Alternative Growth Strategies for Uganda Cotton and Coffee

1. Alternative Growth Strategies for Uganda Cotton and Coffee Sam Benin Rhona Walusimbi Liang You Simon Bolwig Jordan Chamberlain IFPRI

2. Background Purpose: • To support the IFPRI/USAID ongoing research program to identify and monitor sustainable rural livelihoods and land uses in Uganda Specific Objectives: • Review trends in - Production ,Consumption/Trade/Value Addition - Human Welfare, Ecosystem Welfare -Constraints, Opportunities and Development Initiatives • Asses welfare impacts of alternative growth strategies Methodology: • Literature review • Discussions with relevant institutions and stakeholders • Simulation of welfare impacts of alternative strategies using DREAM model

3. Cotton Production Trends • Cotton introduced in Uganda in 1903 • Peak production in 1970. Large negative growth rates in 1970s and early 80s, recovery thereafter Source: FAOSTAT (2002)

4. Cotton Export Trends • Large negative growth rates in 1970s and early 80s, recovery thereafter • Export value growth rates lagging behind below volume growth rates FAOSTAT DATA (2002)

5. Cotton Export trends cont’d Source: UBOS Statistical Abstracts

6. Farm-Level Cotton Profitability Trends Source: APSEC,

7. Farm- Level Cotton Profitability cont’d • Location and technology affects profits Source APSEC-various Source:NAADS,2003

8. Cotton’s Contribution to Household Incomes • In past and presently, cotton considered important for poverty alleviation in Uganda Trends • In the 1960’s cotton at least partially the source of income for over 60% of Uganda population (Serunjogi et al 2000). 700,000-800,000 farmers. • In 2000, contributed to incomes of approx. 10 % of Uganda population (COMPETE, 2002). 400,000 farmers. • In their analysis of cotton development domains in cotton growing areas (You and Chamberlin, 2002) report that cotton contributes modestly to total income modest (2%-13%) and its contribution to total value of production is 2%

9. Cotton Development Strategies Key Issues: • Current production below potential, • Good opportunities- favorable soils and climate, high grade cotton, good regional and international markets GOU Strategy: Strengthen Vertical Integration of the sector to serve domestic and international markets through increased profitable cotton production and development of apparel production (CARANA, 2000)

10. Cotton Development Strategies cont’d • Suggested actions by GOU, private sector include:

11. Coffee Export Trends • Coffee has been Uganda’s most important cash crop since the late 1960s. Peak exports in 1995/96 • Deep decline since 1995 due to collapse of world prices and associated decline in production. Has coincided with spread of coffee wilt disease • In 2002 coffees share to total exports at historical low – 20.7% (Source: UCDA)

12. Coffee’s contribution to Incomes • It contributes to incomes of approx 2 million people (500,000 households) CARANA, 2003 • Coffee central to poverty reduction in Uganda • It is grown by an equal share of poor and less- poor households (DAE, MUK)

13. Coffee Development Strategies • CARANA 2003 reports on coffee competitiveness Strategies agreed upon by GOU, industry and donors in 2002 . They focus on research, farm level production, processing and value addition, infrastructure, markets and regulation and policy

14. Coffee Development Strategies cont’d Action points under Production Strategies included: • Replacing wilt affected plants with resistant genotypes • Improving coffee plant multiplication • Expanding Arabica area planted • Supporting development of shade grown coffee • Strengthening farmer associations Action points under Processing and Value Addition Strategies included: • Assisting firms in exploiting value added processing opportunities • Supporting expansion of centralized wet milling facilities • Monitoring and reducing Mycotoxin levels • Increasing availability of credit to small and micro enterprises