands innovative approaches that address the whole ecosystem of constraints affecting farmers. He added that while agriculture contributes to half of Uganda’s export earnings, the sector has not had sustainable funding and financing, and financial institutions have largely shied away from offering farmers credit.
Atingi –Ego noted that on their recent visit to Eastern Uganda, they found a farmer who got PDM money, planted cassava, but cannot find a market for it because the prices have gone down. At the central bank, he says, having realised that addressing financial constraints facing farmers requires a multi-pronged approach, they resolved to consider the block allocation model.
Instead of requiring farmers to present security to access credit, Atingi–Ego says they have realised group lending works better.
Dr Brian Sserunjogi, a Research Fellow at the Economic Policy Research Centre (EPRC), agrees with the governor’s thoughts, saying that small money given to farmers as capital through initiatives such as Operation Wealth Creation and PDM without following up with innovations that help them sustainably invest doesn’t yield much.
“To farmers’ organisations: Your empowerment begins with strengthened governance & financial management to become more bankable– you are the bedrock of our food security.” Governor Atingi-Ego as he launched @EPRC_official‘s Agricultural Finance Yearbook 2024 today #AgricFinanceUG pic.twitter.com/NVWaCFnpXt
— Bank of Uganda (@BOU_Official) April 15, 2025
For him, what ought to be done and has been outlined in the launched book are attending to issues in the value chain, such as leveraging technology, providing agriculture extension services and addressing policy gaps.
Through the PDM, each sub-county is allocated one hundred million shillings, but experts attending the book launch expressed concern that the parish chiefs, who are custodians of this money, lack basic skills, and many of them have a basic level of education, with the highest average level of education being senior one leaver.
Dr Sarah Ssewanyana, the Executive Director of EPRC, urged the government to revisit the agriculture extension reform and address the gaps there. She noted that there is a big skills gap in SACCOs, where most of the smallholder farmers are accessing funding from.
Meanwhile, the launched book bears five chapters, including policy perspectives, financing agriculture through wealth funds, financing agriculture value chains, innovating financing of agri-businesses and managing risk in agriculture finance.
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