Developing economies must identify strategic interventions in agriculture with emphasis on value chain development.
Uganda’s path to economic development rests on the performance of the agricultural sector. Developed agricultural value chains around the world have contributed to increased productivity.
As a result, there has been more food output. A value chain is a series of activities needed to bring an agricultural product from production to the final consumer.
Using an example of the milk value chain, milk undergoes a series of stages before it reaches final consumption. These include production, transportation, processing and packaging.
According to the Diary Development Authority, Uganda has the capacity to process and export over 5 million litres of milk daily and with the current increase in milk prices, our farmers stand to benefit a lot more if we can upscale our processing capacity. The low capacity to process milk has resulted into low prices at an average of sh250 per litre.
There exists wider opportunities for investment in Uganda’s diary sector in the areas of processing, packaging and transportation. Specific attention should be paid to milk processing plants and quality assurance to meet foreign market standards.
Financial intermediaries have a role to play through extension of credit facilities to the milk industry actors. Financing asset acquisition would enable actors in the industry acquire milk cooling machinery and capital to buy milk from farmers.
Transforming the agricultural sector will require the Government to analyse the value chain of major agricultural products and strengthen the weak links along the chain.