On Tuesday, 28th October 2014, from 8:20 to 9:00 am, I participated as the guest discussant on the programme: “Talk Back” on Radio One 90FM. The topic of discussion was taxes on agriculture versus subsidies for agriculture. Here below is the transcript of what I said:
It is not a blanket subsidise agriculture. You can have agriculture without food and you can have agriculture with food. The one that I am advocating to be subsidised is the agriculture with food. There is no point in subsidising agriculture without food.
- If I respond directly to this AGOA thing, what kind of agriculture is benefiting from AGOA?
- Is that agriculture with food our agriculture without food?
- And why are we concerned about exporting things to America, when we are not yet able to support our farmers to feed our nation?
Instead we are taxing our farmers who are actually feeding our nation.
- So, I would like to bring back the debate to the domestic front.
- Who is getting taxed?
- How much are they getting taxed?
- Is the tax fair?
- Who should be taxed who isn’t being taxed at the moment?
- Then on the other side of the coin, how are the resources of our taxes being utilised?
Those are the questions that interest me the most.
Let’s start with the whole concept of subsidies. Subsidies is not going around and dishing out money to people. Subsidy can be exactly what we are advocating for. Why has our government or whoever came up with this decision come up with the decision to tax the food producers in the manner that they have decided to do so – indirect taxation; the indirect taxes on the hoe, the indirect taxes on mobile money transfers?
We all know that the farmers are using mobile money transfers; which means those mobile money transfers are necessarily making production higher – the farmer has to spend more money to buy inputs in order to produce food.
Subsidy would be, let us make sure that the production costs are low for the farmer. Let us not look to make money for buying our Hammers (luxurious cars) from the farmer. That is a way of subsidising.
Let us not look to make money from this farmer who is contributing greatly to this nation for buying (in order to buy) all of those luxurious things on the roads of Kampala, okay.
Let us not take money away from the farmer because we are already not providing them with social services anyway. How many hospitals in the rural areas really have the services? You understand.
These farmers at the same time, having to pay high production costs, are not getting value for money because they are competing with subsidised products from the USA.
- I always use the example of Heinz Ketchup and Reco Industries. You go to any supermarket now Heinz Ketchup is cheaper than Reco Industries, why do you think so?
- This is ketchup which was made in America and flown into Uganda, how can it be possible that it is cheaper than Reco Industries?
Look at coffee, Good Africa Coffee from Uganda, go and compare it with the coffees there. Nescafe which is flown in from somewhere, i.e. we exported the coffee beans, somebody is bringing them back processed and is out-competing our own production. Why isn’t Good Africa Coffee everywhere in Uganda first? Why not? These are the things we are talking about.
If Good Africa Coffee is everywhere in our supermarkets, in our hotels, in our public offices, it means Ugandans are employed. It means that the resources are here. But now Good Africa Coffee is being told to compete for the AGOA market. How can it compete for the AGOA market when it cannot even compete for its own shelves in Kampala?
Anyone who does not think that agriculture for food is profitable, has to re-think how they are calculating profit. Everybody needs food. It is a basic need. All of us here today had to have something to eat. Whether we grow it ourselves or we buy it – the majority of us buy it.
Now, who should be the beneficiary of the profit is the discussion of subsidies. Now, if we allow the big corporate to be the beneficiary of the profit of agriculture and we give away our wealth of resources – our land, our human resources and give Monsato or give Kentucky Fried Chicken or whoever these big corporations, Heinz, the profit of our sweat, there is something wrong with us.
Subsidies are about making sure that we are fed as a nation with our own sweat. We are saying, try and make sure that farmers in Uganda, who by the way feed us all, are supported to do that business. Let us stop looking at agriculture for food as informal. It is absolutely necessary that we start looking at it in a formal way.
We are not a welfare state. These farmers are surviving from the money that they make from agriculture. They have to pay medical bills. They have to pay university or school fees.
Now, it is really sad when someone whose school fees was paid for from agriculture, turns around and comes up with these policies which are really ridiculous. Many of the people who are right now in Makerere University, the father has sold land, has sold a cow, has sold coffee, has sold something that they got from agriculture to pay for them.
What are we doing by saying that you can tax a hoe in order to modernise agriculture? That is nonsensical, it does not make sense.
People, let us wake up, we need to have a strategic direction that we are taking. Who is feeding our nation? Smallholder farmers. Do we need food in our nation? Yes. Why are we allowing people to import food from other places; actually which is not food? It doesn’t make sense.
“The surplus production of the perishable goods, such as tomatoes and cabbages in the districts of Lira, Alebtong, Oyam, Otuke and others, has been linked to a drastic decline in the prices.” (Source QFM)
On the one hand you allowing people to bring in, as one of the callers said, tomatoes from other nations to sell here and at the same time you are making it hard for the farmers to produce tomatoes here. Uganda has, is gifted by nature, we should be producing for everybody else.
And I disagree with people who say that we should come up with one crop. Mono-cropping does not guarantee nutrition. It is ridiculous. Our farmers are capable of producing a variety of foods, moreover, even organically, because we are gifted by nature. We do not need a lot of those fertilisers, chemical ones, that people are advocating for. We can produce a lot of food for ourselves to consume here.
Let us raise the taxes for imports and let us protect our market. That is what the EU does. That is what the USA does. That is what China does. That is what we should do.