Dry spell hits Isingiro farmers hard
Amidst the ongoing dry spell and price fluctuation of agricultural products, farmers are counting losses.
Matooke, Dairy and tea farmers are the most affected and majority of them are currently chocking on loan burdens.
Keep Reading
The dry spells has wrecked havock on agriculture affecting both production and prices.
Farmers who had borrowed money for investment into their agricultural ventures are now struggling to break-even due to low production and price fluctuation.
"When drought hits, we get a challenge of under production which affects savings and loan repayments," says the general manager for Mushanga sacco.
Tea, banana, coffee and dairy farmers are the most affected which has crippled the financial transactions.
For example, a bunch of Matooke that used to buy shs20000 now goes for between shs1000 and shs 2000 and a kilo of tea green leaf has since dropped to shs200.
" You can imagine now I harvest over 200 bunches of Matooke but I can't even pocket shs500000 yet I have loans, school fees and other needs," Joram Turyasingura, a banana farmer in Isingiro.
Due to dwindling prices for agricultural products, financial institutions are now struggling to recover the monies they lent to farmers as investment due to variations in record keeping and cash in-flows.
"When we are lending money, you find that borrowers don't have records which affects our appraisal for loan disbursements," says Phillip Kansiime , the General manager Nyakayojo People's sacco.
While the financial institutions are fighting hard to recover their monies, they also have an obligation to pay back the money they borrowed from other financial institutions.
This has seen the cost of lending and borrowing money become quite expensive for the local farmers.
Besides the huge interest rates at which these saccos borrow their money from other lending institutions, they also decry the hefty taxes levied against them which include among others income tax and tax on members interest.
"When government levies huge taxes on saccos, it's the members that suffer a lot because their dividends are normally cut, " Kansiime says.
