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As the previous chapter on rural development shows, perhaps no issue touched those of us in the NRM government more than the poverty of our people in the rural areas. We always believed that our legitimacy as a government was intimately tied to improving the welfare of the masses engaged in rural agriculture.Yet nowhere else were views so sharply divided when it came to the search for the correct policy, and perhaps nowhere else were the government ’s efforts as futile as in agriculture. We knew it was necessary to improve production, productivity, and agricultural incomes and to establish sound agricultural marketing institutions, stabilize agricultural prices, and improve access to land.We also were relatively aware that improvements in agricultural production and productivity required that the government increase the availability of credit, machinery, fertilizer , and seeds to the farmers. We had observed past shortcomings in the marketing arrangements of the Coffee Marketing Board, the Lint (cotton) Marketing Board, the Tea Authority, the Produce Marketing Board, and the Dairy Development Corporation, as well as the various cooperatives throughout the country. And we also were aware of the obstacles Ugandans faced in registering land titles and the numerous difficulties associated with land ownership , tenancy, and registration. These issues remained fundamental challenges facing the NRM administration, and they seemed likely to remain so for many years to come. One of the early actions that the NRM took that had uncertain results was the dissolution of the marketing boards. For example, as described in chapter 8, the Coffee Marketing Board was a replaced by the Uganda Coffee Development Authority. The latter was more of a research and supervisory body 14 Reform and Revitalization of Productivity in the Agricultural Sector 106 14-2589-3 CH 14:Cels 2262-5 3/26/14 10:44 AM Page 106 whereas the Coffee Marketing Board had been a marketing institution. As a consequence coffee marketing was essentially left to the private sector companies , and this appeared to work reasonably well even though, as the figures showed, it did not lead to significant increases in average annual coffee production over the years. However, one great achievement of that reform was the transfer of the “crop finance”problem from the public sector to the private sector. The mobilization of credit for the purchase of coffee from the farmers stopped being the duty of government and became the responsibility of the companies that wanted to buy coffee. Some of the buyers in turn transferred that problem to their buyers overseas, who sent them letters of credit that they used to acquire local credit and thereby make their local payments. Farmers were now being paid in cash, and this private sector arrangement eliminated a big headache for the Ministry of Finance and the government. Challenges to Change: The Cotton Subsector Having solved the coffee finance problem,the government attempted to extend that solution to the cotton and food or “produce subsectors.”1 Until 1994 the cotton business in Uganda was managed by the Lint Marketing Board, which was set up by an act of parliament in 1959 and given a monopoly on the buying and exporting of cotton. It also had the responsibility of setting cotton prices, with a view to stabilizing the incomes of cotton farmers by protecting them from price fluctuations arising on the world market. In 1994 the Lint Marketing Board was replaced by the Cotton Development Organization (CDO), which was intended to supervise the industry while leaving the trading in cotton to the private sector, as was done to good effect with coffee. However , paradoxically,this strategy had little success in this sector.There remained enormous problems with licensing ginners, zoning growing areas, and cotton seed management.At its height the industry under the new arrangement managed to produce 250,000 bales of cotton in one year. Otherwise annual production was less than 100,000 bales.These cotton production figures compared poorly with those from the 1960s and 1970s when annual total production reached 400,000 bales. Why did the cotton “liberalization” policy fail? Compared to what happened when the Uganda Coffee Development Authority replaced the Coffee Marketing Board, it seems that the liberalization of the cotton sector remained incomplete. The Cotton Development Reform and Agricultural Productivity 107 1. “Produce” here refers mainly to maize and beans. However, the Produce Marketing Board could handle other dry foods, such as peanuts, sorghum, millet, and sesame. 14-2589-3 CH 14:Cels 2262-5 3/26/14 10:44...

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