• Authored By: Solomon Stephen Nuwagaba
31 Aug 2023

Agriculture is an essential sector in several ways: it feeds the world and contributes to economic development. By 2050, at least 9.7billion people will draw food from the sector, and it has been billed as one of the most effective strategies for reducing extreme poverty.

Uganda’s agricultural potential is among the best in Africa, with low temperature volatility, fertile soils, and two rainy seasons in a calendar year – leading to multiple crop harvests per year.

According to the UN’s Food and Agriculture Organization, Uganda’s agricultural land has the potential to feed 200 million people. 80% of Uganda’s land is fit for agriculture but only 35% of it is being cultivated.  In FY 2021/22, agriculture contributed 24.1% to the GDP, and 33% to export earnings.  Uganda Bureau of Statistics estimates that about 70% of Uganda’s working population is employed in agriculture.

However, agricultural growth is impaired by poor post-harvest handling, lack of quality packaging capabilities, insufficient storage facilities, shortage of agricultural credit, the lack of all-weather feeder roads in rural areas, a complicated and inefficient land tenure system, and limited knowledge of modern production practices.

The agricultural sector’s growth is two to four times more successful at boosting the earnings of the poorest people compared to other sectors. However, shocks such as COVID-19-related disruptions, harsh weather, pests, and conflicts, which are hurting food systems and leading to increased food prices and growing hunger, put agriculture-driven growth, poverty reduction, and food security at risk.

In a world characterised by rapid technological advancements and evolving consumer preferences, the agriculture sector finds itself at a crossroads. The traditional styles of commodity trading and supply chain management are being reshaped.

As countries strive to balance the scales of improving commodity trading and risk management, maintaining international competitiveness in traditional bulk export commodities, linking producers to modern supply chains targeting higher-value urban markets, and meeting stringent product standards for higher-value exports, a new era of agricultural innovation has emerged.

The backbone of any successful agricultural economy lies in the efficient trading of commodities. Farmers, traders, governments, urban retailers and consumers should embrace advanced technologies such as blockchain and AI-driven analytics. Blockchain is a digital ledger technology that allows secure and transparent recording of transactions. AI-driven analytics refers to the use of artificial intelligence algorithms to analyze large amounts of data and extract insights.

Blockchain and AI-driven analytics streamline processes, enhance transparency, and reduce the risk associated with commodity trading. These innovations empower farmers, traders, governments, urban retailers and consumers to track the journey of products from farm to fork, mitigating concerns related to authenticity and quality. By harnessing real-time data, traders can anticipate market fluctuations, enabling them to make informed decisions that safeguard against economic volatility.

For developing countries like Uganda that are heavily reliant on traditional bulk export commodities like grains, coffee, and oilseeds, maintaining international competitiveness remains a challenge worthy giving a thought. Maintaining international competitiveness remains a challenge, especially for developing countries that face various challenges such as limited resources, poor infrastructure, and lack of access to technology.

Changing climate patterns, geopolitical tensions, and shifting consumer preferences should compel stakeholders to adopt sustainable farming practices and invest in research and development. By prioritising crop resilience and adopting precision agriculture techniques, developing countries can fortify their positions in global markets, safeguarding rural communities’ livelihoods.

The shift towards urbanisation has created demand for higher-quality produce in urban centers. This shift presents an opportunity for farmers to transition from traditional subsistence agriculture to high-value specialized crops. To tap into these lucrative markets, government should establish robust supply chains that connect farmers directly with urban retailers and consumers. This approach not only ensures a steady income for producers but also guarantees urban consumers access to locally-sourced nutrient-rich products.

Consumer awareness about health, safety, and environmental sustainability grows, international product standards has become more rigorous in the recent past. In response, agricultural producers should invest in compliance measures that ensure their exports meet these global standards. By embracing eco-friendly practices and traceable sourcing, countries are able to secure a competitive edge in the global market for premium products.

In conclusion, the convergence of technology, sustainability, and market dynamics is revolutionising the agricultural landscape. The concerted efforts to enhance commodity trading, adapt to shifting consumer preferences, and meet evolving product standards are driving a holistic transformation that benefits stakeholders at every level of the supply chain. As we rally around this new era of agricultural innovation, the future promises a more resilient, interconnected, and prosperous global agricultural industry.

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