In 2024, Uganda’s coffee sector was a battleground of high coffee prices and political strife, particularly surrounding the Uganda Coffee Development Authority (UCDA). While farmers rejoiced at the promise of increased revenues, the controversial UCDA takeover and ensuing parliamentary disputes, coupled with international trade compliance challenges, cast a shadow over the industry’s future.
High Coffee Prices: A Boon for Farmers
This year, coffee prices soared, bringing substantial benefits to Ugandan farmers. The nation’s reputation for high-quality Arabica and Robusta beans maintained strong global demand despite climate disruptions and supply chain issues affecting other coffee producers. Coffee exports reached unprecedented levels, cementing the sector’s role as one of Uganda’s top foreign exchange earners.
The price surge translated into a 20% increase in earnings for many farmers, according to industry reports. This financial boost enabled farmers to reinvest in their operations, improve yields, and meet the growing demand for Ugandan coffee. However, the sector continued to grapple with rising production costs, including fertilizers and fuel, which squeezed profit margins. Climate change also posed a significant threat, with prolonged droughts and erratic weather patterns jeopardizing long-term sustainability. Despite these challenges, 2024 was largely seen as a year of opportunity for Uganda’s coffee sector.
UCDA Takeover: A Political Storm in Parliament
The anticipated growth spurred by high coffee prices was overshadowed by the contentious restructuring of the Uganda Coffee Development Authority (UCDA). Early in 2024, the Ugandan government announced plans to integrate UCDA into the Ministry of Agriculture, Animal Industry, and Fisheries (MAAIF) as part of the Rationalisation of Agencies and Public Expenditure (RAPEX) policy aimed at streamlining operations and reducing redundant administrative structures.
On November 7, 2024, the National Coffee (Amendment) Bill, 2024, was passed, integrating UCDA into MAAIF. This move, approved during a plenary session on November 6, sparked intense debate and opposition, particularly from the National Unity Platform (NUP) members who staged a walkout in protest.
Critics, including Nathan Nandala-Mafabi (FDC, Budadiri County West), argued that dissolving UCDA would disrupt a sector critical to Uganda’s economy. Proposals for a transitional period to ensure a smooth handover were rejected. The Attorney General, Kiryowa Kiwanuka, defended the merger, stating it would enhance efficiency and coordination while reducing duplication. The Bill, first read on September 24, 2024, and scrutinized by the Committee on Agriculture, Animal Industry, and Fisheries, was ultimately signed into law by President Yoweri Kaguta Museveni on December 20, 2024.
EUDR Registration Requirements and Global Market Access
While domestic challenges dominated headlines, international regulatory changes also demanded attention. The European Union’s European Union Deforestation Regulation (EUDR) introduced stringent sustainability criteria for coffee exports, requiring Ugandan producers to ensure their supply chains are free from deforestation. Compliance with these regulations necessitates significant investment in sustainable farming practices and traceability systems, posing challenges particularly for smallholder farmers with limited access to modern agricultural technologies.
Despite the compliance costs, the EUDR presents an opportunity for Uganda’s coffee sector to align with the growing global demand for ethically sourced and sustainable products. Industry stakeholders have begun discussions on how to adapt to these requirements, with some viewing it as a chance to elevate Uganda’s coffee in the global market.
A Year of Promise and Uncertainty
In 2024, Uganda’s coffee sector was characterized by high prices and increased global demand, yet marred by political turmoil and regulatory hurdles. The UCDA takeover and President Museveni’s reform agenda introduced significant uncertainty, while the EUDR added another layer of complexity. As Uganda heads into 2025, the focus will be on whether the UCDA restructuring will deliver the anticipated benefits or if political struggles will impede progress. Navigating international regulations will also be crucial for maintaining Uganda’s coffee export growth and global market position. The sector’s future remains uncertain, but the high prices in 2024 have demonstrated its potential for growth, provided the challenges are addressed and opportunities seized.
