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February 28, 2010

Uganda bumper maize harvest depresses prices

by Elias Biryabarema

Uganda's maize production rose an estimated 30 percent in 2009 from a year earlier, boosted by a wider use of fertilizer and high-yielding seeds, a government official said on February 24.

The bumper harvest has swamped local markets, causing a slump in prices and distress among farmers who say prevailing prices barely cover their production costs. A kilogramme of maize trades at an average of 300 shillings, down from a high of 700 shillings in 2008 and early 2009.

Traditionally, maize has not been a major cash crop for the east African economy but it has gained popularity and exports to neighbours South Sudan, Democratic Republic of Congo and Kenya have grown.

Opolot Okasai, commissioner for crop resources in the Ministry of Agriculture, said Uganda was expected to have produced between 1.6 to 1.8 million tonnes last year, up from 1.26 million tonnes in 2008. "Last year an increased number of farmers used fertilizer and, through government extension services, they were also supplied with high-yielding seeds," he said, adding that data was still being collected to produce a precise output figure.

Although rains were poor in most areas in the first half of 2009, they were favourable in the last quarter of the year when much of the crop was produced, he said.

Uganda's domestic corn consumption stands at an estimated 1.1 million tonnes.

"That was certain to happen," Okasai said. "These farmers planted good seeds and used fertilizer and made a good harvest which inevitably had to overwhelm demand."

President Yoweri Museveni has directed the ministries of finance and agriculture to mobilise funds to buy the excess produce and stabilise prices.

The increase in food production has, however, helped bring down inflation. A significant drop in staple food prices slowed Uganda's inflation rate to 8.8 percent in January, the first single digit rate since April 2008.

Okasai also said the government was in the process of working with the private sector to establish strategic grain reserves in each of the country's main regions. Uganda has no such reserves at the moment.

Reuters

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