“In the development world, the term ‘middlemen’ comes with somewhat negative connotations. They have been called ‘coyotes,’ ‘hyenas,’ and ‘predatory rent-seekers,’” said Stephen McCarthy, a Chemonics value chain expert with 35 years of experience.
Many times, one of the bottlenecks in the development of the agricultural sector, has been low prices of agricultural products by the many middlemen who cheat farmers hence making many people hate agriculture as a form of employment.
The government through the Uganda Warehouse Receipt Authority started a system that helps farmers/traders to sell their commodities at the highest price at the Uganda National Commodities Exchange (UNCE).
This is how it is done:
The owners of the commodities bulk and bag good quality (well dried, foreign matter and bad odour free) and deliver it to the warehouse. It is checked and if it passes, it is accepted and stored.
The warehouse receipt is made and presented to the depositor.
A depositor of maize, rice or beans in a warehouse with a warehouse receipt from the warehouse keeper has an opportunity to have this receipt listed for trading on the Trading Floor of the Commodities Exchange. This exposes and promotes a rather small scale holder to a wide and export market where quality attracts a premium.
Once the depositor/farmer is offered a favourable price, he/she is at liberty to sell to whoever, and stocks can only be released to the new owner/buyer after all parties with a stake in the commodities have been settled (e.g.lender, warehouse operator, etc).
Ben Ssebuguzi is an economist and entrepreneur.
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