Members of Parliament have called on the government to expedite the establishment of an agricultural bank to address the hesitancy by financial institutions to lend to farmers due to the high risks associated with the agriculture sector.
This was after the Parliamentary Agriculture Committee noted that most financial institutions invest less in the agricultural sector citing the high risks involved. The MPs noted that the establishment of the Agricultural Credit Facility (ACF) in 2009 as a risk-sharing facility with the main objective of supporting the commercialization and modernization of the agricultural sector has inadequately benefited small-scale farmers who are the majority players in the sector.
"Parliament, in October 2022, resolved to establish an Agricultural Bank but little is known about the progress by government towards this resolution. The absence of an Agricultural Bank and lack of an Agricultural Financing Policy in guiding financing mechanisms and strategies in the Agricultural sector remains the major gaps in the realization of proper agriculture sector financing," noted Okori-Moe.
Tractors and power tillers deployment
Parliament has also urged the government to avail Shs259bn for the procurement and deployment of 2000 tractors and an additional Shs100bn towards the purchase of 4000 power tillers to improve the mechanization of Uganda’s agriculture sector.
“In FY 2024/25, the Ministry of Agriculture requires Shs282Bn for the procurement of 2000 4wheel tractors with matching implements (planters, hullers, harrow, trailer, ploughs, rippers, rotavator), as a step towards availing a tractor per sub-county, but only Shs23Bn is available in the MTEF.
Furthermore, MAAIF requires an additional Shs100Bn to procure and distribute 4000 power tillers (Walk-behind tractors) of 14HP with assorted implements but no allocation has been made,” noted Okori-Moe.