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Impact of Globalization on Agriculture in Uganda Definition: Globalization: is a process by which regional economies, societies, and cultures have become integrated through a global network of communication, transportation, and trade. Globalization according to Webster’s Dictionary, means: “to make worldwide in scope or application”.
Globalization can be viewed as the integration of inputs and outputs into global markets, sharing of information and knowledge, and promulgation of rules governing such integration The term is sometimes used to refer specifically to economic globalization: the integration of national economies into the international economy through trade, foreign direct investment, capital flows, migration, and the spread of technology.
Overview of the effects of globalization on world trade From an economic perspective, the primary engine that is driving the complex effects of globalization on trade is liberalization. Globalization emphasizes that trading among member countries that they should open up their markets and that trade in goods and services should be “borderless. ” In Uganda, globalization is illustrated in part by the kind of policy framework that Uganda has pursued over decades.
In line with the commitments that Uganda made towards the World Trade Organization (WTO) protocols, Uganda’s broad policy objectives have continued to focus on: (i) The need to stabilize the economy, partly through restoring Agriculture discipline; (ii) The liberalization of consumer and producer prices in order to align prices in favor of export-oriented production and import substitution; (iii) Progressive movement towards a realistic, market-determined exchange rate within a system of restrictions; iv) The strengthening of the balance of payments and the normalization of relations with creditors; (v) The removal of trade restrictions; (vi) The privatization and rationalization of state enterprises. Benefits of globalization of agriculture in Uganda. In Uganda, the liberalization of agricultural commodity prices and the abolition of various marketing boards have had the short-term effect: ? Increasing revenues to farmers. ?Lowering marketing costs. ?Raising the profitability of agricultural production, coffee included. Under the liberalized trading arrangements, coffee buyers pay readily. In that sense the liberalized framework is more beneficial to the farmer. ?Impact of Price reductions: during the pre-liberalization period Ugandan farmers were earning approximately 30% of the international coffee price. Under the liberalized coffee trade period, farmers today earn approximately 50% of the world coffee price. ?An important assumption under globalization is the existence of a good information system.
In Uganda Coffee Development Authority has made attempts to link with a private telecommunication firm, MTN, the globalization of agriculture in Uganda which prices are communicated to farmers. Besides the information that is accessible through MTN, the Central Bank (Bank of Uganda) publishes monthly price trends for different coffee types. ?Under globalization, new research systems of developing countries include diverse organization that is to say: National Agricultural Research System (NARS).
This includes all organization that conducts agriculture research and extension. There are various research organizations in Uganda, such as: NARO, Kabanyolo under Makerere University Agriculture Institute, Namulonge Agriculture Research Center and Kawanda Research Center. Wich have helped us in getting new varieties of crops. ?Technology: In Uganda agriculture has improved technologically, for instance: irrigation schemes are being transformed, farmers are using fertilizers is increasingly. ?Thank to democratization with is under globalization policies is providing ural populations political information which vital for developing small farm agriculture. This is done through existing NGOs like HEIFER INTRNATIONAL. ?Globalization influences in the policy formulation in agriculture sector, an example is PMA (Plan for the Management of Agriculture). Disadvantages of globalization of agriculture in Uganda. ?Mismatched Information systems: though there is accessibility to information, this information is still very low to the farmers; this effort is still new and has not yet proved effective.
The overall reality is that the rural coffee farmer in Uganda is not yet effectively connected to any effective information systems to be able to benefit from globalization ??? hence the perpetual vulnerability that continues among Ugandan coffee farmers. ?Lack of national negotiators in WTO: because WTO sets conditions to which member countries are supposed to abide by. The process of arriving at these conditions involves consultations of sorts. The biggest constraint facing poor countries in this connection is that they have few qualified negotiators that are able to articulate a favorable position for their countries.
The result includes poor interpretation of the WTO protocols, which leads to poor policy formulation. Today Uganda actually lacks a clear trade policy. ?Unfair trading arrangements enslaving the majority and benefiting the minority powerful Since the larger manufacturing companies are already enjoying economies of large production; these giants easily force small manufacturing firms in less developed countries out of business once they enter the markets where the small firms operate. Under globalization, Foreign Direct Investment is assumed to easily flow towards low cost areas of production. It is argued that when liberalization is permitted to work, then producers are likely to move their production cheaper. Countries like Uganda would attract additional benefits of creating employment and by reducing the cost of transporting raw coffee, which tends to be bulky and robs the farmer of additional income. ?Unrealistic expectations in capital movements. In Uganda approximately 50% do not read or write.
The majority farmers are rural-based and live below the poverty line. Such people lack what it takes to cross national borders to engage in trade because they lack the basic knowledge and skills. ?Weak National Policies: An example of the weak policies is with regard to efforts by government to liberalize the provision of services even further via the National Agriculture Advisory Development Services programme (NAADS). This initiative is intended to ultimately commercialise extension service delivery. Recommendations.
Generally, globalization may have some positive effects. To enhance some of these positive effects, renegotiation of terms with the WTO and other trade partners is needed. This will however require benevolent, patriotic Ugandan technicians who study the WTO protocols. These should be people who adequately interpret Uganda’s reality and help to negotiate appropriately with Uganda’s development partners. Besides, they should help to develop appropriate policies that meet the requirements of the renegotiated protocols in ways that benefit the poor farmers.
Place vital information and knowledge in the hands of farmers countrywide. Do not simply avail information to farmers. Train them on how best to use it for their advantage in the coffee trade. As farmers cut down their costs of marketing through better information available to them, they may earn more and be encouraged to produce even more. Expand rural electrification system An enlarged electric net will contribute towards adding value to both coffee and other agricultural products, placing the farmer in a better position to earn a higher income from his/her labors.
This is one of the areas for negotiation with development partners, alongside hydroelectricity development. Solar energy also needs to be developed as part of government policy to improve the living condition and production environment of the majority of the people who live in rural areas. For Uganda to benefit more from globalization, fundamental changes must be made with leaders, as well as that of technicians (public servants), who play a big role in determining the economic decisions that are made on the agricultural products.
Massive investments into education are necessary to uplift the overall human effort so as to prepare a stage for greater value addition to the coffee products at all stages within Uganda, so as to earn better incomes at family and national levels. Bibliography: Report: by Edward Mubiru, World Vision International, East Africa Regional Office Report revised November 2003 Ministry of Finance, 2003/04 National Budget, June 2003, Kampala, Uganda