Agricultural Cooperative Marketing and Credit Policy Reform in Uganda: An Opportunity for Poverty Reduction

Abstract

Academics and development practitioners increasingly view cooperatives as the cornerstone for agricultural transformation and poverty reduction in sub-Saharan Africa. Cooperatives play a crucial role in promoting bulk storage and sale by smallholder farmers, which can play a major role in poverty reduction for farmers otherwise unable to commercialize. Despite the significant role of cooperatives, the reforms associated with economic liberalisation have caused many cooperatives in the region to fail. While efforts were made in Uganda to ameliorate this situation through the passing of the National Co-operative Policy (NCP), this has done little to enhance the survival of these cooperatives. In this opinion paper, we identify challenges faced by cooperatives that negatively impact performance and survival, such political interference, lack of administrative support, human resource constraints, inadequate knowledge of the operations by members and poor governance. This paper recommends stronger linkages between the Ministry of Trade, Industry and Cooperatives and the Ministry of Agriculture Animal Industry and Fisheries (MAAIF). Integrating cooperatives into the decentralisation framework and formalising existing village savings and loan association groups into formal cooperatives. Most importantly, the government needs to take on a more proactive approach toward cooperative development, as seen in some countries such as South Africa and Rwanda.