Politics, monopoly hampering cotton growth, says new report

The report, which casts a shadow on the economic impact of the industry sector on the lives of Ugandans due to its restrictive and political nature, says the lack of policy to govern the industry has given leeway to cartels and foreign monopolies to control it.

The five researchers, including Mr Swaibu Mbowa and Ms Rehema Kahunde, established that while the cotton industry faced a regression in the past 10 years, the volatile political environment around its production has seen many farmers abandon the crop across the country.

In their findings, the researchers stated that political restraints due to information asymmetry discouraged farmers from investing in cotton value-chains.

“The participants revealed that politicians, particularly parliamentarians, have not fully appreciated cotton as a lucrative crop, and as a result, they tend to fight cotton growing in the community.”

The report also states that farmers are concerned that there is always a delay in announcing cotton prices - which affects them and consequently results in losses as they always get stuck with their Cotton after harvesting.

“This lack of a price assurance mechanism has also contributed to low production and poor quality,” it stated.

At the national level, the report blames the delay by policymakers to enact a comprehensive bio-safety law to restrict cotton farmers from applying technology such as growing GMO cotton, which has great potential to improve their livelihoods.

 “Enforcing the policy environment in the cotton value chain is still fragmented, more focus is on the value chain’s export (upstream) end and less on the production and ginneries stages.”

In their recommendations, the researchers said farmers should be fully consulted and involved in determining the price of cotton. “The current cotton price is very low and no longer attractive, the price of cotton should be more transparent and communicated on time,” the researchers said.

Adding: “Revive farmers’ cotton associations and cooperatives; the collapse of cotton associations greatly affected the prices because long before associations existed, it was straightforward for the ginners to support the farmers through their associations.”

To dispel the question of the political economy around the cotton value chain, they also recommended that there is a need to engage with politicians to obtain buy-in and acceptance of cotton farming and production in the cotton farming regions.

Apart from Northern Uganda, there are no cotton growers’ cooperatives in the rest of the country. In the north, such cooperatives exist and are fully operational in East and West Acholi.

Farmers who do not belong to any association have difficulty in accessing markets and getting timely updates on global market prices, among others.

Uganda’s cotton and textile value chain produces by-products like cotton lint and cottonseed, oil, soap, and manufacturing products like cotton yarn and garments.

Mixed bag of success
In its Ministerial Policy Statement for the Financial Year 2022/2023, the Finance Ministry said the low level of domestic value addition to lint has led to dependence on internationally determined prices.
According to the ministry, farm gate prices for cotton are based on volatile international market prices which affect production and productivity.

It also stated that “Climate change characterised by erratic weather patterns which affect timely adoption of recommended production practices thus affecting production, fluctuating farm gate prices” have dampened “farmers’ morale to implement recommended production practices”.

The ministry said there was a 29.4 percent reduction in the volumes of cotton produced, and production declined to 33,600 tonnes in 2019 from 47,577 tonnes produced in 2012. The reduction is attributed to fewer farmers growing cotton due to ever-falling prices.

Whereas there was an improved cotton export performance of $59.3m (about Shs220b) in 2019 with $37.5m (about Shs139b) being earnings from formal exports, bales in Financial Year 2021/2022 contributed Shs86b to household incomes and $32m (about Shs119b) in lint exports, implying a drop in production and earnings, according to the report.

The ministry, however, said the number of cotton growing districts also increased from 70 in Financial Year 2020/2021 to 72 districts in Financial Year 2021/2022 and the total number of special interest groups participating in cotton growing as an income-generating activity increased from 494 groups in Financial Year 2020/2021 to 560 groups in Financial Year 2021/2022.

The Finance Ministry says it has, among others, intensified training of farmers on climate change mitigation practices such as early planting, water conservation, to revamp the sector.

The ministry is also promoting increased domestic value addition by improving access to locally produced lint and cottonseed.

“There are plans to intensify sensitisation of all stakeholders on post-harvest handling, quality management, the impact of contamination on marketability and spinnability of Ugandan cotton and effect of the ginning process on the quality of cotton,” the ministerial statement read in part.

Farmers react
Mr Tonny Opira, a cotton farmer in Pajule Sub-county, Pader District, said skill gaps in cotton agronomic practices, land management and soil fertility including a lack of knowledge in handling modern herbicides and pesticides have continued to frustrate farmers.

“While there is much ignorance in our community on handling the crop during production, the cotton development desks are not there in the districts where we can seek ready information and skills gaps in post-harvest handling and grading, including good management practices,” Mr Opira said yesterday.

Mr Jackson Oyugi, the chairman West Acholi Cooperatives Union, said they have written to the Agriculture Ministry on the critical issues affecting cotton production and why farmers are snubbing it for other commercial crops.

To Ms Rita Achora, a cotton grower at Okidi Village, Atiak Sub-county, Amuru District,   decried price fluctuations.

“While issuing the seeds they will promise this price but once the crop is ready and harvested, the price will drop, For example, last year it dropped by more than Shs900 of the Shs2000 they promised us,” Ms Achora said.

Shaky fishing industry
The researchers said “Most of the challenges in the fish business arise from the speculative and restricted nature of the fish maw business. This has created uncertainty in the overall pricing of the Nile perch.”

For example, during the study, the researchers identified the Nile Perch (Mpuuta) and fish maw (nnuuni) whose trade is still restricted to a few traders who are mainly Chinese engaged in export.
“They (Chinese) deal with middlemen and do not buy directly from the fishermen; hence, the value chain is not well formalised and optimised for the fishing communities to fully benefit from additional income.”

Most of the fish fillet and “maw” is for export, the fish maw also drives the price of Nile Perch fish since a kilogramme of the maw fetches a far higher price than a kilogramme of the fish (fillet) itself.

A kilogramme of the fish maw in 2020 was estimated to fetch more than Shs900,000. The maw has various uses, including the manufacture of surgical sutures.

The fish maw is also a treasured delicacy in China, where it is served in soups or stews in addition to being used as a rich source of collagen, which helps in improving skin tones, complexions and blood circulation in humans.

“The limited enforcement of the Fish and Aquaculture Policy, 2017, especially in the upper nodes of the fish value chain (transportation, processing, and marketing stages), is a major bottleneck to developing favourable fisheries and aquaculture sub-sector in Uganda.”

To reverse the trend, the researchers recommend that the government should avail the support of investment in new smoking technologies such as cancer-free smoking kilns and solar tent driers for drying fish, for example, mukene in bad weather to boost increased value addition.

“...or Nile Perch fish, there is a need to streamline the fish maw business with an emphasis on value addition domestically and increased investments in cage farming should be encouraged to boost tilapia production.”

Meanwhile, the Uganda National Bureau of Standard 2020 data puts the fisheries sub-sector gross domestic product (GDP) growth at 41.4 percent in the Financial Year 2018/2019 making it the highest contributor to agricultural GDP of 5.4 percent.

The same data shows that fish exports also increased from 18,052 metric tonnes in 2015 to 29,495 metric tonnes in 2019, resulting in an increase in value from formal fish exports of about $117.6m (about Shs436.8b) in 2015 to $174.2m (about Shs647b) in 2019.

The species of focus are Silverfish, Tilapia and Nile Perch, with the Nile perch being the major commercial species.

Producing districts
 The Ministry of Finance ministerial statement for Financial Year 2022/2023 indicates that 72 districts out of 146 grow cotton in Uganda.
These districts include;
•Abim
•Adjumani
•Alebtong
•Dokolo
•Hoima
•Kitgum
•Iganga
•Kaliro
•Kasese
•Kitgum