louis kasekende : shaping the future of smallholder financing in uganda keynote address by dr louis kasekende, deputy governor of the bank of uganda, at the high - level meeting on “ developing approaches for financing smallholder household in uganda ”, kampala, 20 april 2016. * * * good morning ladies and gentlemen. i would like to thank the organisers of this high level meeting, the uganda agribusiness alliance, for inviting me to give a keynote address. the modernisation of agriculture is probably the most important developmental challenge facing uganda ; without agricultural modernisation it is very difficult to envisage how uganda ’ s economy will ever be able to achieve middle income status. the vast majority of farmers in uganda are smallholders and they produce almost all of the country ’ s agricultural output. ninety six percent of total farm output in uganda is produced on farms of five hectares or less in size. there is no feasible route to agricultural modernisation which does not place the smallholder at its centre. although ugandans often perceive themselves as “ blessed by nature ” our agricultural performance has been poor for several decades. aggregate output growth has been weak and the growth that has occurred has largely been the result of increases in land acreage under cultivation and increases in the agricultural labour force. both average land and labour productivity have been stagnant for decades. the 2012 / 13 uganda national household survey indicated that two thirds of farmers are classified as subsistence farmers. an earlier survey found that even the most commercialised quintile of farmers marketed only 50 percent of their output. modernising smallholder agriculture in uganda will require helping farmers to improve their farm practises, utilise more modern farm inputs, especially high yield variety ( hyv ) seeds and produce more output for the market, thereby raising yields per acre and labour productivity. we know, from the work done on demonstration plots supported by development agencies that farmers can, in principle, achieve large increases in their crop yields even with relatively low input technologies combined with the adoption of good agricultural practises. ugandan smallholder farming has the potential for transformation but the constraints to this transformation are both large and multifaceted. a lack of access to finance by smallholders is one of these constraints, although not necessarily the most binding constraint for the majority of smallholder farmers at this early stage of agricultural development. to tackle the multiple constraints to the modernisation of smallholder agriculture, we need to adopt, and persevere

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