Photo: sarahemcc

By Brenda Nalumansi

Agriculture is the central pillar of many African economies. As cocoa farming is to Ghana, Kenya is significant for tea, Uganda has a long tradition of coffee production and is now ranked second in Africa and seventh in the world in terms of output.

The Uganda Coffee Development Authority (UCDA) estimates that 500,000 households depend on coffee production - about 25 percent of the entire country’s population.

But coffee growers face a number of challenges since farming is a partnership with nature. Crop cycles and careful timing are part of the coffee farming fabric, but prolonged dry-spells have led to calls for irrigation and subsidised agricultural inputs.

Banks fear risky investment

Gerald Sendawula, the former minister of finance and the winner of the 2010 outstanding farmers award, says small scale farmers find it very difficult to obtain financing from lending institutions. But the banks kick the ball out of their court, saying the lack of risk mitigants like weather index and crop insurance leaves them no option but to sow only where they are certain to reap.

The deputy governor of the Bank of Uganda, Louis Kasekende, agrees that agricultural lending by banks is limited and that some stages on the agricultural value chain would only spell losses if taken up as an investment venture.

As the government strengthens policy efforts to improve access to loans at affordable rates in the agricultural sector, Uganda’s distinguished coffee farmers hope to prosper.

Listen to the radio report below:

Coffee Farming Success Starts and Ends With Finance by financeafrica