A suite of economic studies by FAO, validated with experts of the Government of Uganda, shows modest but well prioritized investments in agriculture will benefit the economy, household wellbeing, and lower food prices, and reveals which Ugandan districts should be prioritized for public investments in cassava, coffee, goats, maize and millet
KAMPALA – The Food and Agriculture Organization of the United Nations (FAO) together with the Government of Uganda have unveiled a package of economic reports to government policymakers in a bid to prioritize and repurpose future investments in agriculture for post-COVID-19 economic recovery with poverty reduction.
As the Government of Uganda foresees spending UGX 9.2 trillion on agriculture between 2020/21 and 2024/5 under its third National Development Plan (NDP III), FAO was tasked to develop three studies, in close collaboration with the National Planning Authority (NPA), the Ministry of Agriculture, Animal Industries and Fisheries (MAAIF), and the Economic Policy Research Centre (EPRC).
The first study identified agrifood sectors where public investment has the most across-the-board positive impact on economic growth and poverty reduction. Drawing on this, the second study zoomed in to determine the districts where those high-impact agrifood sectors have the most potential for production (yields) and poverty reduction, and the third one analysed what type of investment specifically is needed for the sectors identified and districts pinpointed.
“This suite of economic reports that we are sharing with the Government of Uganda today is a major milestone in helping the country to prioritize its investments in agriculture for better returns on investment in untapped production potential, the economy at large, and poverty reduction,” said Mr. Marco V. Sánchez, Deputy Director of Agrifood Economics at FAO.
“For the first time, there is now solid, data-driven evidence at the commodity-district level of where and what to invest in,” he added during the launch event in Kampala on Wednesday.
Studies indicate that the impact of increasing public investment in agrifood sectors in Uganda is assessed across five “scorepoint categories” including private consumption, total gross domestic product (GDP) and agrifood GDP, poverty reduction, and export growth.
The first report found that sugar cane sector leads the ranking, coming top for the first three categories. However, for poverty reduction, cassava and potato take the lead, while banana also ranks high. For export growth, tea, coffee, cocoa, and vanilla are out in front, but the impact on other private consumption, GDP or poverty reduction, is more modest.
To pinpoint areas where investments are likely to have big impacts in terms of both agricultural growth and poverty reduction, the second study combined a set of spatial data to locate, for each prioritized agrifood sector, districts with strong agricultural potential, large productivity gaps, and high incidence of poverty (the equivalent to poverty reduction potential). The new methodology used allows to geographically rank districts in the central, eastern, northern, and western regions of Uganda for investments in high impact agrifood sectors.
Using studies 1 and 2 as a base, and through stakeholder and government consultations, the forthcoming third study selected 5 districts and their respective high-impact agrifood sector for an in-depth assessment of the most pressing investments.
As part of that holistic assessment, focus-group discussions were organized in Lira for cassava (northern region), in Masaka for coffee (central region); Kibaale for goats (western region), Serere for maize (eastern region) and Soroti for millet (eastern region). Across the board, interviewed farmers listed the quality and availability of inputs such as seeds and improved breeds as the most pressing investment. Better access to extension services is also a priority, with a call to expand coverage, improve linkages with recent R&D, and deliver technical advice and training in the languages spoken locally. Mechanization also ranks high, with a focus on the suitability of equipment for smallholders’ needs, their affordability, and the skills level required to maintain them. Interestingly, investments in road access and electricity infrastructure did not come out as high priorities from the focus-group discussions with farmers and stakeholders.
This portfolio of work of economic analyses and repurposing agrifood investments was carried out by the Agrifood Economics Division’s Monitoring and Analysing Food and Agricultural Policies (MAFAP) programme, one of FAO’s leading policy support initiatives that works with countries in Africa to strategically prioritize, reform and implement policies on food and agriculture.
The data-driven evidence will inform the Government of Uganda’s decisions in prioritizing investments in agriculture as part of the implementation of, among others, the Third National Development Plan (NPDIII) and in alignment with the delivery approach promoted under the Parish Development Model. The policymaking evidence can also guide the lending portfolios of national and international financial institutions in Uganda as well as investment proposals under FAO’s Hand-in-Hand Initiative.
Prof. Pamela K. Mbabazi, Chairperson of the National Planning Authority noted that when COVID-19 broke out in March 2020, the Covid-19 restrictions disrupted global supply chains around the world. Consequently, global food prices shot up and sections of the population in many developing countries faced severe food shortages.
She revealed that also, the war between Russia and Ukraine has worsened the situation caused by Covid-19 since the two are major suppliers of wheat, maize, barley, sunflower oil, fertilizers, and a number of other agricultural commodities to many countries in Africa and around the world including Uganda.
“The Russia-Ukraine region is responsible for roughly 30% of global exports of wheat and 65% of sunflower, in addition to the supply of maize and agricultural fertilizers.”
As the world sounds alarms of global food shortages, it is estimated that only about 35% of the total arable land in Uganda is currently under agricultural production.
Prof. Mbabazi is, however, optimistic that the studies will guide Uganda to produce enough agricultural products for both domestic consumption and export.
“These studies, if implemented, would not only cushion Uganda from the global food supply shocks such as the ones we are experiencing due to COVID-19 and the Ukraine-Russia war; but could also actually turn around our agricultural sector to make Uganda the regional food basket that it should be, as well as significantly increase our GDP and incomes of our farmers.”
“The findings from these studies give us a scientific basis for selecting which kinds of commodities to invest in and in which districts, in our quest to transition our farmers from peasant agriculture,” she added.
Speaking at the event, Mr. Antonio Querido, FAO Representative in Uganda warned that feeding a global population projected at 10 billion by 2050 will require emphasis on a radical transformation in how food is produced, processed, traded, and consumed and “to turn the status quo into a corridor of opportunities we must use a systems approach.”
“This calls for something new – something bold, but long overdue,” he noted.
He said that the studies provide an essential stepping stone to walk the roadmaps developed by the Government of Uganda and to reach the defined targets.
“They provide the evidence-based frame to understand which actions will catalyse agrifood systems transformation agenda in Uganda to reach the last mile.”
“More specifically, the studies identify priorities for public investments and policy reforms that can boost economic recovery in the post COVID-19 context, trigger agricultural productivity gains and deliver positive results on economic well-being and poverty reduction, especially in rural areas,” added Mr. Antonio.
He is optimistic that this initiative will the government and other stakeholders in prioritizing investments for economic recovery and repurposing domestic public budgets for agriculture to achieve more value for money, economically, socially and sustainably.
“The work conducted by the MAFAP programme, in collaboration with NPA and MAAIF, stands at the heart of food systems transformation. I commend the Government of Uganda on its sound legal, policy and institutional frameworks, which provide the roadmap for taking this food systems approach further.”
“We the FAO, and the NPA and MAAIF, believe that this initiative will help government and other stakeholders in prioritizing investments for economic recovery and repurposing domestic public budgets for agriculture to achieve more value for money, economically, socially and sustainable,” added Mr. Querido.