Improving Agricultural Market Performance:
Developing Agricultural Market Information Systems
106
international platforms (e.g. FEWSNET) which are published on monthly basis and may,
therefore, be too late to be relevant to transactors.
b.Quality premiums not reported: The average prices which are reported do not take
acc t of quality differences. For instance, though it was noted during the field visit that
the as a quality premium of close to 50% for maize, the reported prices did not capture
this It is therefore difficult for producers and grain handlers to decide to target quality-
sen ve premiummarket segments and potentially earn higher household incomes. This is
one the barriers Ugandan producers face in accessing lucrative regional and relief food
markets (Onumah and Nakajjo, 2014).
c. Missing information on output forecast and stock levels: For farmers and traders who
are interested in deferring sale of produce immediately after harvest as well as banks keen
to provide them with inventory finance, prevailing prices are insufficient as they also
require information on overall output as well as existing stock levels in order to take a
position on future price levels based on demand and supply projections. This information is
largely unavailable in Uganda.
d. Prices for quality inputs: Farmers consulted indicated the need for information on prices
and sources of quality inputs. Variability in the quality of available agricultural inputs is
reported to cost farmers about US$10.7 million to US$ 22.4 million per annum (IFAD, 2015).
Inputs risk can be reduced and, along with it the associated losses, if reliable information on
credible suppliers is provided. There is a dearth of this type of information in Uganda.
e. Access to archived data: Another important gap in information is the availability of reliable
historical d on commodity prices as well as on output and demand. These are important
in underta g trend analysis but there are reported difficulties in accessing such
information
Standardisatio weights, measures and quality bring structure to commodity marketing and
reduce uncertainty in transacting. The development of agricultural commodity exchanges and
warehouse receipt systems (WRS) can contribute to the emergence of structured agricultural
marketing and finance systems, which will, in turn, create incentives for investment in increased
farm productivity and output (Onumah 2012). COMCEC (2017) noted that commodity
exchanges improve marketing of physical products; offer price hedging instruments; and boost
links between agriculture and finance, and making the commodity sector more efficient and
competitive. Acknowledgement of these potential benefits encouraged many African countries
to promote exchanges in the post-liberalisation 1990s. Uganda was among the frontrunners in
this, having set up the Uganda Commodity Exchange (UCE) even before the South Africa Futures
Exchange (SAFEX) was launched in 1996. The UCE has, however, failed to take off as have so
many other similar initiatives in Africa (African Development Bank, 2013; and Bjerga and
Davison, 2015). Several factors have been identified as hampering the development of
27 At the time of the visit in August 2017, the prevailing market price per kilogram of maize was UGX 800. However, during
that same period, the price per kilogram for Aflatoxin-free maize was UGX 1190/kg, a premium of 48.8% which farmers and
traders could have taken advantage of if informed.
28 An official of the new Uganda National Commodity Exchange (Mark Kaija) reported considerable difficulty accessing
historical price and output data for the major grains and other export crops to be traded by the exchange (pers. comm.
13/10/2017).