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UGANDA IDEA
Building Foundations for Agribusiness
FINAL REPORT
2004
“With regard to agriculture, we are waging a modernization crusade
through the availability of improved seeds and other farm inputs,
as well as demand-driven extension service delivery systems.”
-Yoweri Kaguta Museveni, President of the Republic of Uganda, April 1 – 3, 2004
Uganda IDEA Final Report
A USAID-funded project
Contract #623-0125-C-00-5040-00
Submitted by Chemonics International Inc.
June 2004
UGANDA IDEA
Final Report 2004
Table of Contents
About this Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
The IDEA Approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
Chapter I: Project Overview . . . . . . . . . . . . . . . . . . . . . . . . .9
Chapter II: Low Value Crop Export Development . . . . . . .37
Chapter III: High Value Crop Export Development . . . . .65
Index of CD-ROM Annex Material . . . . . . . . . . . . . . . . . .98
A boy takes an afternoon walk through an upland rice field in
Uganda's Bugiri district.
2 chapterone
About This Report
"If you could point to one thing, what would you consider the
project's secret of success?" We asked that question often in
preparing this report. Frequently, the answers were prefaced by a
combination of relief at the chance at last to answer that ques-
tion, and anxiety at the difficulty of summing up nearly 10 years
of work in a neat phrase. But in each instance, we received a
thoughtful, candid response.
"No one ever asks us That's what we hope to provide with this final report: honest
how or why. We talk
responses, critical analyses, detailed summaries of responsibilities
about it among the
team but no one fulfilled and unfulfilled, sketches of real people and personalities,
ever hears or writes
suggestions for the future of the NTAE sector in Uganda, and a
about it."
chronicle of lessons learned and best practices. The report offers
-Mark Wood, guidance for future programming in the next generation of agri-
IDEA project
low value
cultural and enterprise ventures in Uganda or anywhere in the
crop advisor world. This report also addresses the concerns of the donor
community, responds to the needs expressed by the private sec-
tor, and submits to the GOU the experiences of USAID's
Investment in Developing Export Agriculture project. Finally,
this report is IDEA's chance to literally stop to smell the roses
after years of cultivation.
about this report 3
This woman bags rice seed for FICA, a successful indigenous inputs
dealer in Kampala. With IDEA assistance since 2001, FICA
surpassed five-year business targets in less than two years.
4 idea approach
The IDEA Approach
“IDEA made NAADS In a phrase, the integrated commodity system approach is the
rethink its enterprise
secret to the IDEA project's success in commercializing non-tra-
approach in that it
should be demand ditional agricultural exports in Uganda. Agribusiness studies in
driven. Also, there are
Africa show that impacts are greatest when focusing on high-
many lessons and
experiences learned as
potential, medium-sized firms that feature upward linkages to
a result of the market larger firms, trickling downstream to smaller firms and producer
linkages made, partic-
ularly in the grain sec-
organizations, yielding multiplier effects. Specifically, IDEA put
tor. These linkages in place a system in which farmers adopt improved technologies
have resulted in a sig-
when production costs are reduced and profits realized; input
nificant improvement
in the quality of maize suppliers can deliver products and information on a profitable
now being supplied by
basis; and production economies of scale can be achieved to
farmers to the market.
NAADS will continue
meet domestic, regional, and international demand. Throughout
to build on this work, the approach, attention must be focused and refocused on the
especially in working
with input suppliers
market chain to provide technical assistance at particular areas of
like FICA and other constraint with regard to producers, traders, and exporters.
private companies
where possible.”
What does this mean to the average producer, medium-sized
-Dr. Joseph Oriokot,
business or large exporter? The voices of those who participated
National Agricultural
Advisory Service
in the IDEA project offer a verbal picture:
"You know what was typical of Uganda maize then? Shriveled, dis-
eased, fermented and spoiled. Train cars full of, rotting maize."
Priority Commodities
Crops identified at the initial stage for targeting were field crops (maize
and beans), flowers (roses), vegetables (mushrooms, asparagus), fruit
(papain and passion fruit), spices (vanilla, chili) and essential oils (cit-
ronella, geranium). Targeted crops were later narrowed down to maize
and beans as the key field crops, flowers, selected fruits and vegeta-
bles, vanilla, cocoa, and papain.
idea approach 5
"I remember walking the tarmac at Entebbe, just even in the late
90s, and seeing the damned things just sitting there in the sun,
wilting to nothing."
"It's a business of showing and telling. The major problem was that
government was leading everything. The government would give
cheap prices to the population, impure seed, and when the private
sector came and offered better seed with a higher price, the
farmer looks at you funny. He won't invest. But, if you plant
next to the same farmer, and he sees it mature so much faster,
with all the fruit, then the farmer will say, 'What is this?' You
change attitudes quickly."
"The farmer is at the mercy of the market. The banks are at the
mercy of the market. We try to forecast the market, but some are
local and you cannot predict factors such as weather, hunger or
drought, or how neighboring countries affect us."
"He started with around 5 acres and then he went crazy, shoot-
ing up to 50 acres. He over-expanded and did not account for
storage. So, he got excited and had to store maize all over the
house, in the sitting room, in the bedroom, on the veranda. It was
very unsightly. Maize chased him out of the house. But it is a
lucky problem to have."
6 idea approach
map of Uganda 7
A man prepares to wade into a pile of maize seed with a large buck-
et. UGTL exports Ugandan grain to most neighboring countries from
its 100,000 square foot warehouse.
CHAPTERONE
Project Overview
"Most farmers today In 1994, world coffee prices spiraled downward and world cotton prices were at
are still not market-ori- their lowest since 1987. Uganda, a country where the economy and roughly one-
ented. They simply quarter of the population depend on coffee and cotton earnings, suffered great-
produce a commodity ly. The need to expand government revenues was critical—the whole economy
crop each year with was at risk. At that time the government of Uganda was in the final stages of lib-
the hope that they can eralizing the agricultural sector and privatizing state-owned enterprises.
sell it for the best Concurrently, USAID was supporting small, promising efforts in NTAE post-
price possible, while harvest handling, policy reforms, education, and export promotion. With two
having enough to agricultural seasons for many crops, Uganda has both competitive and compar-
feed their families as ative advantages: farmers, input suppliers, traders, and exporters can plan strate-
well. Yet the IDEA pro- gies for periods of six-months instead of one year. The time was right for a new
ject has succeeded in effort aimed at building on those advantages and expanding exports. It was in
changing the percep- this environment that IDEA was designed.
tions of thousands of
farmers in favor of a IDEA began on February 24, 1995, and ended June 23, 2004. It was initiated as
more market-oriented one of the key field operations that would contribute to the achievement of
outlook. Being able to USAID Strategic Objective 1 (SO7), under which the project was implemented,
address the needs of namely, "increased income for rural men and women." When the project was
the exporter as well as extended in February 2000, it aimed to increase the value and volume of select-
the producer, being ed NTAEs as a source for increased rural incomes under SO7. Although the pro-
able to help members ject agreement was between USAID and the Ministry of Tourism, Trade and
of a commodity indus- Industry (MTTI), IDEA operated principally with the NTAE private sector.
try face the interna- IDEA's Agribusiness Development Centre (ADC) in Kampala was the project's
tional market collabo- nerve center, holding much of the intellectual capital and strategy for project
ratively in order to implementation. The team's strategy focused on direct assistance to producers,
negotiate prices, air-
freight rates, and input
The Project by the Numbers
costs from a stronger
position, has been Budget: $30,058,284
essential to the out-
Period: 9 years, 4 months
standing achievements
of this project." Funds for local grants and subcontracts: Phase I: $1,215,979 disbursed
of $2,224,700 awarded; Phase II: $1,536,644 disbursed of $1,600,000
-External evaluation
Targeted commodity exports: $20.9 million in 1994; $98.5 million in
of IDEA, USAID,
2003, a 21 percent increase
March 2003
Targeted commodity export values were 44 percent over end of
project targets
More than 2,500 export deals facilitated
chapterone 9
Maize cribs and shellers are some of the post-production innovations introduced to low-
value producers through IDEA.
"The cluster approach traders, and exporters, using a vertical- them; still other occasions called for
has to be part of the ly integrated commodity systems hard-nosed business requirements or a
design of new donor approach. Work was divided across combination of all three tactics. In the
funded projects. If low value and high value commodity end and along the way, the project was
there are weak links production and marketing activities. an agent of change, a rallying force for
anywhere along the Throughout the life of the project, the private sector, and a model for
chain—for example, USAID staff provided critical support others as described in The Big Idea on
if you get a lack of and guidance. More importantly, page 11, and throughout the report.
access to inputs, USAID allowed the project the flexibil-
no cold storage facili- ity to take on new challenges and aban- An agent of change. IDEA helped change
ties, or unreliable air- don efforts that did not work. USAID attitudes about the viability of agricul-
freight—all of the busi- trusted in the integrated commodity ture, agribusiness, and exports. The
nesses cannot func- systems approach, watching as the pro- Ugandan government and donors
tion properly." ject benefited peasant farmers, farm wanted a market-led economy. But it is
laborers, factory workers, processors, impossible to create one on the backs of
-Steve Humphreys, traders, exporters, transporters, input subsistence farmers. Therefore, produc-
High value suppliers, bankers, and government. ers commercialized to grow the market
crop advisor and created reliable, high-quality pro-
There is no doubt that IDEA was a suc- duction for that market. Changing pro-
cessful project. In fact, the project pro- ducer mindsets, habits, and business
vided services beyond its clients' needs; practices was critical. In fact, changing
their successes and failings have been business practices was necessary all
instructive to businesses, banks, and along the commodity market chains, not
donors working in the entire agricultural just with farmers. Over time, Ugandans
sector. IDEA floated ideas, served as a began to view farming as a business; saw
broker and catalyst, and applied the export potential for commodities
resources at critical junctures along mar- other than coffee, tea, tobacco, and cot-
ket chains. At times the project nurtured ton; and looked upon agribusiness as
clients; other times it took risks with a viable sector for investment. The
(continued on page 12)
10 chapterone
The Big IDEA
It was "obvious that export-led growth is about the only solution for
achieving growth in Uganda. … IDEA was an excellent model and
approach for catalyzing export-led growth. No other donor was doing
it. I believe we catalyzed the process, and institutionalized a new way
of thinking in the private sector, and also within the government.
Leadership and partnership between USAID and the IDEA team, and
with the Ugandan clients really increased over time. Pushing and pro-
tecting the technical advisers was important. … A key component was
the ability to do feasibility studies up front including market research in
Europe and the U.S. to make sure the market demand was there and to
match that with the potential for Ugandans to supply that market. Then
it was just a matter of tackling the various pieces in the supply chain.
... Not a big weakness as it turned out, but finance is important and we
could have probably expanded the pie. A little more focus on contract
farming and some other approaches that link larger companies with
smaller firms and farmer organizations would have been good as well."
-Ron Stryker, former chief, Economic Growth Office, USAID/Uganda,
1998 to 2002
"Traditional exports were in trouble and others were working on this,
especially the government. USAID decided to help diversify to increase
foreign exchange. IDEA had an outstanding team. You can redesign,
tinker around the edges with the right people. At that time it was very
unusual to have a project of more than five years but we asked for
approval for 10. The first phase got us a good foundation and the sec-
ond five years brought even greater benefits."
-Jim Dunn, former agricultural officer, USAID/Uganda, 1992 to 1997
"It's an exemplary project. I've seen the successes myself. I am Ugandan
and I never imagined flowers could be exported from Uganda. I went
down to Entebbe to the cold storage that USAID built and it was over-
flowing with flowers. When I see codes of practice developed by the
private sector, being self-enforced by the private sector … something
great is happening. If you go to Mukono there are new buildings and
roads. What's happening in Mukono? It's vanilla. The maize market is
another example. You open their eyes to see there is a market."
-Gaudensia Kenyengi, IDEA Cognizant technical officer, USAID/Uganda
chapterone 11
"Producers need the (continued from page 10)
assurance that the reason: IDEA clients, from small- spreading the word, changing the way
adoption of such tech- holders to exporters, made money. they do business and fostering the
nology will be sustain- approach of others.
able to enhance pro- To see the results, look to the young
duction. At the same but established core market struc- Key Cross-Cutting Efforts
time, the producers ture—previously ad-hoc—complete A number of IDEA efforts support-
expect a reliable mar- with basic supplier and buyer knowledge. ed both the low- and high-value com-
ket and a price which A subsistence farmer with surplus, for ponents. They are described below.
must at least offset the example, can now make an informed
cost of production. sale of her products to the market. An emphasis on technology transfer.
Adoptions will only IDEA's mandate at project inception
take place with A rallying force for the private and public sec- was marketing. However, it soon
market confidence and tors. The project played a catalytic role, became clear to the team that agricul-
suitable input fostering partnerships between the pub- tural export issues were very much
supply strategies." lic and private sectors to facilitate the tied up in the fact that Uganda was an
growth of NTAEs. Project-supported unreliable supplier of poor quality
-Mark Wood, linkages helped grow commercial agri- products. So the IDEA team worked
LV advisor culture generally, leading to investment to transfer technologies and give low-
in the entire agricultural sector. The for- value smallholders the confidence to
mula called for a focus on the private take risks. We emphasized technolo-
sector while it promoted appropriate gies to improve yields, restore soil fer-
partnerships with the government. tility, and mitigate environmental
Project accomplishments and the repu- impacts. On the high-value side, tech-
tation of the ADC were the driving nology transfer involved one-to-one
forces in renewing faith in the agricul- assistance to flower growers. IDEA
ture sector. split the costs, using its grant funding
to the Africa Project Development
A model for others. IDEA took an inte- Facility (APDF) to bring in experi-
grated commodity systems approach enced resident farm managers, who
across all exports. At the same time, were placed at 12 flower farms.
the project applied a four-pronged Technical advice was given to fruit
emphasis on technology transfer, and vegetable growers in small
input supply, output marketing, and groups. A different approach for
access to finance to improve produc- vanilla provided a series of grants to
tion efficiencies. Others have emulat- the umbrella association covering the
ed this approach to increase NTAEs costs for short-term vanilla consul-
with a host of different commodities. tants and trainers to develop a private
USAID embraced the approach and extension service. IDEA set up pro-
built the APEP, SCOPE and PRIME grams similar to the vanilla strategy
projects around it. The watermark of for banana and cocoa. Overall, tech-
IDEA's implementation also can be nology transfer was the point of the
seen in DANIDA's approach to their spear; appropriate programs and
own agribusiness support work. Even delivery systems designed for specific
more gratifying is that clients are audiences were developed to follow.
12 chapterone
Targeted NTAEs from Uganda, 1995-2003
120
Low Value 34.76
100
High Value
US Million Dollar
80
16.18
40 18.56
21.04 63.77
16.40 20.62
16.05
40.68
20
12.41 30.06
11.40 24.61
20.64 22.30
17.21
9.51 11.59
0
1995 1996 1997 1998 1999 2000 2001 2002 2003
Source: ADC/IDEA Project
*Technology transfer with maize producers was sequenced beginning with no cost technologies. Demonstration trials showed both low and high input technolo-
gies and results in the same field. Farmers could take on the methods possible based on their own resources. The high input demonstration was an attraction
to farmers but adoptions were based on real resources. High input adoptions followed the success of their initial trials with low input technologies.
chapterone 13
"The stockist system Targeting the inputs sector. Production allowing distributors to develop a
organized the inputs and post-harvest technologies rural stockists network, as well as
and lowered the demonstrated by IDEA led to higher extensive technical and management
prices with increased demand for inputs, including training for stockists. It also encour-
demand from improved seed, fertilizers, crop pro- aged business linkages between dis-
the associations." tection chemicals, cribs, shellers, and tributors and stockists, and stimulated
dryers. The project then had to find inputs demand through farmer train-
-Abraham Batamboozi, ways to strengthen private sector ing. Second, IDEA supported a young
Bugiri district input supply to respond to producer private-sector seed industry that pro-
site coordinator demands. IDEA's objective was to duced for both local and regional
have inputs accessible to both subsis- markets for the first time in 1997 and
tence and commercial farmers and 2003, respectively. Third, IDEA con-
make sure they were supplied in a tinued to advocate for a private-sec-
timely manner and at reasonable tor-led input supply system in
costs. The project took a three- Uganda, working to resolve regulatory
pronged approach. issues related to the seed industry and
crop chemicals.
First, IDEA built and then expanded
the Agribusiness Training and Input In 1996, the temporary break down of
Network (ATAIN). ATAIN respond- the government-run Uganda Seed
ed to the growing village-level Project (USP), which had a monopoly
demand for inputs while helping over- on both the production and distribu-
come some of the deficiencies of the tion of all seed in Uganda, left a void
input supply chain. This effort pro- in the input supply industry and a
duced a credit guarantee program shortage of seed nationwide. This
Attaining ATAIN
Low value crop demonstration trials convinced project-targeted farmers
as early as 1995 that new technologies offered increased yields. When
those new technologies included fertilizer and seeds, there was a prob-
lem. The right items were stocked on the shelves in Kampala, not in the
local village shop. The stockist in the village, who sold such items as
soap and aspirin, didn't have the needed fertilizer or seed. How could
IDEA get the products out there? The answer came in 1996 when the
low value team leader visited a CARE program in Zimbabwe that did
just that. He came back to Uganda with the program concept and soon
after ATAIN was launched.
The ATAIN program aims to get the products to the villages without
asking stockists to take inordinate risk. At the beginning of the project,
there were three wholesale distributors and essentially no rural stock-
ists. By the end of the project, there were 7 wholesale distributors, 208
rural retail stockists, and more than 400 employees.
14 chapterone
A worker carries bags of maize seed to a customer. The inputs supply business has
exploded into a full-scale private operation in Uganda with IDEA's help.
seriously impacted production capaci- efficiently provided grants, cost-shar-
ty because farmers did not have access ing agreements, and subcontracts to
to registered seed. The establishment clients for activities that produced
of a viable, private-sector input supply results. The total amount earmarked
system thus became the focus of for grants under Phase I was
much of IDEA's low-value efforts $3,313,650. The total amount awarded
under Phase II. As part of this larger was $2,224,700 and the total amount
project effort, IDEA awarded grants disbursed was $1,215,979. Altogether,
to Farm Inputs Care Centre (FICA), 38 grants and/or subgrants were
Nalweyo Seed Company (NASECO), awarded. On the other hand, during
and Harvest Farm Seeds to purchase Phase I of the project, IDEA techni-
seed processing equipment and, in the cal assistants supervised the technical
case of NASECO, land preparation aspects of the grant program while
equipment and seed processing equip- USAID managed the finances.
ment. The inputs sector has since
grown substantially. For example: This contributed to a disconnect
Monsanto entered into two contracts between technical and financial
with FICA to be the sole agent of oversight, making grant management
Roundup Max in Uganda, and to pro- difficult. Phase II incorporated
duce Monsanto hybrid maize seed for both activities under the institutional
export to Kenya and Tanzania. contract, bolstering the program
with a more comprehensive manage-
A flexible, results-oriented project fund. ment structure.
Despite the difficulty of subcontract-
ing and grant making in the Ugandan During Phase II, the funds had built-
environment, IDEA effectively and in capability and flexibility to react to
chapterone 15
Children leave an Anglican church in Kampala on Easter Sunday.
changing conditions. The IDEA small program, IDEA entered into 22
grants program complemented both grants/fixed amount reimbursement
the high- and low-value components agreements (FARAs) and disbursed
by providing industry-level support $1,536,644 of the $1.6 million pro-
for research and development, train- grammed for grant activities. A
ing and extension, management sup- total of nine FARAs were made
port and technical capacity develop- to NARO to fund pest/disease
ment across the entire spectrum of resistance research, fertilizer and irri-
NTAE commodities. Rather than gation research, varietal develop-
providing support directly to individ- ment/multiplication, demonstration
ual companies, IDEA targeted gov- plot/mother garden establishment
ernment research organizations, and extension/training activities in
industry associations and private sec- maize, beans, sesame, banana and pas-
tor companies that proposed activities sion fruit. IDEA used funds for a
to impact across a specific industry. variety of grants: to provide a sub-
Over the life of the small grants contract to an inventory control firm
(continued on page 18)
The Plan for Modernization of Agriculture (PMA) and IDEA
Agricultural sector activities are driven by the PMA, the government's
blueprint for the sector whose vision is "poverty eradication through a
profitable, competitive, sustainable, and dynamic agricultural and
agro-industrial sector." IDEA staff were directly involved in development
of the PMA and many of its concepts and operational mandates mirror
IDEA's commercial agriculture approaches, including appropriate roles
for government and the private sector. IDEA's chief of party served on
the PMA planning committee, providing major input along with the
project's low and high value team leaders.
16 chapterone
IDEA Small Grants Program Breakdown
Phase I
Original funds: $2,224,700
Disbursed funds: $1,215,979
Period of disbursement: February 1995 - February 2000
Phase II
Original funds: $1,600,000
Disbursed funds: $1,536,644
Period of disbursement: March 1, 2000 - December 31, 2003
Private sector clients and results:
- Africa Project Development Facility (management support): supported 19 NTAE clients;
management support in young industries such as floriculture, fresh produce, seed/input
supply, freight handling/cold storage and regional grain trading
- Harvest Farm Seeds Ltd., FICA and NASECO Ltd. (seed companies): slump in seed sales
continued for the second half of 2001 and all of 2002, preventing achievement of most
benchmarks; seed sales recovered during the 2003A season; the companies were forced
to look to alternative markets to survive, strengthening the industry in the end
- UFEA (two grants) (flowers association): 42 varieties planted, 6 high-performing varieties
identified, and 16.95 ha of identified varieties planted; 9 open days held with an average
of 17 participants; research conducted at 9 farms, soil analysis sent to Dutch labs; 8
farms participate in post-harvest temperature study, manual created; helped secure
funding for director and new research facility
- UNVA (vanilla association): 855 trainings conducted; 24,352 farmers trained; 4 packages
incorporated into training program; 2 curing facilities established
- Uganda Cocoa Association (cocoa association) 238 trainings conducted; 9,296 farmers
trained; 1,127 individual farmers, 7 exporters, and 17 local associations have paid mem-
berships; helped secure funding from Irish Aid to continue extension, training and code of
practice work; yield per hectare has increased to 450 kilos based on data compiled by the
Cocoa Development Project
- Melissa Flowers Ltd. (gerbera): 30 varieties planted, 25 move on; 1.25 ha of gerbera
planted commercially, sales to exceed $500,000; 1 open day
- Mairye Estates Ltd. (vegetable trials): 76 vegetables trialed; 25 move on; data from the
trials allows two flower farms to begin high value vegetable production; most trial
shipments not sold
- FHL (cold store): 6 complaints from importers during 4/01-3/02; arrival temperatures on
direct flights averaged 8-12 degrees C; averages in line with regional competitors (Kenya,
Zimbabwe, and Zambia)
- Outspan Enterprises Ltd. (organic sesame): 450 mt exported in 2001; 318 mt exported in
2002; 6,000 farmers certified from base of 2,096 as of 12/31/02
- Roka Ale Trading Company Ltd. (conventional sesame): tests show 89 percent germina-
tion rate; partners well with demonstration plots; program terminated 8/03 after Roka Ale
unable to procure remaining 44 mt from contract farmers
chapterone 17
(continued from page 16)
that monitored commodity stocks at and fielded requests from four seed
an enterprise that received a loan; a companies vying for rights to new
cost-share agreement to a commodity varieties. Unfortunately, NARO's tar-
association working to employ its own geted research in high-value commodi-
extension staff for conducting field ties was less successful, particularly for
demonstrations; and a service agree- horticulture, cocoa, and banana, due to
ment with NARO for contracted tech- internal capacity problems.
nology generation and dissemination.
Subcontracts were competed often, fur- Building commercial agriculture for
ther encouraging enterprises to operate Northern Uganda. USAID requested
in a business-oriented manner. that IDEA provide assistance in
Northern Uganda, an area of long-
Fostering an appropriate role for government. standing conflict with higher levels of
IDEA facilitated public-private part- poverty and internally displaced pop-
nerships. For example, it brought ulations than in the South. USAID
together private radio stations and the requested that IDEA provide assis-
MTTI's Market News Service to tance in the region. Operations in
broadcast agricultural programs and Northern Uganda required special
price information. The project also considerations, but IDEA came
helped define relevant GOU agency through in the design and implemen-
roles and activities. Grants to NARO tation. The project worked with
to conduct research relevant to com- proven business-driven models in
mercial agriculture provide an illustra- conjunction with clients and NGOs,
tion. NARO's National Maize as they expanded operations north-
Programme produced and released ward. Highlighted in orange, on page
new varieties of maize and beans, 19, are long-term Lord's Resistance
including the introduction of locally- Army (LRA) incursion areas; the yel-
bred maize hybrids. Through this pro- low shows 2003 incursions into Teso.
cess, NARO-previously an insular The map illustrates IDEA's sesame,
research organization-was exposed to rice, oilseeds, and cotton activities in
significant interaction with the private Northern Uganda. In the case of
sector, had an opportunity through sesame, for example, IDEA worked
IDEA to get products into the field, in West Nile and Apac with two
The Human Factor
Best practices in NTAE promotion revolve around the ability to blend
human, physical, technical, and financial resources. Of these, the
human factor appeared to be the key determinant. Consistently across
all of the IDEA successes over the years was a need to adopt a positive
attitude, stay committed, and be willing to change methods of opera-
tion mid-stream. Interpersonal relationships and management capability
were crucial elements at work under IDEA.
18 chapterone
chapterone 19
"Even though we have exporters, Roka Ale and Outspan, on Hire the right people. IDEA's internation-
made many mistakes, multiplication and distribution of an al staff members were raised on farms
it is encouraging that improved sesame variety. At the from Australia to Zimbabwe. Many
the IDEA project is extension level, the project worked to worked in agricultural sales early in
regarded as a success improve production efficiencies. The their careers, selling commodities and
by most of our clients idea is that as the word spreads, inputs from pigs to pesticides. The
in the private sector. If sesame production will filter into team adopted a results-oriented
you ask them why, intermittently insecure areas by approach from the start, long before it
they never refer default; and as the transition takes was in vogue with USAID and other
to grants or work- hold across the North, supported by a donors. Clive Drew, the IDEA chief of
shops. They usually targeted market pull for the product, party, notes that he gave guidance to
say something like, it is likely that sesame production and the low- and high-value team leaders
'You have helped us marketing will begin to emerge as a but did not micromanage their activi-
with our business,' or, significant economic driver. Should ties. This created healthy, internal com-
'You have great practi- conditions become secure, active mar- petition between the components.
cal information,' or, ket and extension support can be Personalities also made a difference, as
'You have really sup- mobilized immediately into the new the local professional staff comple-
ported the industry.' I area through the two firms. mented the international staff. The
think what they mean local team comprised master's-level
is that we had staff The Lessons Learned graduates in the fields of agriculture,
who identified with At the end of nearly 10 years, IDEA agricultural economics, and food sci-
them and brought project staff, USAID, stakeholders, ence. Prior to joining IDEA, members
practical skills. and clients have looked back of the crew had compiled 5 to 10 years
Undoubtedly the tech- to identify the lessons learned. each of private and public sector expe-
nical knowledge and Although their perspectives and rience. A number held managerial posi-
commercial back- experiences differ, they articulated tions while others were active in field-
grounds of the whole one common theme: the importance based agricultural development activi-
IDEA team has been of building relationships. ties. Collectively, they brought a deep
the single most impor-
tant reason for
our success." Commodity Chain Support and Household Incomes
-Steve New, Although the IDEA project had a mandate to increase and measure
HV advisor NTAE volumes and value, it was clear from work with smallholders in a
variety of commodities—from sesame to vanilla—that integrated com-
modity chain support efforts increased household incomes. Employment
has no doubt led to increases in household incomes and effective
impact was felt all along the market chain.
The IDEA approach is emulated by the new APEP project and is being
applied to selected, high potential food and cash crops with a dual
focus on commercial agriculture and food security. APEP's overall man-
date is to increase rural household incomes and will track those income
changes. The successes and failures experienced by IDEA contributed
significantly to APEP's design.
20 chapterone
Workers at a flower farm in Entebbe congregate around a soil and peat cleansing
bed. Uganda's flower industry employs close to 8,000 people. In 1995, there was no
flower industry.
understanding of the agricultural sec- IDEA's approach consisted of con-
tor as well as positive attitudes and a centrating on improving crop yield
willingness to learn. To say that there through new varieties and improved
was good chemistry among the entire inputs, expanding existing operations,
team would be to state the obvious: diversifying the product base, further
anyone visiting the ADC could see it. commercializing several well-estab-
The team found motivation and lished NTAEs, and searching for new
momentum in early project successes markets. USAID and other donors
and positive feedback from USAID began to emulate the IDEA approach.
and clients. Continuity was also a fac- For example, for the 2000-01 growing
tor. The international staff stayed season, at the request of one of the
through their contracts. During the life major ginners, USAID asked the pro-
of IDEA, the project lost only three ject to work with the Cotton
local professionals—one of which, Development Organisation (CDO)
Alphine, passed away. Another left to and the Uganda Ginners and Cotton
pursue his Ph.D. Exporters Association (UGCEA) to
design and implement technical pro-
Take an integrated commodity chain support grams for cotton producer organiza-
approach. IDEA's successes came from tions. IDEA's field demonstration
intervening along a commodity mar- approach was used to deliver new
ket chain. From the smallholders to income-enhancing technologies to
the exporters and all along the way smallholders. The approach increased
with researchers, bankers, input sup- yields nearly threefold. These yield
pliers, and transporters, the project increases were key to changing attitudes
focused attention on specific sections in the industry: farmers could clearly see
of that chain, such as building busi- affordable ways of moving from net
ness linkages between these groups. negative to net positive margins.
chapterone 21
"We could tackle all Put equal focus on supply and demand. vive. Others on the brink just needed
the different bits at Although the project initially focused cultivation. However, picking champi-
once, from the on marketing, it soon became clear ons is not all instinct. Experience led
research to the market that while markets existed, production IDEA staff to pursue detailed, mar-
at the other end. We quality and quantity did not. ket-driven feasibility studies before
had the flexibility to Consistency in volume and quality applying resources to any new com-
work with all the dif- was needed. So the project quickly modity. Even before undertaking the
ferent links in the shifted its focus to create production studies, the chief of party and high-
chain. So, if some- efficiencies through technology trans- or low-value team leader had to agree
thing was causing a fer and input supply access, cold chain that there were markets for the prod-
logjam, we could tack- management, codes of practice, as uct. They studied the basic, positive
le it, impact the next well as output marketing. These three signals on the feasibility of commod-
stage, and keep the thrusts provided the most critical ele- ity support and potential for success.
whole thing moving." ments of value addition for project- Bad selections decreased over time as
assisted commodity development. the team's knowledge of the agricul-
-Frank O'Brien, And by working closely with produc- tural sector and players expanded.
LV advisor ers, whether grain smallholders or The project's long life allowed for the
fruit and vegetable farmers, IDEA accumulation of a body of experience
showed them that improving produc- and knowledge, which became the
tion brought immediate rewards. team's greatest asset.
Pick champions. IDEA had to ferret out Let go of non-performers. The flip side
the champions in each NTAE sector. of working with champions is to
First, they chose the commodity; then shed the non-performers. Five com-
staff would identify spots in the mar- modities were let go in all; in other
ket chain where interventions had the words, assistance was begun and then
most potential for impact. IDEA stopped. In order to apply resources
assessed the businesses with this to more serious enterprises and
information and chose the potential smallholders IDEA also shed busi-
champions. The point was to select ness and association clients that were
bankable clients and deals. Poor not technically oriented and busi-
assessments sometimes led to poor ness-focused. For example, IDEA
selections of players with weak capac- ended support to a number of fruit
ity, and those businesses did not sur- and vegetable export businesses
Time Favors the Smallholder
IDEA's nearly 10-year time horizon worked in favor of efforts in the
beginning of the chain with smallholders. IDEA took a great risk and
worked directly with thousands of farmers. As these subsistence small-
holders became commercial smallholders through IDEA assistance, the
project staff encouraged them to form informal groups based on common-
alities and business interests. Many are now registered agribusinesses and
other donors are beginning to work with them.
22 chapterone
Nearly $26 million in roses and plant cuttings were exported from Uganda in 2003, from
next to nothing in 1995.
"The main thing is to because the sector did not attract - Beans: viable varieties of interest
find the good bankable heavyweight local or foreign investors, to local market only
deals. It takes a cer- and the businesses lacked the requisite
tain amount of guts to technical and business focus. What Look for both traditional and innovative
pick the winners. And commodities were cast off and why? financing mechanisms. The Ugandan
we had a fully sup- Here are a few examples: NTAE sector lacks equity and collat-
portive mission, too, eral. For many IDEA clients, land was
that gave us the - Bird's eye chili: laborious crop, the sole asset, and banks were gener-
flexibility. Also, you Ugandans not interested in picking ally cautious with NTAE efforts, as
have to get to know with all agricultural ventures. Despite
the players, the per- - Essential oils: the wrong climate this, IDEA has worked closely with a
sonalities of who you conditions number of financial institutions and
are dealing with." helped to build relationships between
- Mushrooms: no market the banks and IDEA clients. A major
-Clive Drew, focus was to change the negative atti-
IDEA COP - Honey: market exists but no con- tude of financial institutions towards
sistent, quality supply the NTAE sector while also training
The Beginnings of Upland Rice in Uganda
Smallholders cultivating in swamps have dominated rice production.
This has undermined wetland conservation and become a major
environmental concern over the years. WARDA, the West African Rice
Development Authority in Boauke, Cote d'Ivoire, developed and intro-
duced a new conventional rice variety for Africa in 2001 called NERICA.
IDEA's low value team leader visited WARDA to obtain breeder seed
for Uganda. And then the work began. IDEA supported upland rice
production in early 2002 in four Eastern districts and expanded by
the end of the year to four Western districts. Yield increases were
phenomenal—from one ton per hectare using local varieties to five tons
per hectare using NERICA. And an added bonus: wetlands were saved.
chapterone 23
"Training aspects are clients on business and financial man- IDEA focus harder on its work with
the main issue with agement to increase their attractiveness the businesses in the commodity mar-
the association now. to banks. Strong and strict financial ket chains, rather than simply lend
Maybe the biggest management of the client's personal major support to associations.
thing IDEA has done and borrowed funds, accompanied
for UFEA in the last by the ability to manage financial Another layer was necessary. Post-harvest
three years has been resources effectively, was critical. losses and the effects of climatic con-
to help with training ditions are precipitous when left in
indigenous supervi- Be responsive to new opportunities. IDEA the hands of smallholders. Near the
sors and management staff had a keen ability to respond to end of the project, IDEA began to
level staff. When you new opportunities as they arose. Its see that there were missing links in
make sure that intimate knowledge of Ugandan agri- commodity chains related to taking
staff underneath are culture and extensive networks in the harvested products from the farm
efficient, that they country helped staff sniff out oppor- quickly. In addition, farmers are not
know the compliance tunities and readied them to assist in qualified to undertake post-harvest
standards and strengthening new commodity respon- transformation of maize, cocoa, fruit
technology, then we sibilities. Upland rice, as a latecomer to and vegetables, and vanilla.
know our agricultural IDEA, is a prime example. Intermediary organizations such as
practices are the transporters, processors, regional
best coming in." Be prepared for the challenges of working traders, and producer organizations
with associations. For each commodity can play key roles in these areas, as
-Keith Henderson, UFEA IDEA supported, an apex export well as assist in bulk marketing and
executive director business association existed. Early on sales. IDEA did not focus on this
in the project, SWOT (strengths, intermediary layer immediately adja-
weaknesses, opportunities, and cent to farmers. This shortfall pre-
threats) analyses showed that all asso- sents a critical opportunity for pro-
ciations were weak: no paid member- ducer organizations, agribusiness buy-
ships, little leadership change, no per- ers, and donors to help develop these
manent staff, often no office and no intermediary roles and services.
finances. In response to the SWOTs,
all received tailored support and all Leverage resources and activities. No one
eventually held general elections for project or intervention has the
leadership–a positive step. But there resources to do everything. The
were many disappointments. What ability of IDEA to complement its
became clear to IDEA is that for an efforts and resources with govern-
export commodity association to sur- ment programs, NGOs, and other
vive in Uganda, the association had to donors helped it achieve its objec-
provide valuable member services, tives satisfactorily and often ahead
have active members, and have a com- of schedule. IDEA was able to
modity with significant export value. Of bring its comparative advantage in
all of the associations, UFEA most clear- hands-on business development
ly had these features and is somewhat of and effectively collaborate with the
a success, although a donor currently PMA secretariat, NAADS, other
funds the costs of its executive director. USAID projects, other donors and,
last but not least, clients. Some
IDEA also observed that strong busi- team members even refer to the
nesses build strong associations: their project in customer-service terms,
positive growth is dependent upon saying, "The client is king."
natural, mutual needs among the
members to come together to Ensure results orientation. A simple and
increase strength. This insight made flexible monitoring and evaluation
24 chapterone
Much of Uganda's rural poor are unorganized small-scale producers,
many of whom grow and sell food just to survive. Roughly 35 per-
cent of Ugandans live below the poverty line.
chapterone 25
A worker hefts a bag of maize from the truck to the warehouse. UGTL expects 200,000
tons of tradable maize in 2004; much of that will pass through the warehouse.
system closely linked to USAID's on past performance and industry
strategic objective and the project's trends. Younger industries will make
annual work plan, along with active par- smaller strides than older, more estab-
ticipation of project technical personnel lished ones, and should consolidate in
in the system, were critical to project associations for strength. However,
success. Each intervention under IDEA deciding on grant support to industry
was aimed at the ultimate objective of associations is very challenging; par-
increasing incomes and employment ticularly insofar as issues of sustain-
for rural producers, employees, traders, ability are concerned. Industries in
and exporters. The M&E system pro- which the exporters are heavily
vided a mechanism for feedback that invested in their businesses and asso-
informed staff of needed program and ciation, and understand the benefits
project adjustments. of membership—for example, flow-
ers and vanilla-function the best.
Scrutinize grants not once, twice, but three Beware of opportunistic traders
times. The grantee must have the because these small businesses are less
appropriate personnel to conduct and able to pay than committed exporters.
oversee program activities. For exam- Cost sharing is critical to building a
ple, if the grantee is conducting veg- sense of ownership in the program. If
etable or flower research trials, it must the beneficiary feels that the grant is a
have a full-time employee with the handout, they will be less inclined to
appropriate skills outlined in the focus on achieving results.
grant. Research trials should not
become trial and error sessions. The Financing the sector. Financing is needed
IDEA project staff was also aware of for the NTAE sector, and agribusi-
the danger of dooming grantees by ness generally. Developing countries
setting the bar too high. Benchmarks that have fully succeeded in creating
must be relevant and realistic, based high-value NTAE exports often have
26 chapterone
"When it comes to a business sector that received soft Project Best Practices
money that people loans from donors for such things as The IDEA staff provided signifi-
don't have, that's greenhouses and equipment. Loan cant feedback on a series of best
where IDEA helped us guarantee programs, low interest practices compiled or logged during
the most. rates, grace periods on repayment of the life of the project. Below are
[Agribusinessmen] capital, and government tax incentives some selections.
want agricultural are all features that donors can use
loans. But even we to stimulate continued, high-value - A well-functioning, results tracking
can't afford them. If NTAE growth in Uganda. On the low M&E system with technical team
this project could have value side, programs directed towards involvement is critical for report-
a component of fund- enhancing farmer income through ing, planning, and trouble-shooting.
ing for low interest training and market linkages, coupled
loans, that would be a with commercial bank engagement - An integrated commodity chain
big deal. Most people through assistance in establishing support approach should be used
cannot afford these contact points and banker develop- on selected commodities.
rates—22 to 48 percent ment, have proven to be effective and
interest. A project sustainable because of the potential - For a commodity, find the segment
needs to negotiate for profits for banks. Working to bring a of the market chain where there is
a lower, set rate. It comfort level to banks via business- likely to be the most return on pro-
would involve guaran- oriented technical assistance to both ject resources; at that segment,
tees maybe; but that's farmers and banks should be a priority. identify the potential champions.
what it takes."
-Chris Kaijuka, Innovative Credit Solutions
partner of FICA
IDEA developed initiatives to deal with the fact that commercial banks
were not initially interested in the NTAE sector:
Financial mediation for trade finance from Barclays Bank with over $3
million secured for UGTL and FHL.
Use of a Bank of Uganda Export Credit Guarantee Scheme for floricul-
ture investments.
Design and implementation of ATAIN, an input inventory credit guaran-
tee program for distributors and stockists.
Credit guarantee programs with Centenary Rural Development Bank for
commercial maize farmers.
Credit guarantee programs with Standard Chartered and Barclays for
private sector seed companies and commercial maize production.
A lease/purchase program with DFCU leasing on farming, post-harvest
handling, and processing equipment.
chapterone 27
- Promotion of NTAE requires ade- - Provide clients with training in
quate measures to mitigate environ- business and financial manage-
mental concerns. ment, especially strict manage-
ment of financial resources, par-
- Focus on the private sector while ticularly borrowed funds.
building appropriate public-pri-
vate partnerships. - Results-oriented grants and subcon-
tracts are important for jump-start-
- Be market-led but also tend to the ing activities and risk-sharing.
supply side: quality product and suf-
ficient volumes are critical. - The number of associations sup-
ported should be limited, focus on
- Apply a four-pronged focus of tech- those at the apex and those serious
nology transfer, input supply, out- about providing relevant services
put marketing, and financial services to their members.
support to the production base.
- Gender balance in a private-sec-
- With smallholders, it's best to focus tor environment can be attained
initially on what they can do using through proactive and targeted
their own resources. interventions.
- Market-led studies must be under- - Capitalize on the opportunities to
taken before taking on a new com- leverage resources and activities.
modity; the markets must exist and
be accessible and there must be a - Grants should have very specific
way of producing the product that goals that benefit entire industries
meets market requirements. to maximize achievements.
Just the Facts Ma'am: Impacting Women Through IDEA
Seventy to 80 percent of Uganda's agricultural labor force is women,
while 26 percent of rural households are headed by women. Yet only 7
percent of women own land and 30 percent have access to and control
over proceeds. In this environment, IDEA went to work. It did not
specifically develop a program for women but instead provided better
than equal access to women in all of its programs. By the end of the
project, women encompassed:
60% of flower industry employees
56% of fresh produce growers
37% of vanilla producers
18% of rural ATAIN inputs stockists
11% of commercial farmers
25% of project-supported loan beneficiaries
28 chapterone
Women account for roughly 60 percent of Uganda's flower industry.
About 40 percent, or 3,200 of all employees are single, and most of
those are women.
chapterone 29
Maize farmer Laston Mugoya and his family stand between their homes. Mugoya cred-
its construction of the new home, right, to IDEA for increasing the family's income
through training.
- Whenever appropriate, offer - Over $403 million in selected
grant funding for tangible items NTAE commodity exports sup-
and tie grants to specific program ported since 1995
benchmarks. For example, with-
holding funds is effective when - Increased rural area household
you want the entity to secure incomes of a large number of
continued funding from alterna- IDEA smallholder clients
tive sources and the release of
promised new seed varieties is - A base of commercial farmers
still pending. and smallholders, many now in
organized, sustainable commer-
- Grant activities that work in cial producer groups
conjunction with proven project
technical programs, such as - The existence of a basic, function-
pairing seed distribution pro- al low value crop market system
grams with demonstrations of
improved varieties, are more - Greater banking community con-
likely to have a greater impact fidence in the agricultural sector,
than stand-alone programs. with numerous relationships built
between bankers and NTAE-relat-
The Impact ed borrowers
IDEA's work unquestionably improved
Uganda's economy, but it also had soft- - A variety of impacts on women
er impacts because it changed attitudes in the NTAE sector
across the public and private sectors-
from farmers to bankers to NARO - The beginnings of sustainable
research staff. Below are key impacts: NTAE commodity clusters and
30 chapterone
critical cluster elements, including has built foundations and designed
sector self-regulation, market-driven blueprints for lasting NTAE exports,
codes of practice, and associations increases in rural household income
for smallholder and employee fami-
- A critical mass of export volumes lies, growth in agribusiness, improved
puts Uganda on the map as a reliable market systems, and cluster-based
supplier of quality products, such as competitiveness. With these mea-
cut flowers, cuttings and vanilla sured accomplishments, the list of
what remains takes on even greater
- The foundations for a, sustainable importance.
private sector input supply system
- Donors should continue to
- Increased off-farm employment-a target the private sector, whether
multiplier effect of IDEA's work- focused on agribusiness, finance,
with increased work opportunities competitiveness, or commercial
in the inputs sector, processing, smallholder development.
commodity and employee transport,
construction and warehousing - Financing for the NTAE sector,
and agribusiness generally, is
- A cadre of Ugandan agribusiness needed. Developing c o u n t r i e s
professionals coming from the that have fully succeeded in high
IDEA team, IDEA/Makerere value NTAE exports have a busi-
University undergraduate agribusi- ness sector that received soft
ness intern program, Makerere loans from donors. Loan guaran-
University agribusiness manage- tee programs, low interest rates,
ment graduate program, the grace periods on repayment of
Applied Tropical Floriculture capital, and government tax
course run collaboratively by incentives are all features that
Makerere University and UFEA, donors can use to stimulate con-
and other Ugandan agricultural tinued high value NTAE growth
consultants who worked through in Uganda. On the low value side,
the IDEA project SME and agricultural financing
are critical to NTAE sector
- Business linkages within Uganda, growth. Working to bring a com-
in the region, and with U.S. and fort level to banks via donor-
multinational firms funded technical assistance, loan
guarantees, and other appropriate
- Regulatory changes in seed vari- agricultural financing mecha-
ety testing, agrochemical issues, nisms should be a priority.
and import duty regulations
- The private sector and donors
The Challenges Ahead can work with and grow business-
Uganda's NTAE sector, and agricul- minded producer organizations.
ture sector in general, offers continu- Commercial producer organiza-
ing challenges. However, IDEA tions can be used to reach small-
chapterone 31
holders for nearly all Ugandan - The private sector input supply
crops except flowers. system needs expanded assistance
and support.
- A layer of intermediary enterpris-
es is necessary to move com- - Efforts towards environmental
modities from the farm as quick- impact awareness should continue.
ly as possible, and provide ser-
vices such as processing, trans- - Training, technology transfer,
port, warehousing, and infras- and capacity-building efforts in
tructure development. the NTAE sectors still require
major support.
- Donors can help NTAE com-
modity sectors develop market - There is a continuing need for
led codes of practice, a standard reinvestment in commercial-driv-
requirement for any serious en research. Research is a public
NTAE industry. The GOU should good and should be funded by gov-
meet these standards with its ernment or donors. The private
own accreditation program. IDEA sector does not have the resources
provided support for codes in to undertake relevant research.
floriculture, horticulture, vanilla,
and cocoa. The latter two are not - After more than nine years,
yet finalized. IDEA found that market infor-
A Sampling of IDEA-Brokered Alliances
with U.S. and Multinational Firms
IDEA promoted vanilla to overseas buyers, working to bring vanilla
exporters together with U.S. firms McCormick and Shanks, and Zinc
and Triest, some of the world's largest vanilla buyers.
Monsanto, Aventis, and Syngenta all have been investors in the seed
sector, conducting research trials and bringing Uganda a variety of
options. IDEA served as their first entrée to local seed companies.
UNGA Millers (U) Ltd., a U.S. multinational Seaboard Corporation, trades
in commodities and has worked with IDEA and its grain exporter clients.
IDEA formed partnerships with agrochemical and input firms, Dow
Chemicals, CropLife, Monsanto, and Universal Chemicals for training in
post-harvest handling, pesticide safe use, conservation tillage, and
improved seed varieties and fertilizer use.
IDEA effectively promoted and facilitated foreign and local investment in flow-
ers, vanilla, and grains. Successes in the sector built investor confidence.
32 chapterone
A boy breaks away from his siblings to wander the upland fields. Fifty-one percent of
Uganda's population are younger than 14 years.
"The product mix in mation systems were not sustain- particularly in post-harvest han-
the HV range should able within associations or the dling. A strong domestic market
be revisited, focusing private sector. Basic market infor- system is an excellent base for
on crops where there mation should be funded by export market systems.
is real competitive the government or a donor as a
advantage, and where public good, as it is in the U.S. - Continue targeted support to
Uganda is gaining a From this basic structure a serious NTAE sector apex associ-
reputation as a bench- futures market will emerge, with ations, focusing on relevant
mark in the industry. improved information. member services.
They may only be
small volume niche - Promoting a cluster approach - Donors and the private sector
products, but if they is critical in design of new donor should always seek out new
are good enough to efforts—it ensures strengthened opportunities and innovations,
beat off all competi- and integrated commodity chains. whether assessing the feasibility
tion, they will allow of producing a new commodity,
exporters to consoli- - Strengthening domestic and moving into new regions with a
date a longer term regional market systems is impor- particular commodity, or testing
business; and later tant yet has been overlooked, new varieties.
they can expand the
product's range."
-Steve Humphreys,
HV component
chapterone 33
34 chapterone
An IDEA district site coordinator pauses to survey a farmer's land.
IDEA holds technology transfer training in 20 districts, and 2,521
sites hosted training in 2003.
chapterone 35
A maize farmer shows off his land after flagging down an IDEA site
coordinator driving through the village.
36 i hap ap one
cd e a t e r p r o a c h
CHAPTERTWO
Low Value Crop Export Development
IDEA's low-value team technical assistants made it their mission to get out into
the field to promote the best practices developed back at the ADC nerve center.
The team pushed new technologies, such as fertilizers and proper crop spacing,
as integral to its "show and tell" message. However, the smallholder base of
peasant and subsistence producers made targeting "the winners" even more dif-
ficult. Work under the low value component focused on identifying and sup-
porting a reliable, business-minded private sector client base of producers, pro-
ducer organizations, traders, export associations, and exporters. The low value
team focused on technical advice, technology transfer, input supply, and output
marketing. The project focused primarily on maize and beans for the NTAE sec-
tor and, in the last few years of the project, began supporting efforts in rice,
sesame, and other grains. Since 1995, the low value component has demonstrat-
ed that:
- maize exports grew steadily year by year
- beans presented insurmountable post-harvest problems and regional variety
preferences; therefore support was dropped later in the project
- there were exciting opportunities for sesame in the North
- proven successes in upland rice came in the last two years of the project
By the end of the project, export figures for the targeted low value crops, maize
and beans, were just over the project target of $34 million in export value, com-
pared with $11.4 million in 1995. Aside from the dollar value and export vol-
umes, the LV component has achieved tremendous success in growing its base
of commercial smallholders and larger farmers, as well as business-minded pro-
ducer organizations that IDEA helped to build. Results were achieved in eight
major activity areas:
1. The project sought to generate improved production technologies by sup-
porting local seed companies and NARO. Project grants were used for
technology packages and handbooks for farmers, as well as the introduc-
tion of new seed varieties for maize, beans, and oilseeds. Technology pack-
ages could include, for example, seeds, fertilizers, crop chemicals, and other
inputs such as sprayers and measuring strings.
2. These new production technologies, in addition to post-harvest technolo-
gies, were promoted directly to large numbers of farmer-clients and others
along the market chain who worked directly with producers.
chaptertwo 37
A FICA worker carries bags of maize seed from the warehouse to a customer's
pickup truck. Establishing the supplier-distributor-stockist linkage is one of IDEA's
significant achievements.
3. The project promoted and sup- ages, improve quality and farmer
ported a private sector input access, expand production for
supply network for low value regional markets, and support
farmers that emphasized that agribusinesses with their own
regular availability, accessibility, seed distribution and farmer
and affordability were critical to commercialization programs.
meeting farmers' new and grow-
ing needs. The supplier-distribu- 5. A variety of market informa-
tor-stockist linkage is significant tion efforts were undertaken
as stockists also play the role of with a focus at the trader
extension agent, helping farm- and exporter level. Activities
ers to adopt improved farming included helping Uganda
practices and boosting incomes. Grain Traders Ltd. (UGTL)
develop and disseminate their
4. The low value team also own market reports; collabora-
supported efforts in seed multi- tion with IITA's Foodnet and
plication and distribution, work- USAID's FEWS NET and
ing closely with private seed RATES projects on the Web-
companies to mitigate seed short- based Regional Agricultural
It's All In the Numbers
The original IDEA contract signed in 1995 required that the project train
1,600 farmers and extension workers per year. Once on the ground in
Uganda, the team felt this number was too low to be catalytic or bring
about change. They knew from experience that resistance to change is
human nature and particularly common in farmers. They knew that a very
large numbers of farmers needed to be exposed to training so that
enough risk-taking, open-minded farmers could be found. And so the net
was cast wider and they committed to train 180,000 farmers per year.
38 chaptertwo
Trade Information Network support out-grower initiatives
(RATIN); and regular partici- for maize, bean, and rice seed
pation in crop forecast meet- production.
ings with traders, government,
and donors. 8. Finally, the project provided
advisory services and training
6. The project provided ongoing and technology-transfer assis-
support for the marketing of tance to exporter clients. This
farmers' products via 25 rural agri- included UGTL and its effort
cultural marketing centers. Project to support and buy from
staff helped build linkages upcountry producer groups
between a variety of traders and and purchase needed process-
buyers and the 25 centers. ing equipment. The team also
supported Roka Ale's develop-
7. The team worked with seed ment of the sesame market in
companies to develop and the West Nile.
The LV Component by the Numbers
Volume of maize and bean exports: 1995: 51,740 metric tons; 2003:
164,835 metric tons
Value of maize and bean exports: 1995: $11.4 million; 2003: $34.7 million
Number of commercial farmer clients: 2,864
Percentage who are women: 11 percent
Technology transfer/training programs in 20 districts
Number of technology transfer demonstration sites: 1995: 15; 2003: 2,521
Percentage of farmers trained who are women: 32 percent
Percentage of farmers adopting low input technology: 1996: 5 percent;
2003: 65 percent
Percentage of farmers adopting high input technology: 1996: 0 percent;
2003: 12 percent
IDEA-supported commercial farmer loans 2000-2003: $2.26 million
Loan repayment rates: 100 percent
Percentage of loan beneficiaries who are women: 25 percent
Number of farmers served by ATAIN program stockists in 2003: 116,255
Number of employees in the input supply system: 1998: 115; 2003: 825
chaptertwo 39
Fig. 4.5 Volume and Value of Maize and Bean Exports from Uganda, 1995-2003
Maize
Beans
Total Value
90 24
21.04
80 20.63 131.6
21
70
Volume (000' tons)
16.40 18
Value ($ million)
16.05
15.94
60
14
14.77
12.41 85.8
50 11.40 80.0
69.5 64.8 12
40
9
30 54.7
52.0 38.5 33.2
39.6 31.3 6
20 27.2
37.2
18.1 18.4 3
10 16.6 15.3
14.6
0 0
1995 1996 1997 1998 1999 2000 2001 2002 2003
Source: ADC/IDEA Project
Along the Market Chain results-of this approach. Using the
We examine the low value component voices, faces and experiences of the
further with a series of impact stories people involved along the market
meant to guide the reader through the chain, the goal is to give a balanced
commodity market chain. The narra- and informed human perspective that
tives presented here focus on maize, brings to life those impacted by
but also touch on the up-and-coming USAID's IDEA.
upland rice crop that saw late-
bloomer success with IDEA. The sto- The maize farmer:
ries add depth to the eight focus areas Just before Laston Mugoya razed
discussed on pages 37-39. By offering his house and planted over the 36-
a glimpse into that intangible, square-foot plot with a few stalks of
slippery side of the anecdotal, the sto- maize and a banana tree, he took a
ries chronicle the successes and hard- mental snapshot of the site. He
ships of USAID's decade-long com- stared hard at the thick and brown
mitment to Uganda. The series also straw roof, the smooth mud walls,
illustrate how the integrated commod- and the circular shape of his hut,
ity system approach was implemented, paused, and quickly went to work
how those receiving assistance and demolishing the structure where he
guidance reacted, and presents the lived for nearly 18 years with his wife
results-both direct and indirect and growing family.
40 chaptertwo
Maize farmer Laston Mugoya opens the door to his maize crib to showoff about 500
kilos of dry maize. To help improve post-production practices for small-holders, IDEA
offered technical assistance and small grants to help construct such drying and
storage cribs.
"I started with one acre of land before before I get only three bags of
the IDEA project. One acre of land maize from the land, now I am get-
just here," Mugoya says, pointing ting 20 or 22 bags to each acre."
to the area where maize grew hap-
hazardly around the old home. "I The ADC and IDEA worked with
have 20 acres today. I am the owner more than 1,560 small-scale commer-
of this land. I am the owner of this cial farmers like Mugoya in 2003
house. Look at this home. I am able alone. Almost 34 percent of those
to build this home because of received some credit, and loan repay-
IDEA project." ment rates were 100 percent. Most
small-scale farmers worked in maize,
Mugoya gestures toward a new home cultivating roughly 4,300 hectares of
only a few feet from old plot. It is a land in all and yielding about 3.7 met-
humble structure of bricks and mor- ric tons per hectare, or nearly 16,000
tar, with a dirt floor, three rooms, metric tons in total. However the
and a roof of steel sheets glaring numbers have improved almost year
against the sky. In the areas of to year with IDEA's integrated com-
Uganda touched by IDEA, those modities approach of technical assis-
steel sheets are a metaphor for suc- tance, increased production and mar-
cess and empowerment for small- ket linkages, the real story lies here
holders and bankers alike—anyone with farmers like Mugoya who make
working with the project. up the project's foundation. Changing
minds on the ground and attitudes
"I have been a farmer doing this since within the lending and commodities
I was a child," Mugoya says. "I am market chain was a difficult task for
cultivating this land for many years. IDEA staff that took years of effort.
But you know that my output was Even the simplest efforts like intro-
miserably low. I say this, but I did ducing fertilizers hit a snag.
not know and nobody knows that
the output was so terrible. But "Yes, I thought at first that the fertil-
IDEA project came and we learned izers would hurt the ground and the
the new technologies, and we plants," Mugoya says. "Everyone here
learned to use the inputs. So, when is like this. I am not the only one.
chaptertwo 41
Abraham Batamboozi, Bugiri district site coordinator for IDEA, stands over the former
site of Laston Mugoya's home.
Everyone here thought the fertilizers more practical concerns like access to
hurt the ground because that is what adequate inputs and capital to grow
we are taught from a long time." their business, those requests less-
ened. Instead, small-scale farmers
The farmer culture also accepted a cer- utter business concerns that echo
tain amount of crop loss to disease and Mugoya's own:
rot due to high moisture content. IDEA
helped to change that mindset through "I think that one of the most impor-
a grant program that provided success- tant things that IDEA project did
ful farmers with funds to build cribs for for me was connect me with a high
storing and drying. Mugoya's own crib profile market. Maybe getting
holds about 800 kilos of maize, and stronger ties to these markets is
there are others with 30,000-kilo capac- very important now."
ities. The cribs also allow farmers to
store maize until the off-season when The district site coordinator:
demand is up, which lends stability to Abraham Batamboozi just finished
the market by supplying buyers and telling the funniest part of the story
traders with product. about the man who grew too much
maize, the part about how the man, in
Small-scale farmers like Mugoya con- an effort to keep his corn dry and
tinue to make superfluous requests of secure, began stacking the corn in
donors for expensive things like trac- every room of his small home until,
tors and commercial drying machines. finally, it forced him and his family to
However, as the farmers turned to sleep in a corner of the kitchen.
42 chaptertwo
"He started with around 5 acres and grass behind the home. She also
then he went crazy, shooting up to 50 mentions that her older children
acres," Batamboozi says. "He over- attend school regularly and school
expanded and did not account for fees are no longer an issue.
storage. So, he got excited and had to
store maize all over the house, in the "We monitor and encourage the move
sitting room, in the bedroom, on the from peasant to commercial farm-
veranda. It was very unsightly. Maize ing," Batamboozi says, explaining his
chased him out of the house. But it is role as site coordinator and training
a lucky problem to have." leader in the community. "IDEA gave
[the trainers] practical training first.
Batamboozi, the Bugiri district site coor- They showed us how to apply fertilizers
dinator for the IDEA and now APEP to a certain area, to work with new
projects, put both hands on his thighs seeds, and they let us practice on an
and slumped over, filling his own home acre. When we get experienced, we hold
with booming laughter. Then his mobile demonstrations with area farmers and
phone rang. He checked the caller I.D. share the practical knowledge. Then the
tag and looked up, smiling broadly. farmers do the same, and on and on."
"It is him. This man I am talking about." That's the simple explanation of how
IDEA's demonstration plots revolu-
Tenwya Christopher is the farmer. He tionized the commercial agriculture
said that IDEA technical assistance sector in Uganda, increasing yields
pushed his production over the 20- five- and ten-fold in most instances.
acre mark within 18 months. However, underlying the success is
a more complex methodology of
"We got training to use improved agribusiness. Before training is admin-
seeds and fertilizers," Christopher istered, technical assistants prepare
says during a phone interview. "Now I farmers with advice on selecting the
have the cribs and can use them to dry right land and enterprise—for exam-
and store the maize. I asked my fami- ple, whether to choose half an acre of
ly to sacrifice at first, and right now I maize or five acres of upland rice. In
have 55 acres. I am very happy I this, producers look at the type of
got involved." seed and fertilizers required, study the
land and discuss the investment, at
Christopher lives close by, so he asks which point loans officers may be
us to visit his home so that his wife introduced. Basic agronomical prac-
can show us the new storage cribs. tices follow, such as spacing, where
She retells the stories and talks more and when to plant, how to plant,
about suffering through months of proper seed variety, when to weed,
discomfort. On the other hand, she record keeping, and how to stop
says, their lives have improved great- pests and disease. Proper use of
ly in just a few years. They employ inputs underscores most success,
laborers to work the farm. She Batamboozi says. Discussions of
points to new cattle feeding on timely harvests and post-harvest han-
chaptertwo 43
dling follow as the season progresses. "The farmer is at the mercy of the
IDEA staff encourages market link- market. The banks are at the mercy
ages and may suggest local, relief or of the market. We try to forecast the
export linkages depending on the pro- market, but some are local and
ducer's level of effort and ability. you cannot predict factors such as
Finally, reinvestment is encouraged. weather, hunger or drought, or how
neighboring countries affect us," says
"We convince a poor farmer to sell Julius Segirinya, director of agricultur-
something of theirs, like a goat," al lending for Centenary Rural
Batamboozi says. "They invest in a Development Bank.
quarter-acre of maize. At the end you
can get three times the money for the "We look for active efforts by donors
goat, and you will have money to buy and governments to stabilize the
back the goat, a better goat. price of maize to not repeat grain
crash scenarios. When something like
"Some are amazed," he continues. "If UGTL buys and stores maize to sta-
you have someone who had six bags bilize the prices, and the government
[of maize] and then they go to 20, searches for markets outside of this
they ask, 'Where is the magic?'." country to make sure the maize is
sold at adequate prices, that's all we
Batamboozi also has amazed himself, can ask for."
as have other demonstration plot
farmers and site coordinators This stability is not possible without
involved in IDEA. The 45-year-old increased training, production and
father of eight has built the family a monitoring, however. And IDEA
new home, bought "a few cattle," stepped in to encourage farmers to
owns his own land for the first time, is plant maize on a larger scale, graduat-
working toward a bachelor's degree ing from subsistence to commercial
from Busoga University in Iganga, levels. That effort created access to
ensures an education for his children, agricultural loans and contributes to
and practices what he preaches in his how farmers manage access to inputs
spare time. and labor.
"We are giving advice so we cannot News from the lending sector regard-
beg for food." ing how farmers use these loans is
improving, Segirinya says. He notes
The agricultural loans officer: that the reasons given by many small-
From the perspective of the agricultur- holders for requesting loans usually
al lending institution, repayment is the include access to inputs and building
ultimate sign of success—it's the bot- storage facilities, like stilted cribs for
tom line. So when you consider that maize, rather than for expensive,
repayment of agricultural loans asso- needless gadgets like tractors.
ciated with the IDEA project are Interviews conducted with maize
somewhere in the high-90 percent farmers in the Bugiri district support-
range, success is obvious. ed to Segirinya's claim.
44 chaptertwo
Collecting water for dinner.
Repayment plans tailored specifically and price forecasts that improved their
to suit needs of farmers also have bottom line as well as their relationship
helped the banks see greater return with clients.
on their investment.
The inputs dealer:
"We ensure that the payments are The input supply system under the
flexible and well adapted to the cash IDEA project exploded in 2003,
flows of the producer," Segirinya working with more than 116,250
explains. "We want the farmer to pay farmers to get them more than 1,200
when he has the cash, so we tailor metric tons of maize seed valued at
toward the harvest seasons and nearly $830,000. The value of fertiliz-
leave room for the unexpected. ers sold also climbed to more than
Installments are not fixed and we $7.5 million. From a flailing, govern-
offer varying sizes." ment-controlled industry with a tiny
client base, it was transformed into a
The average smallholder loan is about full-scale private operation employing
1 million USh. The bank also sees a 825 people split evenly among men
strong correlation between smallhold- and women. Nearly 400 rural stockists
er and home improvement loans, with also are flexing their muscles, offering
the latter requested as the farmer technologies including seed, herbi-
gathers assets and builds the business. cides, fertilizers, and pesticides. In the
midst of these eye-popping numbers,
Segirinya also credits the IDEA pro- however, there is a moment for pause:
ject with organizing training work- the input supply system cannot keep up
shops for loans officers to strengthen with the current demand of farmers.
their skills in agribusiness lending. He
says that IDEA staff encouraged offi- FICA, Uganda's first successful seed
cers to visit clients regularly, inspect and inputs sales company to be
their fields and crops, and offer tips to owned and operated by indigenous
increase yields. IDEA staff also provid- Ugandans, is producing and shipping
ed the bank with current market news at capacity, says partner Chris Kaijuka.
chaptertwo 45
46 chapterone
The FICA processing facility is hum- his staff. Small grants allowed FICA
ming with upland rice and maize seed, representatives to visit Zimbabwe to
treated and then packaged for export prepare linkages. Now FICA also
to markets like Tanzania. In 2001, just exports to Malawi, Tanzania, Kenya,
after FICA approached IDEA for and Zambia.
assistance, the company set a moder-
ate goal to sell 1,000 metric tons of "Those markets are not easily pene-
maize seed per annum. They surpassed trated," Kaijuka explains. "The associ-
that mark easily and are selling more ations helped. Growing grain is
than 2,500 metric tons per year now, looked at as a cash crop and not food
with a goal of 5,000 metric tons, con- now, and prices have improved from
ditional with expansion of their cur- 30 shillings a kilo to 150 shillings."
rent facilities.
Developing their own "exclusive vari-
"It's a business of showing and ety" became Kaijuka's main venture
telling," Kaijuka says, explaining the once the markets opened. Seventy
secret to inputs sales as imparted percent of the seeds exported are
through IDEA. "The major problem maize, three varieties and two hybrids,
was that government was leading all developed with NARO through
everything. The government would IDEA funding.
give cheap prices to the population,
impure seed, and when the private "IDEA project let us climb on their
sector came and offered better seed back. They provided the funding for
with a higher price, the farmer looks research. Next we will push for private
at you funny. He won't invest. But, if accreditation beyond the National Seed
you plant next to the same farmer, Certification, something that guarantees
and he sees it mature so much faster, our purity in the world markets."
with all the fruit, then the farmer will
say, 'What is this?' You change atti- IDEA grants also contributed to con-
tudes quickly." struction of the FICA processing facili-
ty and provided smallholder farmers
With credentials in grain trading with confidence through investment
stretching back nearly 20 years, opportunities. Smallholders, the main
Kaijuka admits he is no farmer: A producers of FICA seed, sign contracts
businessman with an appreciation for for allotted amounts and develop yearly
seed, is more like it. He realized an business plans. IDEA encouraged
opportunity in the inputs market in smallholders to form associations with
1996 when the seed business was lib- strong leaders, Kaijuka says, to improve
eralized. But he waited and studied access to financing.
the market, showed he was serious.
IDEA began supplying market "That's really what IDEA project
research studies around 2000 and did: It brought some reality to agricul-
pushing FICA to expand beyond tural business in Uganda," Kaijuka
Uganda, providing the technical says. "We sustain it by encouraging
assistance and short term training for training, more training at our own
chaptertwo 47
demonstration sites. It's worth more Abraham Batamboozi, Bugiri district
than any newspaper ad for inputs." site coordinator for IDEA/APEP pro-
ject: Getting the farmers together in
The importance of producer groups became very important because
organizations: they can easily access inputs together
Fred Muhhuku, the IDEA producer and get lower prices by buying in bulk.
organization and inputs specialist: And when they connect to markets,
IDEA needed people to build a pri- they get better prices by negotiating in
vate sector seed industry from noth- groups. Education is very important,
ing. We looked to people who were too. Some of the illiterate farmers will at
already buying seed, the smaller play- least know the kilogram cost because of
ers. They connected, just like the the association, the market information
farmers do in the associations. Now provided through the group. Personal
there are seven private corporate marketing is not a problem for peo-
companies and international compa- ple, but they will never get the best
nies collecting here because of the lib- price on their own. And the associa-
eralization, as well as companies from tions need to convince farmers to go
regional areas in Africa. The private beyond our borders to the bigger
sector is providing 80 percent of the price markets. The local markets are
seed at improved quality. Prices have not reliable for everyone.
been constant because of competi-
tion, and IDEA encouraged competi- The commodities trader:
tion that kept prices stable. The low value commodities market in
Competition among whom? It starts Uganda was a slow train moving
with the producer organizations that through the agricultural sector in
supply the traders and dealers. It's 1995, when the country exported a
much more focused now. feeble $7.25 million in maize, or
37,179 metric tons.
Julius Segirinya, Centenary Rural Bank,
director of agricultural loans depart- "And the [World Food Program] were
ment: The associations, through IDEA setting standards based upon the
influence, identified potential crops for European standards," says John
financing through targets set by the Magnay, managing director of
bank and business targets for each Uganda Grain Traders Limited. "You
farmer in relation to the association. know what was typical of Uganda
The associations also encourage and maize, grain then? Shriveled, diseased,
practice record keeping, and can high moisture-content, fermented and
easily provide a list of farmers who spoiled. Train cars full of stinking,
might qualify for loans based on rotting maize."
assets and effort. IDEA started the
practice of supplying price informa- Comprised mainly of field crops like
tion, market information, price fore- maize, beans and rice, the Ugandan
casts and movement on maize pro- LV farmers number roughly 5 million
duction to the bank. The good associ- small-scale households, 80 percent
ations have picked up on this. of whom own an average of less
48 chaptertwo
UGTL warehouse workers carry sacks of coffee beans. Standing 16 members strong,
UGTL clawed its way from the 2001 grain crash to help Uganda establish new quality
standards.
than 2 hectares. USAID's IDEA pro- window overlooking a 100,000 square
ject reached 1 million of those house- foot UGTL warehouse scattered with
holds. That's a hefty number—hefty stacks and sacks of maize seed, barley
potential—but those farmers were and coffee. As big as an airplane
scattered, unorganized, without stan- hangar with a capacity of 25,000 met-
dards, access to inputs, markets, capi- ric tons, the place can employ 150
tal investment, or to the modern tech- laborers in shifts over 24 hours.
nical knowledge and tools available.
Most importantly, the smallholders The UGTL now stands at 16 members
lacked a power player, a locomotive to strong. However, in Sept. 2001 the
pull their individual cars through the entire Uganda grain trading industry
ripening sector. was threatened by infighting and price-
cutting, side-selling and low quality
USAID, on the heels of GOU decen- grain, maize especially. Magnay scrolls
tralization within the agricultural sec- through a few SME text messages on
tor, stepped in with IDEA in 1995 to his mobile phone—current grain
vastly increase production of the low prices—pulls up a PowerPoint on his
value crops. With the integrated com- laptop and offers a critique of IDEA.
modities approach practiced by the
IDEA project, production comes "We're seeing maize production go up
first. Maize, particularly, looked like a dramatically right now," he says, cred-
winner in the regional foodstuffs, iting IDEA technical assistance and
grain and relief markets. Magnay says market linkages with the surge. "We
it accounts for only about 15 percent campaigned for increased production,
of the country's food requirement, and we're seeing the results: 100,000
but anywhere from 80 to 90 percent tons of maize and 80,000 tons of
in neighboring countries like Kenya beans to the WFP, the dominant com-
and Malawi. There are huge piles of it mercial buyer. About 80,000 tons
just below his office, visible from a went to Kenya. This year there will be
chaptertwo 49
200,000 tons of tradable maize. The quality of Ugandan maize exports."
market is rising thanks to increased UGTL now works with inspection
production at the farmer level. But, agencies to test at farm gate level,
remember IDEA did not address the training farmers to keep disease rat-
issue of the market standards and ings less than 3 percent and moisture
quality in the beginning, only pro- content less than 13 percent. These
duction." increased standards will bump the
maize crop into export markets in
That changed after the grain crash of addition to WFP. Oddly enough,
2001, when a large majority of small- through the WFP Uganda smallhold-
holders defaulted on loans and lost ers supply 80 percent of the grain to
land. IDEA pushed for self-regulation their own IDPs in the Northern part
in the industry to bring up the stan- of the country.
dards and increase demand. Magnay
holds up a poster now enforced by the "It's a powder keg," Magnay says. "Those
GOU. It reads: "By rail ferry to the IDPs can farm and they will farm, and
Tanzania market. All stakeholders in when they start to turn out another
the export chain are requested to 100,000 metric tons, we'll be sitting on it
comply with the requirements indicat- here unless we get recognition from the
ed above which aim at uplifting the African and European markets."
50 chaptertwo
Increased quality will also introduce played the important watchdog role:
an important risk element: buying sur- the National Environment Statute
plus in the harvest season, maintain- (1995), the Water Statute (1995) and
ing its quality and selling out of stor- National Wetlands Policy promote
age. What more is required? Finance environmentally safe wetland use,
and storage, says Magnay. thereby limiting paddy rice.
"We have to change African govern- At the start of 2002, there was essen-
ments to buy food security. Africa is tially no upland, rain-fed rice produc-
always going to be in surplus and tion. But the climate was ripe, invest-
deficits. It's a biblical epidemic of ment crept in, and research continued
weather and tense conditions." to suggest that upland rice would fill
holes in the highlands left by wilting
Magnay suggests a trip out behind the coffee. Food prices of staple crops
warehouse to drive home his last point such as potatoes, bananas and maize
about the future of grain trading in also were on the rise. Then new vari-
Uganda. He slides open a huge steel eties were developed and imported
door that reveals two sets of railroad from regional markets. All of the sud-
tracks and a loading station. den, by the end of the project in early
2004, upland rice was produced in 29
"It can hold about 20 train cars, with districts and Uganda's Vice President
the ability to switch tracks." Gilbert Bukenya launched the National
Rice Program in March 2004.
Average exports now stand at roughly
$11.8 million and 67,800 metric tons, How did all this start? Tilda Uganda, a
and growing. Looks like the industry transnational rice producer/exporter,
has found its locomotive. was in Uganda producing irrigated rice
with yields of 3 tons per hectare. Tilda
Upland Rice: From Start encountered the rice yellow mottle virus
to Finish in its irrigated production and asked
At their own choosing, upland rice WARDA to help solve the problem. A
farmers often grew their crop in WARDA consultant came to Uganda,
ankle, sometimes knee-deep primitive dealt with the virus and also let the
conditions in mosquito infested word out about five new rice varieties
swamps. There was no mandate under called NERICA (NEw RICe for
the PMA, NARO, or donors to Africa), specifically designed for
work in upland rice at that time, no upland, rain-fed conditions. Tilda
one telling the farmers, "Get out and others, including IDEA, were
of the swamps! There's a better skeptical yet intrigued. The consul-
way." In fact, the only organization tants answered their own skepticism
interested in upland rice was the by bringing some rice seed to Tilda
National Environmental Management where it was tested in 2001 on a small
Authority (NEMA), concerned pri- plot. Results were excellent. IDEA
marily with how the swamp rice threat- decided to run with the variety under
ens the wetlands. Before that, policies an out-grower scheme. They under-
chaptertwo 51
Out-grower schemes, or contract farming, helped make upland rice
a latecomer success for Ugandans through IDEA.
52 chapterone
took a number of interventions to free seed and inputs, and IDEA
get things started: offered lead farmer training as
well. By accepting the new
- In 2002, IDEA gave a grant to responsibilities of a lead farmer,
NASECO, a private seed company, these producers committed to
for technical assistance from the bringing in a minimum of 10
same former WARDA consultant farmers for group training and
to help with NERICA seed breed- observation sessions. Lead farm-
ing and multiplication. NASECO ers could also sell seed they pro-
then began selling the seed to the duced to their group.
ATAIN distributors and stockists
and private seed companies. - IDEA helped lead farmers estab-
lish rice seed centers in their vil-
- IDEA brought in 300 kilos of lages. The centers allowed farm-
growers seed and staff promoted ers to access seed at lower cost.
upland rice production in rice The seed centers also sold seed
growing regions with half-acre to the ATAIN stockists, who
demonstration plots developed would package it and sell it in
during both 2002 seasons. their village shops.
Demonstrations first focused to
the east on Ingaga, Kamulie, - The project's low value team-
Sronko, Pallisa, and Tororo. By the trained NAADS extension service
end of the year, they expanded to staff in production technologies in
Hoima, Kibale, Masindi, and all 29 rice-growing districts.
Kiboga in the west.
- To ensure the level of quality
- Farmers who provided their land product demanded by the two
for demonstration plots received firms, IDEA provided Tilda and
Rice and the Vice President
In 2002, Hunger Alert's country director heard about the phenomenal yields
in upland rice supported by IDEA. She purchased the seed form NASECO
and took it to Gulu in Northern Uganda where the USAID-supported NGO
worked with smallholders. IDEA provided technical advice to the effort.
Uganda's Vice President Gilbert Bukenya visited Gulu in late 2003 and
reported high yields when he visited the Hunger Alert project. So, he pur-
chased some seed from one of the farmers and took it to his home town,
Wakiso, outside of Kampala, where he distributed it to farmers. Again,
yields were remarkable. The vice president was so impressed that he called
IDEA in early 2004 and met with the low value team leader and IDEA's rice
consultant to plan a new special initiative in upland rice that will be imple-
mented under APEP.
chaptertwo 53
Nyanti Rice Millers field staff feed millions, store easily, and be trans-
with agronomic, financial, and ported trouble-free. More than ever,
business management training, countries are turning to rice as the
particularly as it related to harvest answer to urban sprawl and growth.
and post-harvest handling. Rice is less bulky and perishable than
traditional staple food crops, such
- IDEA helped FICA, a private as Uganda's own staples: matooke
inputs firm, import affordable bananas and maize. Brown, white,
herbicides needed for upland wild, long, medium, short, naturally
rice production and distribute fragrant, nutritious, rice comes in hun-
them via the ATAIN program. dreds of varieties and, lately, is defying
common notions about its cultivation.
In 2003, roughly 100 metric tons of
upland rice was produced. By early Upland rice varieties were researched
2004, 250 metric tons of seed were in the mid and late 1990s and
produced, with 60 percent sold endorsed by the IDEA project in a
by April 2004. The successes in joint venture with the West Africa
rice have had tremendous impacts Rice Development Association to
along the market chain. First, Tilda introduce several rain fed varieties
and Nyanti Rice Millers Ltd. are sell- with early maturity (90 to 120 days)
ing to local, Congolese, and Western and good yields (2,500 to 4,000
Kenyan markets, as well as to local kilo/ha). Images of the paddy farm-
markets. Second, Agro-Sonkoni, the ers toiling in disease- and pest-ridden
only rice milling machinery distribu- swamps and undermining wetland
tor in Uganda, now sells 200 rice conservation have been replaced
mills per year compared to a previous with men and women tending fields
average of four per year. Third, of lush, green upland rice waving in
financial institutions are beginning to the breezes of the Ugandan uplands,
show interest in upland rice. Toward where the air loses it tropical weight.
the end of the project, Standard Although officially the home for
Chartered Bank gave a loan to a large Ugandan coffee, recent coffee wilt
commercial rice farmer. and depressed world markets have
decreased the practicality of coffee
Upland Rice is a Late Bloomer as a cash crop for small-scale and
for Uganda larger commercial producers. Enter
As populations around the world upland rice and risk-takers like
urbanize at a higher rate, the race is on Majidu, a 32-year-old father of five
to uncover the versatile food that can who went from digging latrines as a
Why Import?
Uganda imports more than $20 million of rice annually. It costs $350 to
import one metric ton of rice and only $120 to produce one metric ton
of rice in Uganda.
54 chaptertwo
"Mostly reading and crafts," says Majidu's 16-year-old son about his favorite subjects in
school. New income has allowed the farmer to send all of his children to school.
journeyman to a commercial farmer an IDEA project extension agent giv-
employing 10 in his fields of maize, ing maize and upland rice demonstra-
sunflower and—his newest love— tions in his village. He told the agent
upland rice. about his desire to get involved with
the program.
Before commencing to dig waste pits
with a shovel and pick for eight years, "I told him, 'I have the land now. How
Majidu had tried to sustain his growing can I have the tall crops?'" He cracked
family on farming alone for two years, a smile standing between the emerald
but had nothing to show for it except green grasses of the upland rice field.
food to eat. The maize wouldn't grow. Majidu came to IDEA for assistance
The sunflowers hung limp. three years ago. Today the farm is 30
acres, double the original size.
"We had two children when I started
to dig the pits," Majidu says. "I have a IDEA technical assistants connected
family. I cannot sit in the house, you Majidu to stockists in his area who
know. So I worked and we started to supply WAB 165 variety upland rice
make plans for the future." seed, known for its heavy, tasty and
reproducible traits. They taught him
Majidu deposited earnings with his how to dig the furrows, how to lay a
wife—"the family bank"—and after line and plant straight, how to bank
eight years they had saved enough the land to hold rainfall, and, most
to purchase 15 acres of land. He important, IDEA taught Majidu the
planted maize the way he had done patience to trust in the 110-day grow-
for his father. But the increased area ing cycle and reassured him that this
only increased his frustration and variety of rice did not require over-
concern, especially when others watering. But Majidu remained stub-
around him seemed to have such suc- born, as he had with the maize before.
cess of late. Tired of scant quantities "I got scared," Majidu says about
and low quality, Majidu tracked down trusting the rain. "I watered too much
chaptertwo 55
Maize Price Farm Gate Ush/Kg
450
UGT start operations
400
350
300
USh per kg
250
200
150
100
50
IDEA Begins Price Crash 2001
0
January January January January January January January January January January
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
and the weeds choked the rice in hulled rice, the farm gate price
the first season because I couldn't is $32, the wholesale price is $42, and
afford the herbicide. So we sacrificed retail price is $54. And because of
the second season and it is successful the influence of the farmers associa-
now with weed control." tion, buyers come to Majidu and fel-
low members to collect the sacks of
Upland rice began as an out-grower rice. Un-hulled rice also offers valu-
scheme with IDEA, similar to able byproducts such as rice flour,
contract farming where prescribed bran and husks used for a variety
production guidelines under prede- of things like animal feed or paper
termined marketing arrangements products.
are made between producers and
buyers. One acre of upland rice will Majidu remains humble even with
fill roughly 16 100-kilo sacks with early success. He pays school fees
un-hulled, winnowed rice. Each bag for his five children, bought a few
can bring roughly $23 on the market. cows, constructed a decent house,
If a farmer mills the rice, they will and bought more land for his busi-
get an equivalent of 10 100-kilo bags ness—just the way he and his wife
per acre. For the case of milled or planned it 11 years ago.
56 chaptertwo
Ringworm, guinea worm, tapeworm, AIDS, malaria, and hunger affect thousands of
Uganda's children each year. Building local agricultural economies has beneficial effects
on health care.
The Lessons Learned especially those technologies requir-
The project lessons learned that are ing higher-cost inputs. However,
detailed in Chapter I apply to both the no-cost technologies have liter-
the low and high value components. ally changed the landscape in
However, there are other lessons learned the past nine years. With this visual
specific to low value crops. They include: proof, interest among farmers
grows by the day.
A reduced unit cost of production. For
example, reductions from 170 Producer organizations. The strongest pro-
USh/kilo to 100 USh/kilo in the case ducer organizations are those that were
of maize, makes farmers less afraid of once informal groups that came togeth-
the market and gives them the confi- er due to common business interests.
dence to take more risks.
Producer saturation is critical for real tech-
A phased approach to technology transfer. nology transfer, requiring broad geo-
This is a progressive, effective plan of graphic coverage to reach large num-
introducing farmers first to no-cost bers of farmers through field demon-
technologies such as proper spacing, strations held over multiple seasons.
then to low cost solutions such as
storing and drying cribs, then to Inputs. Access to required inputs for
higher cost technologies such as all farmers is essential; inputs must be
hybrid seeds and crop chemicals. available at the village level.
Even with no-cost technologies,
UCOPs were reduced. Access to credit. Agribusiness and com-
mercial producer support projects must
Technology adoption. Rates of technol- facilitate access to credit. Finance is not
ogy adoption in Uganda have been the biggest constraint, as farmers often
relatively low compared to Kenya state, but it is just as important as access
and Southern African countries, to inputs, technology and markets.
chaptertwo 57
The FICA processing and packaging plant was built, in part, with funds from an
IDEA grant.
The Impact - A government research organiza-
Broad impacts evolved from the low tion, NARO, that is attuned to the
value component work. The "Along private sector
the Market Chain" series illustrates the
differences created by USAID's project, - Opening minds in the public sec-
complete with taste, touch and smell. tor to the concept of farming as a
Some of those differences include: business. Low value team leader
Mark Wood once said, "It's a full
- Market awareness by smallholders time job, not a weekend hobby.
Uganda is one of the few places
- The beginnings of functioning in the world with two productive
market systems for maize, beans, seasons in a year. This combined
sesame, and upland rice that previ- with good management could
ously did not exist or were ad hoc increase profits greatly."
- The beginnings of structures and - IDEA work is emulated by
systems, including business-ori- NAADS in technology transfer,
ented producer organizations, to DANIDA who is working with
reach down to farmers agribusiness and producer organiza-
tions, the EU is supporting UGTL,
- A core of commercial producers and the Japanese aid agency is look-
in maize ing into working in upland rice
- The foundations for a stronger The Challenges Ahead
and functional private sector Commercializing small and medium
input supply system for low farmers in low value crops offers mul-
value crops tiple challenges. Some would refer to
(continued on page 60)
58 chaptertwo
Best Practices of Low Value Crop Production and Marketing
- Ensure quality product and sufficient volumes are critical for
sustainable market linkages
- To build commercial smallholders, apply a quadruple focus of tech-
nology transfer, input supply, output marketing, and financial ser-
vices support on the production base
- With smallholders, its best to initially focus on what they can do
within their own resources, starting with no-cost technologies
- Offering a phased approach to technology transfer is effective with
smallholders, starting with no-cost technologies and over time offer-
ing low-cost and higher cost technologies
- Subdivide demonstration plots to show use of and results from no-
cost and low-cost technologies
- To interest as many farmers as possible, broad small farmer expo-
sure to new and improved technologies is critical
- Ensure access to, availability of, and affordability of needed agricul-
tural inputs at the village level
- Commercial agriculture can occur in conflict zones such as Northern
Uganda by using the same project approaches but also working
through NGOs within the zones
- Train farmers in the UCOP concept and calculations
- Develop programs focused on increasing farmer income
through training and market linkages, coupled with
commercial bank engagement
chaptertwo 59
(continued from page 58)
these farmers as "the bottom of the that farmers understand UCOP and
food chain," and, in a way, they would how to calculate it as part of technical
be accurate. The small and medium assistance and training.
farmers don't have the financial
advantages, for example, of the larger Organizing farmer groups. Marketing in
commercial producers. But without groups by farmers is still highly inef-
the small and medium producers fective; there is a culture of mutual
there is no market chain and the mul- distrust among farmers and a disre-
tiplier effect of the integrated com- gard for contracts. Much work is
modity system approach would needed to form and support like-
screech to a halt. Therefore, it is minded, business-oriented groups of
important to focus on the first link of farmers to participate in bulk market-
the chain by providing support to ing efforts.
replicate successful models and
efforts, including embedded exten- Strengthening input supplies. The project
sion programs with processors and has made solid progress in strength-
expansion of the successful technolo- ening private sector input supply sys-
gy transfer, financing, and private sec- tems. However, the system is fragile
tor inputs system. Below are some and small. It needs broader national
specific needs of small and medium coverage and a wider commodity
producers on the market chain. base. The input supply network sup-
ported by IDEA is heavily dependent
Quality standards. Notions of what con- on maize.
stitute quality standards among
Ugandan farmers are far removed Accessing rural financing. The loan
from established quality requirements programs supported by IDEA are
for exports, such as EUREP GAP. not truly embedded within banking
Quality standards and buyer require- institutions, despite the successes
ments need to be built firmly into all with Centenary Rural Development
training programs. However, relevant Bank. Successes were based on the
commodity industries must be the interest and commitment of branch
ones to take the lead, as donor projects staff, some of whom paid regular
are more apt to serve as catalysts. field visits to encourage their clients
and view their investment. There is
Unit Cost of Production (UCOP). For no doubt that commercialized farm-
farmers to understand profitability, ers need access to credit to succeed.
they need to understand how to calcu- Donors must continue to work with
late their UCOP. Thus, an understand- banks to increase their comfort level
ing of UCOP across the industry is so that small and medium commer-
critical. The concept is sinking in after cial farmer lending is expanded and,
nine years as farmers have become if possible, becomes openly sup-
more commercialized. Both the private ported at the corporate and institu-
sector and donor projects can ensure tional level.
60 chaptertwo
Grain Market Crash of 2001
The maize market in 1995 was in a sorry state, with some of lowest
prices and farmer morale in memory. IDEA moved in and met project
targets. However, grain-derived rural incomes and producer confidence
were non-existent. Between 1996 and 2000, new technologies com-
bined with recovering prices gradually reinvigorated producer confi-
dence. Suppliers of rural financial services also were gaining confi-
dence. Unusual were well-distributed rains in Kenya. Although district
officials had been reporting better than average crop performance,
Kenyan national statistics until May 2001 had reported a national
deficit. Enthusiastic Ugandan farmers planted, as always, by the previ-
ous season's price. By June, the looming crisis began to come into
focus. WFP was briefed and supply pipelines were altered as much as
possible to accept the September harvest. Too little too late. WFP fund-
ing was insufficient to meet the requirement for off take. The industry
met in July under the guidance of IDEA and formed the Uganda Grain
Traders consortium, initially 14 traders. A temporary site was arranged
at the old intervention store of the Uganda Coffee Development
Authority with a capacity of 15,000 mt bagged. However, the industry
knew that unless product was removed from farmers, quality would
deteriorate to throw away levels.
UGT managed to secure a guarantee through the Export Credit
Guarantee system of the Bank of Uganda covering $2.5 million in com-
mercial bank exposure-available once a contract was signed. Zambia
was in a grain supply crisis, and UGT seized the opportunity to supply
40,000 mt out of the low price situation. This chain of events estab-
lished Uganda's potential both internally and externally and set UGT as
the terminal buyer for Ugandan grain.
chaptertwo 61
62 chapterone
With two growing seasons and one-quarter of its land arable,
Uganda holds a natural competitive advantage in agriculture
in the world.
chapterone 63
After a rocky start, the doors to Uganda's flower industry were
thrust wide open with the arrival of IDEA in 1995.
64 i hap ap one
cd e a t e r p r o a c h
CHAPTERTHREE
High Value Crop Export Development
Work under the high value component focused on identifying and supporting a
suitable private sector client base of producers, producer organizations, traders,
export associations, and exporters. The team concentrated on technical advice,
access to financing, business-plan development, and technology transfer and training
in all aspects of business, from production to post-harvest handling to marketing.
The project exceeded the life-of-project target of $45 million in high-value
exports by $19 million. This was largely due to strong performances in the flori-
culture and vanilla sectors. Early identification of the requirements and potential
growth for these two crops enabled the team to focus on all aspects of the com-
modity chain, from production through harvesting, post harvest, logistics, and
marketing. In floriculture, IDEA played a critical role in encouraging local and
foreign investors, focusing on the excellent growing conditions that Uganda
offers. The chrysanthemum-cuttings industry, for example, begun with infusions
of foreign investment, developed into a nearly $8 million business in only three
years, and continues to expand. With vanilla, the IDEA team quickly recognized
that this was an ideal crop for smallholders because it offered excellent opportu-
nities for raising rural household incomes. The increase in production coincided with
a huge increase in world prices. Vanilla exports by the end of 2003 were valued at
nearly $25 million while the IDEA life-of-project target was $2 million in exports.
Shortcomings in the high-value export sector were in fresh produce, largely
because the exports come mainly from a large number of small growers who lack
irrigation and infrastructure. The growers are widely dispersed geographically
and often lack a basic understanding of agronomic methods. Despite extensive
training efforts by the IDEA team over the life of the project, consistent increases
in volumes and quality were elusive. Traceability and strict phytosanitary require-
ments from European importers will continue to be barriers to growth in fresh pro-
duce exports. Uganda will realize significant fresh produce export growth only with
further investment from large agribusiness firms, such as those invested in Kenya.
Project-Targeted High Value Crops
- Flowers (roses, chrysanthemum cuttings)
- Fresh produce
- Cocoa
- Vanilla
- Papain
chapterthree 65
Volume and Value of Flower Exports from Uganda, 1995-2003
5,000 Cuttings 30.0
Roses
4,500 $26.53
Total Value
25.0
4,000
$21.13
3,500
20.0
Value (US$ million)
3,000
Volume (tons)
$15.90
$14.61
2,500 4,424 15.0
$14.46
2,000 3,820
$9.72 3,069
$9.84 10.0
1,500 2,594
$6.24
2,000
1,000 1,729
$3.61 1,222 1,541 5.0
874
500 721 795
$1.57
641
133 352 430
313 14 224
0 0.0
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Overall, with IDEA's help, the - Continuous support has been pro-
high-value NTAE sector showed vided to the Uganda Flower
steady growth beginning in 1995. The Exporters Association (UFEA)
most dramatic increases took place in since 1995. It now provides a
floriculture—specifically roses—and range of services to members,
vanilla. There were encouraging signs including freight consolidation
from the cocoa industry. However, and rate negotiation through
fresh produce exports and papain FHL; representation and lobby-
grew slowly. Below are major activities ing on taxation issues; technical
and achievements: research and training; and man-
agement of donor funds for flori-
- The first objective study of the culture development provided by
feasibility of a Ugandan rose the European Union and the
industry was carried out by the Netherlands. A research center
IDEA team in 1995. Conclusions was established in 1998 to identi-
were positive with some reservations. fy new rose varieties suitable for
Since then, an estimated $49 million Ugandan conditions. This was a
in new private capital has been Global Development Alliance-
invested in the floriculture industry. type joint venture with funding
Every new investor consulted IDEA from many sources including
on technical and marketing issues. Dutch rose breeders, Israeli input
66 chapterthree
suppliers, and East African pack- cent of all flower exports, 50 per-
aging companies. It is anticipated cent of fresh produce and a share
that the center will be relocated of other perishable freight.
and expanded in 2004/05 with Besides reducing the cost of
financial support from the freight to the industry by more
European Union. than $1.5 million per year, FHL
has been instrumental in improv-
- The first trials on chrysanthemum ing market-arrival quality and cre-
cuttings were carried out under ating a reputation for Uganda as a
an IDEA research grant in 1996. reliable and consistent supplier of
This has since developed into a roses and plant cuttings. Via
major commercial product with FHL, IDEA was able to facilitate
an estimated FOB value of $7.6 funding that enabled exporters to
million in 2003. finance their own air freight, so
they could consolidate tonnage
- A customized training course in and increase their bargaining
Applied Tropical Floriculture power with the airlines. This led
(ATF) was designed and initiated to a 40 percent reduction in air-
in 1997 as a public-private ven- freight costs and the availability
ture between IDEA, UFEA and of eight flights per week to vari-
Makerere University. Six annual ous European destinations.
courses have been held and a total
of 140 farm supervisors, MAAIF - IDEA helped prepare market-
technicians and university staff driven national Codes of Practice
have graduated with ATF certifi- for the NTAE sectors, beginning
cates. Makerere University started with the flower and produce
the first degree course in horticul- industries; these codes are now
ture in September 2003. finalized. Before the project
ended, the team helped draft
- A grower owned and financed codes for cocoa and vanilla, and
freight and handling company, has helped businesses implement
Fresh Handling Ltd. (FHL), was the codes and prepared them for
established in 1999 with IDEA external audits.
technical support and guidance.
This is now a profitable company - Vanilla extension workers were
that handles more than 95 per- trained in 12 districts initially in
Up to Code
A national Code of Practice protocol for floriculture was prepared with
IDEA support and all members of UFEA agreed to work towards compli-
ance. This has enabled some to achieve accreditation in 2002 under the
Dutch MPS scheme for environmental protection and safe use of chemi-
cals. Four farms are currently working towards EUREPGAP certification.
chapterthree 67
Vanilla farming favors smallholders because of the careful hand pollination necessary to
achieve maturity.
1996 and extended to 18 districts cessors meeting regularly to set
in 1998. Today, vanilla is grown harvesting dates and quality
successfully in many of the high- parameters. A local private labo-
er rainfall parts of Uganda, from ratory has been assisted to
Bundibugyo to Mbale. Through provide pre-shipment quality
technical bulletins, training, radio analysis, including vanillin and
broadcasts, and demonstration moisture content, and microbio-
plots, growers are now aware of logical screening.
the techniques necessary to pro-
duce top quality vanilla. The lead- - Individual companies have been
ing buyers from the United States provided with customized techni-
and Europe were invited to visit cal assistance on many fruits and
growers and processors who have vegetables since 1995. However,
become global supporters of the the growth in exports of fruits
planned expansion of the indus- and vegetables has been slow
try. Even more investors were compared to the rapid growth of
attracted to the industry toward floriculture and vanilla. This dis-
the project's end. By 2002, there parity is likely to remain because
were eight green-bean buyers the profit margin and returns on
with well-equipped processing investment on fresh produce are
facilities valued at more than relatively low. For example, a
$300,000, financed by private cap- gross FOB return of $20 per
ital. Vanilla was promoted by square meter of greenhouse
MAAIF and the PMA as a target space can easily be achieved with
crop for poverty alleviation. roses, while it is difficult to obtain
$5 per square meter for the high-
- With IDEA support, the Uganda est value vegetable products. This
National Vanilla Association situation is compounded by the
(UNVA) has become a national increasing traceability and quality
association with growers and pro- demands of the food market,
Hot Stuff
Uganda has achieved sustainable market penetration in Europe with
fresh chili, hot pepper, okra, various "Asian" vegetables and sun dried
fruit products. For example, since 2001 Uganda has replaced Caribbean
suppliers as the market leader in Europe for red and yellow hot pepper.
68 chapterthree
which place additional costs on project has also worked with
commercial fruit and vegetable MAAIF to support their cocoa
producers and make it difficult rehabilitation programs and fund-
for small growers to survive. Also, ed the formation of the Uganda
the considerable "sunk" cost of Cocoa Association (UCA). The
infrastructure for fresh produce UCA is significant because it
exports in other East and brought together the major cocoa
Southern African countries will buyers and growers' associations
make it difficult to justify new under one umbrella.
investment in Uganda, except for
highly specialized products such Along the Market Chain
as pre-packed chili, passion fruit, IDEA's work in high value NTAE
fresh herbs and baby vegetables, exports is examined at the household,
where some competitive advan- business, and national levels in the fol-
tage could be achieved. lowing narratives. As you follow the
people and businesses along the flori-
- Cocoa is an important alternative culture market chain, take note of
in some areas where coffee has how the integrated commodity system
been completely destroyed by impacts each link in the chain. The
wilt. IDEA has worked with approach has led to such innovations
cocoa growers and exporters to as the cold chain and significance of
make production and processing FHL, codes of practice, and the for-
improvements since 1998. The mation and structure of UFEA.
The Component by the Numbers
Value of rose, cuttings, fresh produce, vanilla, papain, and cocoa
exports: 1995: $9.5 million; 2003: $63.7 million
Number of employees in the flower industry: 2,540 in 1995; 2003:
7,000, 60 percent are women
An estimated $49 million invested in the floriculture industry
Number of fresh produce producers: 2,400 in 1995; 2003: 56 percent,
8,000 are women
Number of vanilla producers: 4,000 in 1995; 2003: 15,000, 37 percent
are women
Technology transfer/training programs in 24 districts
Number of technology transfer demonstration sites: 1995: 0; 2003: 96
Percentage of farmers trained who are women: 25 percent on average,
43 percent in 2003
Percentage of farmers adopting technology: 1996: 15 percent; 2003:
33 percent
chapterthree 69
More than 4,600 women have found work thanks to Uganda's
blooming flower industry.
At the ground level, the series exam- free time to raise their children, some
ines one particular flower producer, women are flocking to a thriving new
shows how the quasi-government Ugandan industry that mixes mother-
agencies work with handling and ing with nature: flowers.
freight companies, and describes the
lives of those changed by the flower The floriculture industry now employs
industry's success. almost 8,000 people in an area of
Entebbe that skirts the low and humid
The greenhouse worker: spots around Lake Victoria. It's an
Eight months ago, Moona's husband industry that bloomed from virtually
committed suicide after a debilitating nothing beginning around 1994. It start-
mental breakdown that ravaged the ed with a few greenhouses, investors
family of four for nearly a year. from the Netherlands, consultants from
Israel, and technical assistance and guid-
"He was not right, and he took it out ance from the IDEA project, and grew
on us," Moona says, smiling at first into a $30-million-plus export industry
and then letting her face and eyes go by the end of 2003. Since 1995, flori-
blank for a moment before reconnect- culture has attracted $49 million of
ing. "It was not good. I work now for new investment. The numbers are so
survival because I have no family or startling that they resemble budgets for
friends to help." small towns. In fact, many of the hor-
ticultural businesses in Entebbe seem
After a few moments, Moona admits like small towns, providing benefits for
that her husband's family turned her employees such as soccer fields, volley-
and the children away following her ball courts, subsidized housing, medi-
husband's death. Uganda, a patriarchal cal clinics and allowances, day care cen-
society that bestows the power in a ters for working mothers, bicycle pur-
marriage with the men and their fam- chases, soft loans, training and promo-
ily, can be a cold place to widowed and tions, employee cafeterias, three
single mothers and their children. months of maternity leave, clean
Four out of 10 children are stunted drinking water to the surrounding area,
because of malnutrition. Ringworm, and a community of support.
guinea worm, tapeworm, AIDS,
malaria-which kills more than AIDS- Women may benefit most from a
and hunger contribute to a death rate familial culture created on the flower
of 80 babies out of 1,000. Women farms. Roughly 4,800 women com-
have seven children on average, and prise more than 60 percent of the
giving birth is very dangerous. Men total work force. About 40 percent,
and even children are sometimes or 3,200, of all employees are single,
abducted by rebel armies to fight in and most of those are women. Farm
the North against the Ugandan army. salaries trickle down to support a
Life expectancy is 43 years old. network of more than 22,000 people
across the 20 flower farms in
While many women struggle to find Entebbe. And more than 90 percent
gainful employment that offers enough of employees with school-age chil-
chapterthree 71
dren send their kids to school, which you in heat and moisture. Women
contributes to Uganda doubling the buzz from flower to flower, pricking
number of children in school to 6.6 the buds and harvesting the flowers
million from 3 million in five years. and cuttings.
On a sunny afternoon at the Wagagai "Excuse," yells a man in an orange
greenhouses in Entebbe, children are jumpsuit hauling dead, drying flowers
cuddling teddy bears in their cribs at in a cart.
"The Baby House" while their moth-
ers work on the farm. Mothers stop Back outside, men haul tanks of her-
by the nursery twice a day to visit and bicides on three-wheel bicycles. Some
breastfeed their children, says manag- don gas masks before slipping into
er Juliet Ssekitoleto, a 26-year-old wife doors hung with cautionary signs: Do
and mother of one. Not Enter Spraying In Process. A
quick retreat into the next chamber,
"Usually when a mother has to work," a labyrinth of botanical beauty, and
Ssekitoleto says, "they just leave the the temperature drops to 25 degrees
baby at home for the day. Sometimes Celsius, 85 percent humidity, the
alone. Here, you can take your baby to correct conditions for poinsettia
the clinic when it is sick, feed and care plants strictly enforced by electronic
for your baby. We have baby clothes, climate control and women with
Vaseline, soap, baby powder, and it's clipboards. It is the perfect blend of
all free for employees." nature, (wo)man and machine.
Juliet Namukhula, supervisor of soil The place is Wagagai Flowers in
and peat cleansing at Wagagai for Entebbe, Uganda, and it is a well-oiled
three years, is also a 37-year-old single business machine just off the shores
mother of three who manages nearly of Lake Victoria and right on the
30 employees during the day while her crest of Uganda's emergence as an
children attend school. exporter of floriculture to Europe.
Owned by Netherlands investors,
"Yes, it is difficult because we are sep- Wagagai is one of 20 new flower
arated," Namukhula says of her mar- farms to crop up just south of
riage. "But I have friends here. I don't Kampala since 1995. Together, all 20
worry about my children because we businesses accounted for more than
are safe when I work here." $26 million in roses and plant cuttings
exports in 2003. Working mainly in
The greenhouse owner: sweetheart roses, chrysanthemum cut-
Looking through the plastic sheeting tings and a few potted plants, Wagagai
of a greenhouse, blue and orange fig- employs more than 900 under partner
ures glide against a sea of green. The and director Olav Boenders.
air outside is cool with a lake breeze
and ripe with rain during this season. "I tried to come here in the early
Then the greenhouse door slides 1990s, back when the first flower
open and a blast of humidity swathes farms started," Boenders says, his
72 chapterthree
Flower farm health clinics offer free treatment and medicines to employees and their
children as an incentive to join the community.
voice echoing against the freshly Sacha, Lambada, for example-which
painted walls of a new office building yield between 350 and 450 stems per
at the farm. "People started to grow square meter. "But now the sweet-
tea hybrids, big rose varieties, copying heart market is oversupplied with low
Kenya's every move. But the manage- quality, forcing the market down to an
ment was all wrong because Uganda uncompetitive price. So, it's time to
has a very unique, specific climate. So move on again into intermediates and
the whole thing failed." hydroponics technology."
Boenders is a Dutchman with experi- From humble beginnings to a busi-
ence in the Kenyan floriculture mar- ness leader firing off market informa-
ket who committed himself to tion like a stock ticker: "We need
Wagagai and Uganda's efforts in something a little bigger, with a high-
1999 without even a salary to entice er average price, a higher yield, a high-
him. The IDEA project provided a er production rose," he says, pointing
grant to cover Boenders' salary and to a prim vase of full, yellow roses.
supplied additional technical assis-
tance to the farm during that year. The flexible, open system says enough
Boenders and his staff worked out of about the success of floriculture in
rusty steel shipping containers. No Uganda, Boenders points out. In
phones. No fancy desks, chairs or Kenya, for example, the business is
computers. Just flowers. every greenhouse for itself. On the
other hand, Uganda growers attend
"Slowly they got into sweethearts as the same applied tropical floricultural
more knowledgeable staff came in for courses, work with the same handling
a more specialized flower," he contin- company, are protected under the
ues. In Uganda, the hot, humid and same umbrella association, and share
minimal diurnal variation climate knowledge regularly in site visits and
favors the sweetheart roses—Rodeo, study groups.
chapterthree 73
Many greenhouse workers, supervisors especially, benefit from the
Applied Tropical Floriculture courses structured through IDEA.
Environmental awareness is a main pillar of that education.
More important, consolidation of the investment, training, and capacity and
growers led to selling directly to facility building were the hallmarks of
European supermarkets, quality Phase I for flowers—the house. But
self-regulation in 2000 that floriculture still suffered an image
met 2002 EUREPGAP standards, problem in early 2000. So, for the vul-
increasing their foothold as a force nerable, bruised and battered flower
to be reckoned with, and reduced growers, building market strength
airfreight costs by 10 to 12 percent and reputation—the roof—was the
immediately. force driving floriculture in Phase II.
The structure built to protect the
"It all would have collapsed without individual flower growers was UFEA,
the support of IDEA," Boenders says or the Uganda Flowers Exporters
sincerely. "Having the right people Association. Originally founded in
who are seriously dedicated and inter- 1995 among two large flower produc-
ested, a proper team, is the key. They ers, UFEA convinced other businesses
always put money in the right spots, to join ranks over the years and now
listened to the industry and didn't go stands 20 members strong. In fact, it's
spending money on nonsense. They the only show in town.
targeted funds on TA for individual
farms, set up breeders with individual The unity created by the umbrella
farms, and focused on hardware." exporters association allowed donors
to focus technical assistance on the
Hardware includes the Fresh Handling industry at large, rather than individu-
Limited cold-store facility at Entebbe al growers. And UFEA could ensure
airport, which could use an expansion donors that funding would not be
to double its capacity for the good of duplicated. For example, when the
the flower association, Boenders says. GDA, the growers, USAID, Israeli
The current price wars with sweethe input suppliers and East African pack-
art roses could bury a small-time aging companies decided to fund the
exporter like Uganda, he warns, unless first Research and Training Center for
the donors focus TA to improve cur- flower and horticultural experts in
rent businesses, production and quality 1997, donors were quite sure that TA
of hardware. would be targeted and specific to
issues of Ugandan growers. In other
"Sure, it looks like a success story words, when donors talk about the
now. But it's no time to rest or it's R&D Center, everybody knows where
going to be a real difficult time." it is and what it does.
The flower association: Such transparency and focus, along
The second phase of IDEA took the with the country's growing market rep-
foundation established in Phase I and utation, have attracted donors beyond
built solid structures around them to the life of IDEA. The Netherlands is
protect that groundwork from the ele- financing UFEA executive director
ments. Like putting a roof on a house. Keith Henderson's salary. The EU is
Research, contacts, market linkages, considering funding the flower indus-
chapterthree 75
try and helping to build a new training market. Never mind that the GOU
school on Entebbe Road. The flower didn't provide phytosanitary accredi-
growers themselves, with growing tation at the time. But UFEA, the
financial security provided first with growers, stepped up. Today, growers
donor support, contribute $4,000 per are working toward achieving prop-
grower per year in dues to support er Dutch MPS and EUREPGAP
their efforts. And the IDEA project certification on their own.
itself is leaving its own legacies in
areas like higher education, where At first glance it is simple to see
Makerere University commenced a UFEA as simply handling the follow-
horticulture studies degree program ing grower concerns: freight consoli-
in September 2003 based largely on dation and rate negotiation through
the model of applied tropical flori- FHL; representation and lobbying on
cultural courses begun by IDEA, taxation issues; technical research
UFEA and MU in 1997. Those and training; management of donor
courses certified more than 140 funds for floriculture development
graduates, including professors now provided by U.S., EU and Netherlands
teaching courses at MU that will governments; and reviews of the
train thousands to come. Uganda floriculture industry. But
these categories say nothing about the
Some will say that "Uganda was just hard numbers—$30 million in export-
ready for the success." But they ed roses and cuttings in 2003 and a
would be ignoring the years of new Dutch market for chrysanthe-
failed flower research, trial rose vari- mum cuttings—or what is required
eties stretched out over six years, for the future.
technical advisers running here and
there, bad advice, bankrupt farms, Encouraging more Ugandan-owned
broken deals with European buyers, businesses through tax breaks and
and the total lack of standards that lower interest rates is the future.
clouded most of the 1990s in Phasing out harmful chemicals like
Uganda flowers. International flow- methyl bromide to comply with the
er market studies, like the one con- Montreal Protocol signed by Uganda
ducted for the European rose mar- is the future. Doubling the size of the
ket through IDEA, opened possibil- industry over five years and moving to
ities to growers and donors alike, areas beyond Entebbe—perhaps the
with $49 million in new investment highlands—is the future. Attracting
coming into Uganda's flower sector investment through export processing
since 1995. zones is the future. Hydroponics tech-
nology for every grower, introduction
Self-regulation came because the mar- of intermediate-sized rose varieties
ket demanded a Code of Practice that to keep abreast of the market, refrig-
affected everything from the cold erated trucks to facilitate expansion
chain to worker health and safety. The and "maintain the cold chain," and
ultimatum was set: meet or beat the ending duties on inputs-all these
EUREPGAP standards, or lose the essentials represent the future of
76 chapterthree
With increased demand in the European markets for Ugandan flowers, the FHL facility
has reached capacity and hopes to expand with donor assistance.
Uganda's floriculture industry through employed with Das Air Cargo during
the eyes of UFEA. the time that Uganda's horticulture
industry was developing. USAID has
The handling company and provided a three-month salary to
outside agencies: Stone to tap into his insight as a cargo
In the Ugandan flower industry dur- manager. Das Air has handled perish-
ing the past nine years, few phrases able agriculture products from
were repeated as often as, "Maintain Uganda since the late 90s, and they
the cold chain." Flower growers heard are one of two companies with whom
it in their dreams. Donors may have FHL deals for airfreight from
developed cramped fingers from writ- Entebbe to Holland. Stone remem-
ing and rewriting the comment. Cargo bers more than one instance when
handlers could only shrug their shoul- Ugandan flowers and cuttings were
ders from lack of proper equipment. refused by buyers in Holland because
And buyers would utter the phrase in of poor quality and other occasions
contempt when Ugandan flowers when exporters would get hit with
arrived at auctions. dead freight penalties.
"I remember walking the tarmac at The chairman of the board of FHL
Entebbe, just even in the late 90s, and and a Uganda flower grower him-
seeing the damned things just sitting self, Olav Boenders goes even one
there in the sun, wilting to nothing," step further, saying that "handling
says Clive Drew, managing director of was zero."
the IDEA project from February
1995 through November 30, 2003. "So we brought the growers together
with standards," he says, "and we
Graham Stone, new executive director bought an auction block in Europe.
of Fresh Handling Limited, was Just three years ago everyone was
chapterthree 77
Some flower farms still lack the funds to buy or lease refrigeration trucks.
shipping individually, dumping their IDEA horticulture specialists, like
flowers on the tarmac to rot in the Steve New and Steve Humphreys.
sun. IDEA helped us take over and New and Humphreys are the men
we had immediate improvement and who many industry leaders credit with
got reduction in freight costs of about making flowers work in Uganda,
30 to 40 percent door to door." pointing to the more than 4,600 tons
of roses and chrysanthemum cuttings
The first step to healing Uganda's exported in 2003 as proof. They
bruised image in the world floricul- helped organize 20 flower growers
ture market centered on maintaining into a powerful association, estab-
the cold chain, from the time cut lished grades and standards and held
flowers and cuttings leave the green- everyone accountable for enforcing
houses to the time they enter the them, gave startup advice, developed
cargo plane, after which time they a statistical tracking system imple-
may not see an end-user's vase for mented by CAA staff, provided
four to five days. That is where a little hands-on technical assistance with
used, badly designed cold store built trial shipments, market information
by USAID in 1997 just a stone's and contacts, negotiated and juggled
throw from Entebbe Airport became for freight costs, and delivered the
the missing link to Uganda's success cold store in 1999. IDEA grants pro-
and proved USAID's foresight again. vided purchasing power for compres-
sors, pallet dollies and covers, pre-
Built by USAID to be owned and cooling fans, and approval of the gen-
operated by Uganda's Civilian Aviation eral manager's salary.
Authority, a quasi-government entity
that owns the airport, the cold store Today, FHL is a grower owned and
became the focus of renewed effort to financed freight and handling compa-
consolidate and strengthen floricul- ny that handles rate negotiation for
ture around technical assistance from its partners. It employs 32 full-time
78 chapterthree
workers and nearly 150 in all, con- land, and is already stretched for
trols 95 percent of all flower exports, funding by fledgling flower farmers.
50 percent of fresh produce, and a
share of other perishables. Most In the meantime, Stone is pushing
important, FHL creates a marketable for reforms such as cheaper jet fuel
quality product and maintains consis- for airlines, tax credits on fuel for
tency in floriculture, accounting for refrigerated trucks so the industry
Uganda's emergence as a small, reli- can expand beyond Entebbe, and
able competitor in European mar- asking each farm to use refrigerated
kets. Direct flights of Ugandan flow- trucks for the good of the group.
ers to Europe now arrive at tempera-
tures competitive with those of other "Some of the trucks coming through
regional suppliers, including Kenya, without refrigeration are costing a few
Zimbabwe and Zambia. However, degrees here and there because they
the building is not big and is made heat the other flowers on the pallets.
even smaller by the fact that about 60 It's not fair to some farm that pays for
percent of space is used for offices the refrigeration to get stocked with a
and loading docks. The refrigeration farm that comes in warm."
rooms hold about 55 tons of prod-
uct, or 16 pallets, which accounts for Supporting Vanilla: From Start
only half the space on cargo planes. to Finish
And for the flower industry to con- From zero production, Uganda
tinue its growth strategy, says became the world's third largest pro-
Graham Stone, the facility will have ducer of vanilla in just eight years,
to double its capacity. But FHL is at with the potential to become not
the mercy of CAA, which owns the only a leading world exporter but a
Uganda Vanilla Web Site Brings In New Buyer
IDEA was at the forefront of promoting Uganda vanilla, an alternative
crop for growers hit by coffee wilt. Considered to produce vanilla of
comparable quality to Madagascar, Uganda has an excellent opportuni-
ty to take a large share of the potential $400 million world market. IDEA
promotes Ugandan vanilla internationally through the Web site,
www.ugandavanilla.com. Initially imported by only one U.S. firm,
McCormick, the number of international importers buying Ugandan
vanilla has increased dramatically. One of the buyers attracted by the
Web site was Shanks Extracts Inc. from Pennsylvania. With assistance
from IDEA, Shanks was introduced to local vanilla exporters. In 2001,
prices increased from $70 to $140 per kilo; a kilo of cured vanilla today
can cost $500. During 2001, Shank's bought 11 tons (one-sixth of the
Ugandan crop) at an average price of $100 per kilo, resulting in $1.1
million in exports. The relationship has continued to get stronger by the
year. However, market conditions may change.
chapterthree 79
Volume and Value of Vanilla Exports from Uganda, 1995-2003
140 30.0
120
120
25.0
Volume
$24.90
Value
100
20.0
Million Dollars
Metric tons
80 75
66
15.0
60
60
42 10.0
$9.43
40 $6.59
30
25
$2.02 5.0
20 15 $1.86
$0.75
$0.64
.02 $0.48
$0.01
0 0.0
1995 1996 1997 1998 1999 2000 2001 2002 2003
Source: ADC/IDEA Project
major challenger to industry giant tion of small rural households and
Madagascar in terms of quality and their communities, moving them
volume. IDEA has been a catalyst in from poverty to relative prosperity
bringing the vanilla industry to this and economic security. Some small-
point, from virtually no exports in holder households have increased
1995 to its current $25 million export their annual disposable incomes
level. Short-term prospects for from less than $3,000 per year to
Uganda's vanilla exports are expected more than $12,000 per year cultivat-
to expand three to four times their ing just one acre of land. Of the cur-
present value and volume, even with the rent sale price for cured vanilla,
decline in price that the sector faces. roughly 60 percent returns to the
smallholders who grow it.
Vanilla is unique in that it is the only
high value crop that must be pro- When IDEA began in 1995, vanilla
duced by smallholder farmers. Also, had a narrow production base in one
because of the care required during district and was only recently intro-
pollination, which takes place by duced in a second district. Technical
hand using small needles, women are know-how and market information
more engaged than men in its culti- was negligible; there was a limited
vation. The expansion of vanilla marketing system with few processors
exports has resulted in transforma- and exporters, and no effective
80 chapterthree
Proper care can increase incomes from less than $3,000 to more than $12,000 per year
cultivating just one acre of vanilla.
national vanilla export association. - initial support of the new com-
IDEA assessed the commodity chain, modity association VANEX, an
noted its many weaknesses, and focused association made up of proces-
assistance in the following areas: sors and larger exporters
- direct market information via radio Uganda now produces roughly 120
and directly with clients tons, or 5 percent of the world pro-
duction of 2,500 tons of cured vanil-
- technology transfer to smallhold- la. Its product is competitive in both
ers through field demonstrations, price and quality. The prospects for
eventually supporting a total of 50 the future are very good, particularly
demonstration sites in the short-term as Uganda rides out
the vanilla boom with prices reaching
- technical assistance to investors $500 per kilo, much higher than the
in processing historical average of $50 per kilo.
However, producers need prepare
- certification of organically-grown themselves for likely dips in prices.
vanilla for growers and exporters
Demonstrating Patience:
- facilitate financing by local banks Vanilla Farming in Uganda
to exporters to fund processing Hajji Yunus Lubwama's words seem
and training costs harsh to 30 prospective vanilla grow-
ers who came from hundreds of miles
- support to the Uganda National around Uganda to hear his lessons in
Vanilla Association (UNVA) for vanilla farming. Even in the cool
development of member services shade of a tall, old tree, the semicircle
of men and women shifts nervously,
- liaison with vanilla buyers in the uncomfortably when Hajji Yunus
United States and Europe departs from the basic lessons of
chapterthree 81
Proper care can increase incomes from less than $3,000 to more than $12,000 per year
cultivating just one acre of vanilla.
vanilla farming to offer his common vanilla picked up some notoriety in the
sense warnings. Like clockwork every 1950s by making rich men out of a pre-
15 minutes during the two-hour meet- cious few, it was known thereafter for its
ing, Hajji Yunus stops gesticulating, hit or miss success stories in Uganda.
puts his large hands over his bony That was unfortunate for the only
knees, and leans forward, staring country boasting two dry seasons
fiercely at his students. strong enough to support two vanilla
harvests in the world. Until recently.
"Do not think it is easy," he says once.
The export of Ugandan vanilla went
"It is not for the lazy," he warns later, from $8,000 and 0.2 metric tons in
the legs of his stool digging into the 1995 to nearly $25 million and 120
dirt as he leans forward. With each metric tons in 2003 thanks, in part,
lecture, the audience stops taking to IDEA-led training and assistance.
notes and collectively looks up. That means that suddenly Hajjati
Haawa's family was pulling in more
"The prices will not remain strong for- than $50 per kilo. Much of that has
ever. Many will not see the success that to do with market conditions, like
we have here." Madagascar's fall from grace due
to weather conditions. However,
Indeed, success was a lesson in hard IDEA prepared thousands for that
work and patience for the family, opening by working with the proces-
multiplied by tremendous market sors and producers to develop the
prices, says 40-year-old Hajjati Haawa crop, using tactics such as radio
Lubwama, Yunus' wife of 22 years. announcements to offer training to
peasant farmers. That model has
Beginning in 1992, after years of subsis- many convinced that vanilla is a tool
tence farming with maize, potatoes and to attack rural poverty, since pollina-
bananas, Hajjati Haawa says the family tion of the vines must take place by
decided to take a chance on the lucrative hand, a time-consuming process
but highly volatile cash crop known to that favors small-scale out-growers
many now as "green gold". Although over large commercial farms.
(continued on page 84)
82 chapterthree
The Post-Harvest Blues
For those growers who had gone to the trouble of producing a reliable
crop, there were then difficulties post harvest. In floriculture, attention
to detail in maintaining the cold chain meant many farms received criti-
cal quality reports and consequently lower prices. A series of practical
workshops through FHL and the producer associations helped alleviate
this. For vanilla and cocoa, with prices high toward the end of the pro-
ject, there was always a temptation to take short cuts on proper har-
vesting, fermenting, and drying, and great effort was put into persuad-
ing farmers and local buyers to do this work properly.
chapterthree 83
(continued from page 82)
Hajjati Haawa digs into the earth income for selling vine and tree cut-
around a shade tree and plants a vine tings. Their first harvest, however, did-
in the soil, buries it with an organic n't come until four years after initial
mixture of mulch, soil and cow dung, planting. That type of patience chases
and trains the vine around the tree's away nearly as many as it entices.
branches to hang like a lock of green
hair. The family of seven now has 600 Demonstration sites like Hajji Yunus'
vines on five acres of land, she says. have grown from 0 in 1995 to 50 in
The season always determines their 2003 over 18 districts, which also
harvest, but current conditions pro- accounts for the jump in the estimat-
duce about 300 kilos ($15,000) of ed number of vanilla producers in
vanilla in a good season and about select areas from 4,000 in 1995 to
200 kilos ($10,000) in a bad season. 15,000 in 2003. Previously, there were
And that does not include additional only two active companies buying and
Best Practices of High Value Crop Production and Marketing
- Activities that ensure quality product and sufficient volumes are crit-
ical for sustainable market linkages
- Make post-harvest handling a priority
- Focus on a few products only
- Take a step-by-step approach with clients, starting with agreed-
upon small, realistic production and export targets and, once
achieved, offer further resources
- Help industries develop and implement codes of practice
- Keep an eye on the external environment so that opportunities can
be seized (e.g. demise of sweetheart rose industry in Zimbabwe due
to the political and economic crisis there)
- Get customers on board
- As the number of export growers and traders increase and
export values grow, channel technical assistance through commodi-
ty associations
- Provide needed business, management, financial, and technical
training to local management
- With smallholders, focus initially on what they can do with their
own resources
- For vanilla and cocoa, develop programs focused on increasing
farmer income through training and market linkages, coupled with
commercial bank engagement
- Invite government extension and research staff to participate in rele-
vant training programs
- Have representatives from the private sector and donor projects sit
on government working committees
84 chapterthree
The boom in the vanilla market is not expected to last much longer, say industry experts.
The parents of these children brought in more than $15,000 in 2003 thanks to vanilla.
processing vanilla. Now there are neighborhood, really—to worship at
about 10 processors and exporters the most holy Muslim shrine, the
collected under the UNVA network, Great Mosque and Ka'aba.
which meets regularly to set harvest-
ing dates and quality parameters. To "We did not pray for anything, to get
help increase the quality in post-har- anything," Hajjati Haawa says. "But
vest and post-production of vanil- we prayed to be strong and patient.
la—a major threat to Uganda's place And things are much improved."
in the world market—UNVA and
IDEA contracted a local laboratory to The Lessons Learned
provide pre-shipment analysis includ- The overall project lessons learned in
ing vanillin and moisture content and Chapter I apply to both low and high
microbiological screening. A new value components. However, there
apex vanilla association, VANEX, are a number of other lessons learned
is now dedicated to the long-term specific to high value crop production
growth of the industry and stakehold- and marketing that we emphasize.
ers, offering such outreach as security They include:
awareness for growers to prevent theft.
Hajji Yunus warns his audience that Production is key. A focus by all market
vanilla is as good as money these days, chain actors on production efficiency,
and men with guns may come to take rather than marketing, is critical. The
that money. The family's new home markets are there; the real problem is
stands tall and strong behind him consistent, year-round production of
as proof of the income potential. high quality products, a requirement
Inside the home are pictures of for exporting to Europe.
Mecca, Saudi Arabia, where the cou-
ple traveled recently in their first Moving clients into success. Initially IDEA
trip out of Uganda—out of the staff divided time equally between
chapterthree 85
More than 20 flower farms skirt the area around Lake Victoria in Entebbe, Uganda.
UFEA, the grower association, hopes to expand business beyond such narrow confines.
clients and products, typically provid- Narrow down the products. Within the
ing start-up advice; inputs to busi- general product categories originally
ness plans and feasibility studies; assigned to IDEA, there were more
market information and contacts; than 50 potential crops. The team
and hands-on technical assistance screened these for market value, bear-
with trial commercial shipments. As ing in mind that Uganda is a land-
successful clients became profitable, locked country with high transport
products with the most potential costs, market size, and production
became evident, and the number of potential. After the first two years, the
clients increased, it became necessary team began to focus exclusively on a
and cost-effective to focus more on small, manageable target group of
strategic constraints such as research products: floriculture and fresh pro-
and training. duce for investors, and vanilla and
The Public Sector, Markets, and Comparative Advantage
Vanilla and flowers have been Uganda's most successful high value
export products and perhaps the only products that involve "modern"
agricultural processes and "added value" as promoted by the PMA. Yet,
until 2002, both were purely private sector efforts with no government
support. By comparison, the fresh fruit and vegetable export sector, for
which there are limited comparative advantages, receives more public
sector attention and greater resource allocation. IDEA worked closely
with the PMA Secretariat and GOU to provide as much information
as possible, but management issues, analysis, and dissemination of
relevant commercial information, including national statistics, is still
a constraint.
86 chapterthree
cocoa for smallholders. This approach are less demanding on traceability and
ensured results in foreign exchange exact conformation regarding product
earnings, new employment, and specification. Exporters were also
increased rural incomes. advised to organize growers into groups
to stagger production from one area to
Post-harvest. There was a consistent another so that production peaks and
lack of attention to post-harvest han- dips could be leveled out over the year.
dling in all sectors over the life of the These issues present continuing prob-
project. Training, technology transfer, lems for Uganda and any producer
and technical assistance programs had country that relies on rain-fed small-
to focus on this area. holder production while trying to meet
increasingly tough traceability standards.
Training local management is vital to the
long-term future of the high-value, Continued support for associations.
non-traditional agricultural export Commodity associations are critical to
industries. Initially there was reliance building strong industries. However,
on expatriate staff to kick start many truly self-sustaining organizations take
projects, but Ugandan owners and time and funding to grow. Most in
managers have proven their ability to Uganda are still donor-dependent.
manage their businesses. A continuing Despite this, support is critical so that
lack of middle managers and techni- they can play their role in regulating
cians plagues the expanding floricul- the industry, coordinating buyers and
ture and vanilla industries. sellers, promoting products externally,
and advocating for industry.
Building capacity among vanilla and
cocoa producer associations is impor- "Customer as king". IDEA always
tant. If associations are managed regarded the "customer as king".
properly, they serve as a conduit for When the project began, no potential
information and services down to the buyers wanted to come to Uganda.
smallest growers. But the sectors must However, within two years the project
have sufficient critical mass—aggre- had generated a stream of flower,
gate export value—to attain sustain- fresh produce, and vanilla buyers who
ability; otherwise their associations have continued to be great supporters
remain dependent on donors. of Uganda in the European and
American markets. They provide
Importance of large commercial farms and irri- invaluable first-hand information on
gation. Building the fresh produce indus- market trends, intelligence on what
try is constrained by the lack of large the competition is doing, and ideas on
commercial farms and irrigation. The which crops and products to try next.
situation does not allow for EU super-
market supply contracts and a consis- Specialized capacity building in the gov-
tent year-long produce supply. Because ernment, particularly those dealing
of this, most exporters were advised to with plant health and pesticide con-
continue dealing with the European trol boards, will strengthen NTAE
wholesale import market buyers who industries.
chapterthree 87
The cuttings industry is growing by the year thanks to Dutch businessman who see a
strong partnership with Uganda.
Adding value at the source is a must. and commercial on-farm research
While production in Africa offers efforts. IDEA then tried the log-
both the climatic advantages of pro- ical solution of combining the two
ducing off-season crops for Europe approaches and it became even more
and elsewhere, the other advantage is difficult. In practice, the IDEA team
lower labor costs. Whatever can be had to do the research themselves,
done to grade, prepare, or pre-pack which proved to be very time-con-
in the country of origin benefits suming. Although funding on-farm
Ugandans. research can be extremely effective, it
is probably best to monitor results
Dedicated research is hard to find. IDEA purely in terms of commercial sales
staff found it best to avoid formal that follow from adaptation of the
research projects after trying to man- research. Alternatively, a dedicated
age both public sector research teams research team must be funded, as in
What is FOB?
FOB means Free On Board, which in the case of high value perishables
is the equivalent of its export value. The FOB figures are the value of
the product plus FHL charges and any other loading charges on the
plane. IDEA calculated FOB in the following way:
- Selling price in Europe
- Less Europe selling commissions
- Less Europe preparation and agency fees
- Less any transit charges in Europe
- Less airfreight charges
- Less insurance
- Equals FOB value
88 chapterthree
the case of the successful UFEA Europe. However, cold storage
research center. But this is expensive needs have outgrown FHL's origi-
and difficult to sustain. nal cold storage capacity.
Use private labs. Using government- - In floriculture, IDEA played a
accredited private laboratories for soil critical role in encouraging local
samples and other testing for high and foreign investors by broad-
value crops is the right choice. Private casting Uganda's excellent grow-
laboratories offer better equipment, ing conditions. IDEA support of
more timely services, and fewer con- investment in the chrysanthemum
cerns about corruption. cuttings industry led to nearly $8
million in export earnings in just
The Impact three years, and that market con-
IDEA's design made it possible for the tinues to expand.
project to work directly with private sec-
tor clients. IDEA could not have - IDEA support of the floriculture
achieved the same results if it had been research and development center
working through a government ministry at Nsimbe allowed rose growers
such as MAAIF or a government agen- to select more suitable export
cy such as the PMA Secretariat or varieties, competing more effec-
NAADS or UEPB. This focus on the tively with Zimbabwe and increas-
private sector sometimes caused prob- ing rose exporters' profitability.
lems in relationships with official agen-
cies, but these were sorted out in amica- - Uganda has greatly improved its
ble and constructive ways. A variety of image in the flower and vanilla sec-
impacts evolved from the direct high tors; however, the image of the
value component work, including: fresh produce export industry
remains clouded. Because strict
- Improvements in the cold chain quality controls are not legally
for flowers and fresh produce— enforced, some exporters are ship-
from the greenhouse and field ping sub-standard products. Others
to European destinations—have are opportunistic, only interested in
strengthened the entire industry, short-term gain, and unwilling
leading to higher quality flowers to commit to long-term relation-
and higher prices for flower ships with overseas buyers. A
exporters. It has also increased few unscrupulous exporters can
Uganda's image in the floriculture give the whole country a bad name.
sector, as well as its foreign
exchange earnings. - The FOB (free on board) value of
floriculture exports is on course
- Air freight constraints were alleviat- to exceed $30 million in 2004.
ed by IDEA's efforts to help Current market trends for
establish FHL, which lowered small/medium roses and selected
air-freight costs for exporters and plant cuttings for which Uganda
increased capacity and flights to has competitive advantage sug-
chapterthree 89
gest that the industry could dou- Faculty of Agriculture offered the
ble over the next five years. The Student Internship Program starting
FOB value of vanilla exports is in 1996. The program increased the
likely to decline in 2004 due to number of highly skilled profession-
Madagascar's resurgence and als in the NTAE sector by taking
regeneration. But current market advantage of the intellectual capital
and production trends suggest among entrepreneurs through their
that the industry could still dou- practical interaction with students.
ble over the next five years. And Acceptance into the program was
the FOB value of cocoa exports competitive. Opportunities were
is on course to exceed $5 million available to full-time students and to
in 2004. Current market and pro- interested members of the industry
duction trends suggest that the who lacked college educations.
industry could double over the Students worked alongside faculty
next 10 to 20 years. FOB value of advisors to outline their specific
fruit and vegetable exports course of study. If accepted, the
exceeded $5 million in 2003. The highly qualified final-year students
industry could continue to were given supervised, hands-on
expand over the next five years if experiences in agribusiness that
new investment takes place in irri- matched the student's career goals.
gation, post-harvest handling, Periodic progress reports document-
and EUREPGAP compliance. ing the student's advances were
required by the academic depart-
IDEA Agribusiness Interns: ment, and faculty members would
Where are they now? make periodic site visits to observe
In collaboration with USAID, the the student's progress. By the intern-
ADC and Makerere University ship's end, the student, faculty mem-
What Constraints?
All was not rosy for IDEA. The project faced and addressed in creative
ways a number of major, ongoing constraints over the life of the pro-
ject. The work must continue, and all high value export sector actors
must continue to tackle these issues:
- Lack of capital and pre-existing agribusiness investors
- Poor understanding of markets and comparative advantage
- Inherent disadvantages in fruit and vegetable production
- Few large commercial farms or irrigated farms
- No systems for collection and analysis of export statistics
- No effective commercially-oriented research institutions
- Lack of technicians and middle managers
- Local clients with overly ambitious expectations
- Lack of attention to post-harvest handling
90 chapterthree
A former ATF trainee, Okello Robert Cyrus Ongom says, "I have a world view of the flori-
culture industry."
ber and employer participated in one passed since those first interns entered
final evaluation to help round out the the private sector in 1997. As part of
participant's performance. Other the project closeout, we have inter-
participants were sponsored by flow- viewed two trainees/interns for USAID
er farms as current employees who to answer the question, "Where are they
desired more training and an oppor- now?" and to get a more candid assess-
tunity for higher education in the ment of the impact and sustainability of
ATF course. This latter vocational the trainee/intern effort.
and professional training effort
helped to increase indigenous man- Kizito Spelius, 39 years old, Kasangati,
agement-level staff at the farms. Wakiso district, ATF trainee during 2000:
Besides the benefits of bringing togeth- "I learned how to live a hard life," says
er the NTAE private sector firms and Kizito Spelius, a production manager
the academic community, students also with Fiduga Ltd.
reaped direct benefits when many were
hired by their host firms. Years have Before life got hard, Spelius was a
Floriculture Opportunities to Explore
Now that Uganda is getting a name for itself as a floriculture producer
specializing in sweetheart roses and chrysanthemum cuttings, the time
is right to look into diversification. It is always going to be difficult to pro-
duce summer flowers in Uganda due to heavy rainfall, but other flowers
such as asters, limonium, and hypericum would be worth looking at, as
well as tropical flowers such as anthuriums under shade netting.
Additionally, trying to attract more cutting business to set up vertically
integrated businesses and supporting hydroponics systems have merit.
chapterthree 91
Cargo companies, like Das Air, see export constraints in Uganda because of high jet fuel
prices and limited schedules of departure.
child who wanted nothing more than but something better came along at
to help his peasant farming parents Fiduga as the Uganda flower industry
work their small parcel of land. They barnstormed Entebbe, and the man
always paid his school fees and moved on, hoping to further his edu-
stressed the importance of educa- cation and gain a managerial position.
tion. Then his parents were killed in
an automobile accident, forcing him Soon after, the IDEA project extended
and his seven siblings to split among opportunities to study under the
family. He still fought for his educa- ATF course conducted by Makerere
tion—to better himself and honor University, IDEA and UFEA, and
his parents—wanting to go to Spelius jumped at the chance. The crop
Makerere University but settling for management course increased his pro-
Ssese Farm College instead. College duction skills with irrigation and fertil-
helped Spelius land a managerial posi- ization instruction, offered manage-
tion dealing with fruits on a local farm, ment training and strengthened his
The Missing Middle
The floriculture and vanilla industries face major problems in the recruit-
ment of middle managers. During the last year of IDEA there was a mas-
sive demand from the flower industry for IDEA to provide training in super-
visory skills to staff who had been promoted from the production line. In
the vanilla industry, it is extremely difficult for processors to find staff to
manage the large number of out-growers who produce green vanilla, in
order to ensure quality and financial accountability. This is understandable
for such fast-growing industries, but it is also a constraint that needs
urgent attention from new projects in the NTAE sub-sectors.
92 chapterthree
administrative skills, all within the his sights on horticulture, taking
familiar Fiduga greenhouses, help- training courses offered by flower
ing Spelius establish more credibility farms and doing some agricultural
among his employers and colleagues. consultancy with his new knowl-
edge. One of the farms that trained
"I became a resource person after this Ongom was Wagagai. He says that
training," he says during a recent inter- the company must have paid atten-
view. "I went to represent the director tion to his desire to learn and excel
at some functions. I also got involved because they offered to host his train-
in promoting the internship's pro- ing through IDEA.
grams on the farm."
Seven years later the Ugandan flower
And there were trips to Costa Rica, industry is a $30 million export suc-
Holland and Kenya—the latter two cess. The number of flower farms has
sponsored by USAID and other blossomed from two or three in the
donors—to further improve his aware- early 1990s to 20 businesses operat-
ness of environmentally sensitive ing under one umbrella association
materials, flower handling during today. And after all this growth
export, and new technologies. It's been and change in the industry, Ongom
a whirlwind of positive experiences is still with Wagagai, working exclu-
since completing his ATF course. sively for their chrysanthemum divi-
Fiduga promoted Spelius upon com- sion as a production manager. His
pletion of the course. duties have expanded over the years
to include responsibility for seven
"Really, without IDEA's sponsorship, greenhouses and their electrical
which opened the door to the flower installations, climate control systems,
industry for me, I wouldn't be who I and pest and disease control. It is a
am today and I am very grateful." lot to handle, and he is grateful for
the chance to fulfill his ambitions.
Okello Robert Cyrus Ongom, 26 years old,
Nkumba, Entebbe Wakiso district, ATF "The ATF training gave me confidence
trainee during 1997: and taught me anything is possible.
Especially in horticulture. I have a world-
He was always a go-getter, one of wide view of the floriculture industry."
those young men who never gave up
and excelled at academics. But at 19 The Challenges Ahead
years old, Okello Robert Cyrus During the last nine years, IDEA
Ongom lacked the confidence and has helped lay the foundation for
experience to enter the Uganda these high value agricultural export
floriculture industry on his terms. industries. Given the non-traditional
He had watched the industry grow nature of the crops and complex
quickly, and his father, a govern- requirements, all was not easy. The
ment worker, advised his son that learning curve for Ugandan producers
the future of Uganda agriculture and exporters was steep. What's next?
was there, in flowers. So the boy set It's clear that production must be
chapterthree 93
expanded for a few reasons: to reach a - Production efficiency over marketing. A
critical mass so the businesses and focus by all market chain actors
industries can be competitive; so on production efficiency is criti-
Uganda can be recognized as a suppli- cal. Programs offered by donors,
er to international buyers; and so processors, buyers, and exporters
industries can support themselves and that help producers achieve con-
their respective associations without sistent, high quality products
donor support. Additionally, new should be a priority. Special
opportunities must be identified and attention to post-harvest han-
products diversified. While IDEA has dling and cold chain management
shown that several high-value sectors are needed.
are viable and gains can still be made
from the expansion of existing firms, - Integrate cluster approach in future pro-
Uganda needs fresh investors—espe- gramming. Promoting an industry
cially foreign direct investors with deep cluster approach should be part
pockets—proper facilities, and strong of the design of new donor-
management. There are roles for funded agribusiness and non-
donors, the private sector, and govern- traditional agricultural export
ment. Here are some of the needs: projects. If there are weak links
anywhere along the commodity
- Donors must continue to target the pri- chain-for example, lack of access
vate sector. Programs that have to inputs, cold storage facilities,
worked directly in a focused way or reliable airfreight-industry busi-
with agribusinesses, like IDEA, nesses will not and can not func-
have obtained good results. Local tion properly.
capacity-building is needed in
the private sector—from business - Donors open doors to finance.
skills to technology transfer. Access to finance is critical for
It's All in the Numbers II
The only reliable high value export statistics were those reported by
IDEA. Because data collected at the airport and border points is incom-
plete and not accurately recorded by product, IDEA was forced to make
estimates based on primary data obtained from various sources. Volumes
were calculated from production and export statistics collected from the
Civil Aviation Authority, MAAIF, Uganda Revenue Authority, FHL, airlines,
commodity associations, and individual clients and traders. They were
then converted into values using average prices provided by exporters
and importers, official statistics, trade journals, and on-line databases.
Since no single source gave a complete or accurate picture of export
volume and value, the figures were cross-checked and adjusted to give
conservative average estimates. Finally, exchange rate, marketing, and
freight cost adjustments also have to be made to get to final FOB values.
94 chapterthree
high value NTAEs and donors can of inadequate funding for govern-
help with soft loans from interna- ment inspector services in issuing
tional institutions for equipment. phytosanitary certificates and
Low interest rates, grace periods registering new agrochemicals.
on repayment of capital, and tax Greater efficiency and streamlined
incentives from government are all procedures will help Uganda com-
things that donors can support to pete more effectively. Donors
stimulate expanded high value could work with MAAIF and
exports in Uganda. Uganda National Bureau of
Standards on establishing a com-
- Strengthen the associations. Despite petent quality inspectorate. This in
the ability of commodity associa- tandem with implementation of
tions to be somewhat self-financ- industries' own codes of practice
ing, they need additional support will help exports grow. Training is
via targeted, time-bound assis- needed within the government
tance. Current needs include and within industry businesses.
UFEA and the establishment of
a floriculture training school; - Continue and strengthen high-value
UNVA's extension and training crop courses such as the Applied
activities; and the efforts of Tropical Floriculture course sup-
VANEX, the new association of ported by IDEA. Building capac-
vanilla curers and larger exporters, ity in the industry helps create a
to be an industry voice, attract pool of local talent and manage-
buyers, establish codes of practice, ment from which new projects
and disseminate information on and businesses can draw experi-
Uganda's crop and world trade. enced professional staff.
- Competent government inspection.There - For vanilla sector growth, building
are still constraints growing out capacity among vanilla producer associ-
chapterthree 95
ations, along with concentrating on Namoboa says, "The kind of
expansion and quality control to statistics on flowers and fresh
keep buyers supplied and happy, is produce include the number of
critical for donors and NAADS. stems, volumes accounted for,
fresh produce types and volumes,
- Strengthening the domestic market for exporter and importer compa-
fresh produce. Constraints abound nies, and destination. Generally, it
on fruit and vegetable production has improved logistical planning
and exports; however, a few with airlines to consolidate prod-
niche-market specialty products ucts and give volume forecasts.
should be pursued. In addition, It's improved our practices for
donors and others should consid- tracking other exports, like fish."
er strengthening the domestic
market for fresh produce before - Support demand-driven strategy for
concentrating much more on public sector research. Uganda has
exports. A focus should be on able researchers but no effective
raising standards of post-harvest institutions to conduct commer-
handling. All over Uganda, pro- cially relevant research. IDEA
duce is poorly handled, badly pre- made various attempts to use the
sented, and wilting in the blazing scientific design and reporting
sunshine on dusty roadsides. skills of research personnel from
NARO and Makerere University,
- Facilitate collection and analysis of in combination with the drive
export statistics. There are no estab- and management skills of private
lished systems for collection and farms, but with limited success.
analysis of export statistics. This barrier cannot be removed
Donors might consider working until a system is developed for
with MAAIF, Uganda Bureau of equipping and rewarding public
Statistics and Uganda Export sector researchers for commer-
Promotion Board to strengthen cial success. NARO is developing
export statistics, data collection, a new demand-driven strategy to
analysis, and dissemination capac- guide its research activities in the
ity. IDEA helped the CAA devel- future, which may improve the
op such a system. CAA acting- situation. Donors and businesses
marketing manager Moses should advocate this approach.
chapterthree 97
Uganda IDEA Final Report Annex
The inside back cover of this Uganda IDEA final report contains a CD-ROM
of annex material. The information contained in the Uganda IDEA Final Report
Annex provides a history of the IDEA project through tabular and statistical
data, as well as necessary accounting information. An index of the material con-
tained on the CD-ROM follows.
Grants
IDEA Grant Funding Tracker
Phase II Grants Benchmarks
Phase II Grants NARO Benchmarks
LOE
Phase I LOE for ADC Professionals
Phase II LOE for ADC Professionals
M&E Summaries
ATAIN Performance Progression
Comparison Phase I Targets
Comparison Phase II Targets
IDEA Export Charts and Graphs
IDEA Export Charts and Graphs 2
IDEA Project Status Analysis
Results Framework for HV
Results Framework for LV
Results Framework for Project
STTA (short-term technical assistance)
STTA 1995 to 1996
STTA 1996 to 1997
STTA 1998
STTA 1999 to 2000
STTA 2000
STTA 2001
STTA 2002
STTA 2003
98 annex
Credits
On the cover
Majidu, a farmer in Uganda’s Bugiri district, received technical assistance
through USAID’s IDEA project that increased his income and property.
His daughter is on the back cover.
All photographs: Matt Herrick
Design: Jane deBruijn
“If we sought the kingdom of trade first, the rest would follow.”
-Yoweri Kaguta Museveni, President of the Republic of Uganda, April 3, 2004
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