The coffee bill that seeks to rationalize the Uganda Coffee Development Authority (UCDA) to the Ministry of Agriculture, Animal Industry, and Fisheries (MAAIF) has sparked debate in the country. The proponents of the bill argue that rationalization of government agencies is to cut costs, while the opponents say the bill is targeting to make coffee farmers and traders poor and therefore, not in good faith.
The proposal to start UCDA in 1990 provided for a revenue source so that it would not need money from the government. The recommended fund was called Cess, a small service charge of 1% on coffee exports to cater for UCDA’s administrative expenditures.
Research has it that this recommendation was approved by the government, so UCDA never needed money from the government. The problem may have come when the cess was increased to 2%, and following its increase, the UCDA started getting much money, which attracted the government’s attention.
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This came at a time when coffee production was increasing so much that the cess revenue became big, then the Ministry of Finance decided to take all the cess and UCDA became another agency needing money from the government, a fatal mistake made by the authority. Instead of lowering the cess now that coffee exports were increasing, the finance ministry raised it and collected huge amounts of money.
The challenge now is that the government has taken over those revenues and decided to make UCDA another department in the Ministry of Agriculture, something similar to privatization. In 1987, the foreign supporters of privatization recommended that Uganda either dissolves or sells all government banks since they were unprofitable and insolvent. The government fought to restore Uganda Commercial Bank (UCB) to profitability and indeed returned it to profitability as it had always been since 1965, when it was created.
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When the government of Uganda succeeded in making it profitable, the neocolonialists said it would now get a better price. So ideally, the reasons they were giving for dissolving and privatizing our banks were deliberately misleading; they were not telling the truth of their intentions.
In the case of UCDA, clearly the problem is not cost because, with the huge growth in coffee exports, a cess of even 0.25% of exports would cover its requirements for supervision of the quality of Uganda’s coffee exports, promoting coffee research, and promoting increased production. In all the countries visited by Uganda officials for benchmarking (Costa Rica, Columbia, Madagascar) to learn about best coffee export practices, they all had autonomous coffee export institutions that were doing well.
For anyone who has engaged in coffee exports in Uganda or knows anything about coffee exports, it is frightening to imagine exporters looking everywhere for absentee bureaucrats, often scattered anywhere in a department in the ministry of agriculture. Basically, the matter of rationalizing UCDA could be put on a referendum so that the population and coffee stakeholders can decide.
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The most efficient services come from specialized institutions whose knowledge and expertise take many decades to learn and achieve. It is unimaginable, for example, to make Mulago Hospital a department in the Ministry of Health or Makerere University a department in the Ministry of Education. The low quality of service delivery in many government departments deserves improvement, not additional work, and throwing away institutions like paper towels is very difficult to understand.
Of course, as usual, the 11th Parliament is full of majority MPs and ministers who are ignorant about what they are doing; they are just politically charged, and it is a disaster for the future of this country both socially and economically.
