Agricultural Finance Yearbook 2011

The Agricultural Finance Yearbook, of which this is the fifth edition, reviews developments pertaining to the modernization of the agricultural sector in Uganda, particularly those which have relevance for investment in, and the financing of, agriculture and agricultural marketing. The modernization of agriculture is a key development priority for Uganda but this will not be possible without improving the provision of a wide range of financial services to farmers, agro processors and traders.

One of the most striking features of agricultural finance in 2011 was the very rapid growth of loans and advances to agriculture by supervised financial institutions (banks, credit institutions and deposit taking microfinance institutions). New advances to agriculture grew by 60 percent in 2011, albeit from a relatively small base. Much of this increase was a result of a substantial expansion in post –harvest lending by commercial banks, with loans secured by warehouse receipts, which is testament to the fact that the efforts made in recent years to reform policy and legislation related to warehouse receipts and to undertake capacity building in this area have begun to bear fruit.

Food prices in Uganda were driven up sharply in 2011 by a combination of domestic and regional supply shocks and higher global food prices. The Yearbook analyses the recent food price shocks in Uganda and discusses policy measures to improve food security. Higher global food prices are likely to be a feature of the global economy over the long term, which will provide Uganda with an opportunity to exploit its comparative advantage in agriculture and boost agricultural exports.

The Yearbook explores in detail various issues pertaining to investment in value chains in agriculture, including the role of market information and the need to encourage greater utilisation of high quality seeds, fertiliser and other modern inputs. The Yearbook also discusses some important innovations pertaining to agricultural finance, including micro-factoring in Kenya and new approaches to the challenge of training agricultural bankers.

We recommend the Yearbook to everyone interested in agricultural finance and the modernization of agriculture in Uganda.

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