Farmers should benefit from PDM

The arrival of the much discussed Parish Development Model (PDM) has taken place at the time when most small scale farmers have been struggling to access credit.

For a very long time in our history, most mainstream financial institutions have been slow and rather reluctant to extend credit to farmers although agriculture is often referred to as the backbone of our economy.

Agriculture is viewed as a business with low rates of return and shrouded in all manner of risks, ranging from long droughts, floods, hail storm, pests and disease as well as agricultural commodity price fluctuations.

If a bank is to lend money to a farmer it normally does so on hard terms and demands security of valuables such as land titles or commercial buildings --- things far beyond the scope of smallholder farmers.

Aware of their difficult credit circumstances the farmers have over the recent years formed groups to face their credit problems collectively. They have chosen to market their products together and often succeeded to get higher profits.

They have also created their own savings and credit arrangements. Many of them have set up their own input shops from which they can purchase items on credit and pay later after harvest of their produce.

PDM has arrived when a lot of farmers are already used to this credit system. We have such examples as Kibinge Coffee Farmers Cooperative Society which also has alongside it the Kibinge Coffee Farmers Savings and Credit Organisation in Bukomansimbi District.

In such groups the farmers know each other and the volumes of their produce and they therefore tend to offer credit to their members on easier terms than those required by well-established financial institutions such as banks.

Farmers must welcome the arrival of PDM since it is coming to increase their chances of access to credit. But PDM must not be viewed as a replacement of what they have already been doing.

And the PDM proponents have got to exercise caution about which kind of people approach PDM for support. Not every Ugandan is keen on getting out of poverty.

Ever since farmers started working in groups there are still very many others that have not taken interest in such efforts. There are people wallowing in poverty because they cannot be trusted with money.

Mr Michael Ssali is a veteran journalist, 

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