Policy Formulation in Support of Agricultural Marketing: Uganda s recent experience

1. CTA Conference 1 Policy Formulation in Support of Agricultural Marketing: Uganda’s recent experience by Dr Willie O. Odwongo and Martin Fowler

2. CTA Conference 2 Background As a result of macro-economic reforms in the last two decades, state intervention has been reduced in a number of areas: Abolition or curtailing the activities of parastatal marketing boards Relaxation of foreign exchange controls Anti export bias in taxation removed Reduction in the role of the public sector in the delivery of agricultural services - research, extension, credit, inputs, etc. Abolition of state-administered producer prices (pan-territorial and pan-seasonal)

3. 3 CTA Conference Characteristics of the (new?) liberalised markets Marketing systems continue generally to have little capacity to channel credit to farmers/traders or to spread risks Continued risk-averse behaviour by farmers and limited access to information on markets Limited market awareness/understanding by many Complex and diverse social barriers to entry Inefficient and ineffective public sector agricultural regulatory systems (for both inputs and outputs)

4. 4 CTA Conference Characteristics (cont’d) Problems remain in remote areas (and areas affected by conflict) where limited access to input/output markets mirrors poor access to other critical services Marketing continues to be ranked by farmers as one of the most important problems they face (second only to diseases) – national, sectoral and farm enterprise-specific studies are consistent on this Smallholder producers well integrated into the market – 76% crop farmers selling part of their produce; significant regional differences Producers now receiving higher proportion of export price (e.g. coffee farmers: >70% in past three years cf. 45% in early-1990s)

5. CTA Conference 5 Policy context Poverty Eradication Action Plan, PEAP (Uganda’s PRSP) is the overall policy framework guiding public action to reduce poverty (Target: from 38% in 2003 to < 28% by 2013/4; and a reduction in inequality) Ag. sector-related “pillar’ emphasises “enhanced production, competitiveness and incomes” Plan for the Modernisation of Agriculture (PMA) developed out of the PEAP; provides a framework for tackling poverty through agricultural transformation

6. CTA Conference 6 Plan for the Modernisation of Agriculture: priority areas 1. Research and Technology Development 2. Agricultural Advisory Services 3. Agricultural Education 4. Rural Financial Services 5. Agro-processing and Marketing 6. Sustainable Natural Resource Use & Mgmt 7. Physical Infrastructure

7. CTA Conference 7 Background information used in formulating the Marketing and Agro-Processing Strategy (MAPS) Various reviews/analyses of agricultural marketing undertaken by Ugandan and international researchers (NRI/IITA/FoodNet, FAO, USAID, EC, World Bank) Commodity-specific (bananas, maize, livestock, fish), issue-specific (infrastructure, regulatory environment) and input-specific (fertiliser): strengths and constraints Exhaustive consultation process (farmers, commodity traders/exporters, civil society, civil servants, academics, input suppliers, agro-processors & development partners)

8. CTA Conference 8 MAPS intervention areas Increased collective action by producers Improved infrastructure Enabling policies and legal/regulatory framework Increased access to marketing information

9. CTA Conference 9 (i) Collective action Promotion of farmers groups under advisory services programmes: National Agricultural Advisory Services Programme, National Farmers’ Federation, Co-ops Capacity building of membership to enable more-effective engagement in the liberalised market environment – both produce and inputs (in such areas as group dynamics, collective marketing, quality standards & negotiating skills) Educational programmes to engage farmers more effectively in the liberalised market environment Supporting collective action among traders exporting “non-traditional” agricultural commodities

10. CTA Conference 10 (ii) Improved infrastructure District and community access roads construction Rehabilitation of infrastructure at border posts and streamlining of Customs’ procedures Programme to promote energy for rural transformation Markets’ facilities upgrading/construction Stores’ rehabilitation and post-harvest research Promotion of agro-processing enterprises Creation of enabling environment for telecommunications companies

11. CTA Conference 11 (iii) Enabling policies and legal/regulatory framework Policies: (a) Medium-Term Competitiveness Strategy, (b) National Trade Policy, (c) Marketing and Agro-Processing Strategy Development of capacity in trade issues’ analysis and trade negotiations Rationalisation of institutional responsibilities for trade negotiations Legislation: amendments to contract law Drawing-up of produce standards (in collaboration with farmers/traders)

12. CTA Conference 12 (iii) Enabling policies and legal/regulatory framework (cont.) Enhance capacity of Ministry of Agriculture to carry out its regulatory functions Support to the Uganda Commodity Exchange and a Warehouse Receipts System (WR legislation) Review local government taxation practices currently acting as a disincentive to ag. marketing

13. CTA Conference 13 (iv) Increased access to marketing information Make information on market and quality requirements, volumes and prices (radio, SMS, newspapers) available to farmers, agro-processors and traders Provide training to farmers in the analysis and use of MIS

14. 14 CTA Conference Implementation of the Strategy Many public sector interventions in the areas highlighted here have already been underway for some time or are planned to be got underway shortly The private sector has also been active in a number of the areas highlighted in the MAPS Government is therefore being careful in identifying the gaps and in assessing its own ability to fill them The country’s development partners are providing significant support for the implementation of the Strategy

15. CTA Conference 15 Challenges Pressure from lobby groups continues to challenge the MAPS and those involved with its implementation: (i) strategic grain reserve (ii) cotton subsidy (iii) directive production Implementation of other PMA priority areas needs to be brought “up to speed” so as to support the MAPS, if the transformation of the agricultural sector is to be realised (e.g. rural financial services)

16. CTA Conference 16 THANK YOU FOR YOUR ATTENTION