Grain, an unsung hero of our day by day sustenance, is thrust into the limelight solely when markets falter and costs skyrocket. It’s in these moments of financial turbulence that grain reveals its true significance, capturing headlines and reminding us of its important function on the planet’s meals chain.
In a method or one other, rising and promoting grains is how not less than 30 p.c of Ugandans make a dwelling. They consequently bear the brunt when this priceless agricultural produce is mishandled available in the market.
Uganda, similar to Tanzania, is a meals hub. Zambia is presently grappling with a drought, which supplies Ugandan farmers an opportunity to enter the grain market by providing to provide a number of tonnes of maize. However how seemingly is it that your maize will attain Zambia at a worth that’s aggressive? Moreover, how can one revenue from this valuable product available on the market? These questions swirled in my thoughts as I ready to satisfy Mr Gerald Makau Masila, the chief director of the East African Grain Council (EAGC).
With its reserves working low and greater than two million individuals vulnerable to hunger, Zambia is in negotiations with Uganda to doubtlessly obtain greater than 500,000 metric tonnes of maize. Nonetheless, based on David Kyomukasa, the everlasting secretary within the Agriculture ministry, sure necessities have to be met for profitable export. These embody guaranteeing high quality and out there volumes, as detailed in a letter dated March 25, 2024, as reported.
Work to be carried out
Mr Masila, whose enterprise operates inside the grain worth chain, states that for merchants in Uganda or Tanzania to efficiently faucet into the market, aggressive pricing is essential.
“Keep in mind, it’s not solely Uganda and others which have a surplus and are supplying to the market. So the entire thing of worth willpower is set available in the market,” he tells me whereas we meet on the Serena Lodge Kampala.
His allure, nonetheless, provides confidence that the looming hurdles might be wiped away. He says that presently his establishment is advising all grain producers to be as environment friendly as attainable and provide the best high quality product. Essentially the most engaging provide is the one that may succeed available in the market, he emphasises.
“We have now regarded on the worth chain and we’re seeing that the issues which might be build up the worth that might be provided as an illustration to Zambia, are logistics and ensuring that it’s standardised in high quality which requires a value within the warehouses,” he begins.
“Now, to maneuver that grain all the best way to Lusaka, Zambia for instance, you’ll cross borders and you can be doing clearing and all the things on these posts. So, if the price buildup turns into so excessive, the worth if you land in Harare turns into a worth that might be a lot increased when you have been introduced from someplace far,” he continues.
Such inefficiencies may make Uganda’s produce much less aggressive. To deal with these points, the EAGC is searching for partnerships, resembling with TradeMark, an Help-for-Commerce organisation, to enhance provide chain logistics and streamline cross-border clearing. This includes decreasing delays and prices at borders, optimising haulage portions, and guaranteeing that scaling prices per tonne stay low, so your produce stays aggressive.
“We all know that Uganda is making a proposal available in the market, however Tanzania can be making a proposal. They’re even nearer to Zambia,” he notes, including, “We’re working with extra farmers and companions to carry down the price as attainable to make sure that logistics and cross border clearance doesn’t get to a degree the place it will increase the prices and turns into uncompetitive.”
He then proceeds to conclude that “there’s a lot to be carried out.” The opposite day, he remembers, “we checked and due to the cross border posts, a truck took 10 days to cross.”
Requirements query
So I ask him about certification of the produce that reaches Zambia as a result of there was a precedent. The South Sudan Nationwide Bureau of Requirements (SSNBS) seized 65 Ugandan vehicles carrying maize to South Sudan in June 2023 on the Nimule-Elegu border publish resulting from claims that a few of the maize’s high quality had been compromised. Based on the South Sudanese authorities, the maize was unfit for human consumption as a result of it had aflatoxins of greater than 10 bpp and a excessive focus of b-propeller phytases (bpp).
Later, presidents Yoweri Museveni (Uganda) and Salva Kiir (South Sudan) determined that the impounded vehicles be introduced again to the border publish in order that the East African Neighborhood cellular laboratory continues testing them.
I wish to know from Mr Masila if this situation would possibly recur, and he’s fast to guarantee me that important efforts have been made to harmonise requirements throughout the East African area, and have fruited a unified normal for maize, beans, and different grains.
“So with requirements, it received’t carry a value or commerce limitations that may make cross-border commerce tough. Clearly, requirements have been a problem earlier once they have been totally different in numerous international locations, however now we have now been in a position to harmonise. The problem we have now is to have the ability to check and get a fast check evaluation in order that it doesn’t take way more time. That is a matter that we try to handle,” he says.
“We have now had our members who’re invested in lab providers and testing providers, and even on the EAGC, we’re offering that service from our secretariat. When our members in Uganda are exporting, they usually name our high quality inspectors, who come, pattern and analyse with cellular check kits, and be sure that it meets the regional requirements,” he provides.
One of many initiatives the East African Enterprise Council (EABC) has been creating with TradeMark is the creation of one-stop border posts to scale back the time vehicles spend at borders. A brand new publish has not too long ago been established on the Zambian-Tanzanian border to facilitate sooner and smoother commerce between our international locations
EAC Finance payments
So now the dialog shifts to the present nationwide budgets throughout the area the place finance payments have been introduced with the respective governments proposing taxes and incentives to bolster their macroeconomic methods for the subsequent fiscal yr. Mr Masila mentions that the EAGC has beforehand collaborated with the EABC to analyse all funds payments submitted by regional companions earlier than their readings. They assessed how these payments may affect the grain sector, particularly in regards to the motion of grain throughout borders, manufacturing, and different points of the worth chain.
“And we have now already submitted our submissions in every of the international locations. As they’re proper now, they don’t seem to be particularly impacting solely the grain sector however enterprise usually, whether or not you might be within the grain business or not. And that’s why we have now particularly requested for incentives. We’re saying that agriculture is essential, and you could have a look at initiatives that may improve manufacturing, improve competitiveness, scale back manufacturing prices, and make it simpler to maneuver commerce throughout borders,” he notes.
“A few of the proposals we have now given purpose to enhance meals security. We have now mentioned that proper now, to construct the lab chemical substances and lab gear and all these different infrastructures for high quality, they’re all topic to taxes but these are used to enhance meals. We’re making an enchantment that any funding that’s going to enhance the standard of our meals shouldn’t be taxed however as an alternative be given as an incentive to draw non-public sector funding,” he provides.
Nationwide advertising firm
As we end our lunch, I inquire in regards to the Nationwide Social Safety Fund’s plan to ascertain a Shs40 billion firm geared toward aggregating grain, guaranteeing well timed funds to farmers at aggressive costs, a undertaking presently within the pipeline. He appears glad about it and grins earlier than he responds.
“Our view is that the federal government firm is coming at the next degree as an excellent aggregator. And we see that a variety of time points don’t come from mere concepts. Most of the issues we undergo are implementation issues. We see that, to an extent, it may even be useful when you have that advertising firm with liquidity and finance. So if they arrive with liquidity and finance, which means they’ll have the ability to purchase grain, and cash will trickle right down to farmers,” he says.
He additional observes that some seed firms have proven as much as gather seeds from companies, however they haven’t paid them.
“That’s how we see it: if a giant contract, like in a rustic, has been agreed upon and the costs are engaging, then the remainder of us who’re small aggregators will provide the tremendous aggregator who can get a profit out of it. We see that it’s not one thing that may trigger a battle however one thing that may carry liquidity and develop the sector as effectively,” he concludes.
