UNDP Around the world

Value chains: Supporting inclusive markets in agriculture and trade in Uganda

UNDP Uganda
Grace Lawilu wakes up at cockcrow every day and heads to the garden to plant seeds, dig out weeds or harvest. Photo: Edga Batte/UNDP)

Grace Lawilu, 49, is a rice farmer in Northern Uganda, close to the border of South Sudan. Scattered homesteads made up of wattle huts and mud, separated by green thickets and walkways, make up this largely undeveloped expanse of swampy grassland.

This is where Lawilu has lived for the last 35 years as a mother of 10. Although she is primarily growing rice, she also learned how to cultivate other crops to diversify her income. On average, Lawilu earns about US$ 340 from each harvest, which she uses to take care of her family and for investment.

 “Supporting my children in school is no mean feat as I am also the family’s bread winner. I plan to construct a better home for my family and this will be from my savings at the Village Savings and Loan scheme,” she explains.

Highlights

  • The project, funded by UNDP and implemented by local partners with the government, is helping small scale farmers access international markets and improve their products.
  • Five top commodities (coffee, rice, honey, beans and cassava) were selected for their market potential, inclusiveness of the poor, and division of labour among other development partners.
  • Farmers are trained in good farming practices, including post-harvest techniques, to ensure they get high yields and a fair price for their produce.

Grace is one of 253 members of the Palaro Owalo Growers Cooperative, supported by a UNDP-funded project aimed at developing access to markets and trade for small scale farmers. To gain a footing in international markets, small producers often need support to boost the quality and competitiveness of their goods.

The US$ 2.6m project addresses these challenges – cited in Uganda’s current agriculture Development Strategy and Investment Plan – to help shift agricultural production from subsistence farming into commercialized mode, and create income-generating activities for the poorest communities. The intervention works to improve competitiveness in the markets by working for a greater integration of producers, retailers and consumers in the value-chain.

Kilimo Trust, an agricultural development organisation implementing the project jointly with the Government of Uganda, conducted a study of the value chains of five top commodities in the country (coffee, rice, honey, beans and cassava), selected for their market potential, inclusiveness of the poor, and division of labour among other development partners.

On the supply side, stakeholders were mapped based on their roles and opportunities offered along the value-chain. On the demand side, potential market off-takers – companies that invest initial capital for a guaranteed share of the yield – were compiled based on their capacity to do business with smallholder farmers and their readiness to offer competitive prices for their commodities.

Walter Ross Ojok, production manager for Equator Seeds Limited, the main off-taker for rice seeds, says that they are dealing with more than 30,000 farmers in cooperatives and groups. These farmers are given training before they are allowed to buy the rice seeds, which costs US$ 1.13 per kilogram. Farmers are taught good agricultural practices, from production to post-harvest handling, to ensure that whatever they produce is of good quality and guaranteed a premium price.

So far, 20 fully functional business linkages have been created between processors and small enterprises in the three commodities’ value-chains, and it is expected that at least 200 small to medium enterprises will be have access to productive assets like finance, market information, extension services, and technologies.

The Palaro Owalo Growers Cooperative’s secretary-general, Matthew Abwoch, says that they have been able to sell their produce as a group, enabling them to get a fairer price than if they traded as individual farmers. Initially, Abwoch says each farmer would sell a kilogram of maize at US$ 0.38, but now as a group, each kilogram sells for three times the price.

Production has expanded too, notes Jackson Lakor, Agricultural Officer for the cooperative’s district. “The production of rice is now at about 5,000 hectares and is expected to grow to between 10,000 and 15,000 hectares in the next two years. What is left is to strengthen marketing so that people are able to realise the benefits from the good linkages.”

As for Grace, she has found a new reason to work even harder since joining the Cooperative. “I feel energised to work more because I can save with fellow members and this money can help me start up a personal project that can improve my family’s life,” she says.