GO TO THE FARM:What happens in Uganda’s gardens could ‘save’ Uhuru’s presidency in Kenya

Nairobi

One of the many exchanges after last week’s column, “A Revolution Museveni Didn’t Plot Is Happening In Uganda’s Bushes” was with a good Ugandan, who prefers not to be named, so I shall abbreviate his name as NA.
He is right in the midst of this slowly unfolding agricultural “revolution”. His is a fascinating and rare insight from a man who has book knowledge on the subject, but it has been enriched by practice. We will let his comments flow verbatim.

“Following your article on agriculture, allow me to provide you with more information about private investment in agriculture and developments there,” he wrote.

“Agriculture is one sector that has been doing well for the last two years or so. In my home district of Kiruhura, people’s incomes have gone up and the standards of living have greatly improved due to milk and cattle sales. “In addition, and for the first time, cattle farmers are venturing into growing matooke, beans, maize, etc. This also means that people do not only have cash to spend but are also well fed”.

The benefits
He then adds: “The markets in Rwanda and Southern Sudan have also contributed to this boom. Last year, traders from Rwanda were buying our local cows (Ankole long horn) at between Shs3 million and Shs4 million.”
He then tackled the big question: “Why are well established business people venturing into agriculture?”
“Look at this scenario”, he wrote. “There is a local farmer in my area who is now earning Shs19 million per month from milk sales (his cows are producing 900/1,000 litres per month) which comes to around $7,000. The animals on his farm are worth about Sh500m.

“Now, in my real estate business, I have been trying to sell a friend’s house in Kololo for $2.5m. The monthly rent from the house is $7,000.” (The same amount the local farmer in his village makes from milk a month).
“This is a house on 1.3 acres of prime land. When you look at this case it means that in town, you need $2.5m ( about Shs6.6 billion) to make $7,000 a month, while in the village the maximum is Shs500m.
“And on this, I am calculating current market values (of milk cows) otherwise the man has never invested anything near to that amount”.

And there is a political twist, which I had completely missed. His analysis is that, “agriculture currently has less competition from foreigners (Indians, Chinese – his description not mine) who are making it difficult for local traders. “My prediction is that in the next five years, the number of local business people deserting Kampala for rural farming will have more than doubled.”

So just how much all together are the chaps in Kiruhura making from this milk and food business with Rwanda and South Sudan? I pressed him. “I don’t have the exact figures for Rwanda and Sudan as most of the trade is still informal, but I was told by the milk traders that Rushere Town (the commercial town of Kiruhura District) and the surrounding sub-counties produce at least 300,000 litres of milk for export to Kampala, Mbarara, Rwanda and it brings in around Shs4.5b per month to the area.” But NA also had some insights into the leasing of land for farming and dairy.

First, he explained: “There is the speculation that land prices are going to continue rising due to population pressure and development, and as such, most owners are not willing to part with their pieces on a permanent basis.

“People witnessed the late 1990s to early 2000s property boom in Kampala, especially people who had sold their former government-owned houses for peanuts and later saw them growing several times over in value. So many folks are unwilling to fall in the same trap,” NA wrote.
“The second factor, partly connected to the one above, is that as prices rise, it makes more business sense to lease than to buy land.

“One, because you most likely can’t afford and, second, buying the land would erode all your capital and leave you with nothing to inject in your business. “You would rather lease the land and establish a business and use the profits to pay the lease fee. In future, if the business is bad, you can get out without losing a lot of money in form of land purchase. “In my area, because of the boom mentioned earlier, land prices are too high for buyers of land - other than the ‘Kazindas’ from Kampala.

“Therefore, people with large chunks have come up with a new type of lease arrangement of sorts where you can graze your animals on their land for an agreed amount of money per cow per year. The rates started at Shs50,000 and have now risen to Shs140,000.

“A dairy cow can give a minimum of 10 litres of milk per day which would mean (10x500x30)=Shs150,000 per month. If you take a minimum of eight months milking time per year, that would come to Shs1,212,000.
“So, a farmer can conveniently lease land and still make good money without incurring the lump sum payment for purchase of land. This scenario applies to many other businesses”.

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The impact on Uhuru’s presidency

Which brings us to the issue I have mentioned twice, the recent election of Uhuru Kenyatta and William Ruto as president and deputy president of Kenya respectively. What has it got to do with these new exciting private investments by Ugandans in agriculture?

One reason is that we need to understand some of the forces that propelled the Uhuru-Ruto ticket to victory. Uhuru is the undisputed political king right now of the Kikuyu peoples of Central Kenya, the largest national group in Kenya. Ruto is likewise, the king of the Kalenjin community of the Rift Valley, a remarkably vote-rich region.

In the December 2007 election that ended in dispute and horrific violence, Uhuru backed former president Mwai Kibaki, who faced off with former Prime Minister Raila Odinga. Raila lost to Uhuru in the latest March election. This time again, Raila disputed the election, but the Supreme Court ruled in Uhuru’s favour and Raila honourably conceded. The nastiest post-election violence of early 2008 happened in the Rift Valley in which Ruto’s Kalenjin community, as they did in 1992 and 1997, attacked the Kikuyu “bafuruki” who have over the last 100 years or so become significant landowners and the most prosperous farmers in the Rift Valley.

The charges Uhuru and Ruto are facing at the International Criminal Court at The Hague arise from that clash, with Ruto accused of inciting the Kalenjin to attack the Kikuyu in Rift Valley and chase them off their land, and Uhuru then organising Kikuyu gangs to fight back in revenge/self defence. Both men have continued to deny the charges. Just as the 2008 violence was over land, the 2013 alliance between Uhuru and Ruto was also over land. Basically the two sides called a truce and took a break in the dispute over land. Effectively, the Kalenjin who took over Kikuyu farmers’ land will not have to return it at least for the next five years. And the Kikuyu, who have title, will not try to repossess it.

Essentially, victory for the Jubilee alliance of Uhuru and Ruto was partly a vote for a break from the emotional and divisive issue of land that threatens to tear Kenya apart. The land reforms that some in the Raila were pushing, didn’t win the day. However, precisely because the people who took land in the Rift Valley don’t have titles, they will not invest much in it. And the Kikuyu farmers who have the titles and would have farmed, don’t have access so can’t work the land either.

This is very important for Uganda, because as Kenya figures out how to reach some resolution of its land issues, for the next five years or so it will hardly increase its food production because the Rift Valley and other areas hit by land disputes are the country’s breadbasket.
From a regional policy point of view, therefore, I see the Uhuru government being open-minded toward Kampala, as Ugandan stocks will keep Kenya’s food politics from getting radicalised (if prices skyrocketed because of shortages).

A few days ago, we saw early signs of this when The East African reported that after many years, Kenya had finally issued a five-year licence to Uganda for a container freight station built at the port of Mombasa to ease delays for its good caused by congestion.

The rise of large scale commercial food production at this point means that if Kampala can nail down access issues with Nairobi, we could be on the cusp of one of the largest creations of wealth by indigenous Ugandans “from the soil”, easily beating the moneys being made from state capture, and mega corruption.

The writer can also be reached at twitter@cobbo3

cobbo@ke.nationmedia.com