By ELIAS BIRYABAREMA
In Summary
- Many smallholders are unaware of the falling crude oil prices since July, and even the better informed doubt any savings will filter through the web of agents and brokers that dominates much of African farming.
- Only in South Africa, where fuel price changes filter through faster and the government is stricter about ensuring reductions are passed on, have farmers seen major savings.
From the coffee plantations of Uganda to the
maize fields of Zambia, the collapse in world oil prices has so far
brought few benefits for African farmers, with stubbornly high pump
prices and voracious middle-men maintaining a squeeze on margins.
Only in South Africa, the continent's most
sophisticated economy and one of its top agricultural producers, have
fuel prices -- tightly regulated by the government -- come down enough
to make a difference.
Elsewhere, many smallholders are unaware of the
near-halving of crude oil prices on world markets since July, and even
the better informed doubt any savings will filter through the web of
agents and brokers that dominates much of African farming.
"If it's true fuel prices are falling, it is
possible these traders will increase what they're paying us," said
73-year-old Ugandan Gladys Kavuma, who has been farming two acres of
coffee in Buloba, 15 km (10 miles) west of Kampala, for four decades.
"But I doubt prices will ever improve. They will
simply come up with another reason to keep prices low," she said, with a
resigned shrug.
A typical Ugandan smallholder who has brought up
five children on the back of her meagre coffee earnings, Kavuma's plight
is replicated across sub-Saharan Africa, which relies on small farmers
for 80 per cent of its food.
In essence, weak government regulation means fuel
importers and distributors can raise pump prices as crude oil rises, but
drag their feet when it drops.
"We have heard and read that the cost of oil has
dropped globally but unfortunately we are yet to feel the effects," said
Jack Kneppers, a Dutch florist who employs 500 people at his Maridadi
farm in Naivasha, northwest of Nairobi, Kenya.
"The price of fuel has dropped by a few shillings and this has very little if any effect on our cost of production."
Delayed drop
In countries such as Zambia, Africa's number two
copper producer, oil's dramatic decline has been offset by currency
weakness as foreign investors have retreated from frontier market debt
and stocks due to concerns about global growth.
Furthermore, fuel imports are often paid for months in advance, meaning any benefit from the collapse in oil prices is delayed.
In its first price adjustment since April, Zambia
dropped pump prices by 2.5 per cent at the end of November based on fuel
shipments bought in August, when crude was only just beginning its
slump.
Over that time, the kwacha weakened 8 per cent, eroding much of the impact of the oil price decline.
"The drop in global oil prices has not been felt
in Zambia. The reduction in prices has been extremely negligible and
means nothing to the farming community," said 62-year-old Request
Muntanga, who owns a 500-hectare maize farm south of Lusaka.
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