WHAT HAPPENED TO UGANDA GRAIN TRADERS?

Maize exports increase 80 percent after market crash Full-Steam Ahead for Ugandan Grain Traders Challenge Uganda performed poorly in the agricultural commodities market in 1995, exporting a feeble $7.25 million—40,982 tons—of low-quality maize. “What was typical of Ugandan maize and grain then?” asked John Magnay of Uganda Grain Traders Limited (UGTL). “Shriveled, diseased, high-moisture-content, fermented, and spoiled. Train cars full of stinking, rotting maize.” Five million Ugandan farmers, 80 percent of whom owned less than five acres of land, were raising field crops like maize, beans and rice. But while the sheer number of farmers presented great potential, the farmers were scattered, unorganized and lacking in standards, inputs, markets, capital, or modern technical knowledge and tools. Most importantly, the smallholders lacked a powerful market that would buy their crops and propel their business. When the market crashed in 2001, many smallholders defaulted on loans and lost their land.

Photo: UGTL warehouse workers in Kampala carry sacks of coffee beans from a loading dock. Photo: CARE UGTL warehouse workers in Kampala carry sacks of coffee beans from a loading dock. “We campaigned for increased production and we’re seeing the results: 100,000 tons of maize and 80,000 tons of beans to the World Food Program.” —John Magnay, UGTL Managing Director Initiative USAID’s agriculture initiative reached a million of those smallholders, increasing crop production through extension programs and demonstrations that shared advances in farming, like the use of quality seed. The program also promoted Uganda’s maize to regional markets because, while the crop accounts for only 15 percent of Uganda’s food requirement, it makes up 80–90 percent of food needs in neighboring countries like Kenya and Malawi. With USAID assistance, investors created UGTL, which has established 16 local grain and producer associations. UGTL also built a warehouse the size of an airplane hangar to store crop stocks. Employing 150 local laborers, the warehouse provides plenty of capacity for Ugandan seed and grain before it is exported to regional markets. Results Increased quality standards have helped stabilize the market. At USAID’s urging, UGTL now works with inspection agencies to test grain at the farm gate, training farmers how to keep disease and moisture rates low. Exports of all field crops grew steadily from $11 million in 1995 to $34 million in 2004. USAID trained 3,000 crop farmers—32 percent of whom were women. The country’s crop farmers now supply enough good quality grain to feed the internally displaced people in northern Uganda, providing 80 percent of the necessary relief called for by the World Food Program. ----------------------------------------------------------------------------------------------------------- Uganda: Grain Traders Ltd Closed Over Rent By Jane Nafula & Evelyn Lirri, 7 February 2007 Kampala — HIGH Court bailiffs from Simba Speed Auctioneers closed Uganda Grain Traders Limited over failure to clear its rent arrears. The company deals in cereals. The bailiffs were instructed to close the premises by the Uganda Revenue Authority which owns the building that houses the company. In a letter dated January 31, URA's Assistant Commissioner in charge of Tax Appeals and Debt Collection James Okodi ordered Simba Speed Auctioneers to collect rent from Grain Uganda Traders Limited. --------------------------------------------------------------------------------------- Grain traders owe URA sh1b in rent dues Publish Date: Feb 06, 2007 By Peter Kaujju Bailiffs sent by the Uganda Revenue Authority (URA) struggled with guards to evict employees of Uganda Grain Traders (UGTL) from their Nakawa offices over unpaid rent arrears worth sh1b, a source has revealed. “Bailiffs stormed UGTL’s premises in Nakawa, threatening to evict them. There was a scuffle between the security guards and the bailiffs,†the source explained. The source said URA rented the premises to UGTL in 2002, but the arrears had accumulated between September 2005 up to date. UGTL reportedly rushed to make a partial payment of sh250m last week, but this did not stop the bailiffs from trying to evict them. URA’s spokesperson Patrick Mukiibi said he was not at liberty to disclose information about their customer. But John Magnay, UGTL’s chief executive, said: “I am not sure about that matter.†The bailiffs blocked access to the place to get more details and were reportedly still there by Monday evening.