Dear FSN Team,
Thank you for this very detailed well researched document and for providing us with a chance to make some comments.
On behalf of SEATINI-Uganda i would like to make the following comments on the issues of trade, investment , value chains and markets and their impact on inequalities among Small Scale producers.
1. Inequalities and value chains and markets: It is important to have a shared understanding of the term Structural Transformation and what it entails. The process where the agricultural sector is giving way to manufacturing and services is not Structural transformation as it is an indicator of premature deindustrialization. The paper also asserts that this transformation is typically accompanied by increases in income. Whose incomes? Most often the Small scale producers' incomes are negatively impacted by this process. There is a need to analyse further the reality of value chains at the national and local levels and the role of the Small scale producers/ Farmers (SSF) therein. Most often the SSF are edged out of the markets as a result of market deregulation , lack of information about product specifications and standards , poor infrastructure ( roads , storage facilities..) and weak/non existent cooperatives which would have helped the SSFs to bulk and also negotiate for better prices for their produce. The domination of value chains by the private sector actors with limited government intervention to protect the rights of farmers has also negatively affected the SSFs.
2. Trade liberalization: In addition to the issues raised in the paper, please also consider the issue of the impact of the ongoing trade negotiations at the multilateral and bilateral levels. At the WTO level under the Agreement of Agreement of Agriculture (AoA) , a number of issues critical to agriculture i.e. domestic subsidies, box shifting , Special Safeguard Mechanism (SSM), Public Stockholding for food Security have been put on the back burner. These issues must be urgently addressed. Although trade liberalization leading to a reduction of tariffs can lead to availability of cheap food on the market but most often it leads to the collapse of local production. For example the influx of chicken parts from the EU to a number of West African Countries ( Cameroon , Senegal , Ghana.. ) in 2017/18 led to the collapse of the poultry sector in those countries but also the collapse of maize production.
3. Investment : The issue of investment frameworks and their relation to FSN should be addressed. Current investments especially the land based investment negatively impact on SSFs as they most often lead to land grabs and displacements. In most African Countries the investment legal lack adequate provisions to protect the SSFs. For example the Uganda Investment Code has no provisions for Human Rights Impact Assessments ( HRIA). This is despite the fact that there are Guiding Principles on large scale land based investments developed by the Africa Union , ADB and UNECA. The UN binding Treaty on Business and Human Rights also provides for guidelines to protect the rights of SSFs. It is imperative that these Principles are mainstreamed in the legal frameworks and in the Bilateral Investment treaties in order to make them legally binding or else they will remain best endeavors.
4. Inequalities and Finance : Other issues to consider under Finance is the link between financialization, the commodification of social services and SSF's welfare. The push for financial inclusion has seen the mushrooming of microfinance, money lenders and even online lending. Most of this financing is unregulated and the SSFs find themselves indebted as they have to find money to access the commodified social services. Yet the price of their produce is dictated by the middle men. In such circumstances the youth are running away from rural areas and agricultural production. Others are selling of their land to buy motor bikes to engage in transport business ( commonly known as Boda Boda).
5. Fiscal policies: The fiscal policies ( budget and Tax ) have an impact on FSN. In most Countries in Africa, despite the Commitment under the Maputo Protocol to provide 10% of their budgets to agriculture , their budget to agriculture is below 5%. This has greatly affected agricultural production and food security. Many African countries have not budgeted for food reserves and infrastructure to be able to distribute food from areas where there is plenty of food to areas of scarcity. In Uganda just recently in North Eastern Uganda the people were dying of hunger yet in the South West food was in plenty. Tax proposals can also have an effect on FSN. In Uganda for the FY2022/23 government instituted a tax on animal feeds which led to an increase in the price of eggs.
Thank you for the opportunity to make our comments
Ms. Jane Nalunga