Uganda pays subsidies to improve small farm productivity

By Richard Wetaya

July 20, 2020

As this year’s planting season begins in earnest, many smallholder farmers in Uganda are finding a welcome end to their struggle to procure quality farm supplies.

About 450,000 smallholders comprising 25 percent of Uganda’s farm households, or 2.2 million persons, have been identified to receive hybrid seeds, pesticides, fertilizers, supplies for improved harvest storage and machinery at subsidized prices under the government’s new Agriculture Cluster Development project.

Some of the country’s leading agricultural experts reckon the intervention will likely be a timely safeguard as apprehension grows in the country over the novel coronavirus pandemic and its likely aftershocks, one of which is thought to be food insecurity.

The project, which is also supported by the World Bank, aims to raise on-farm productivity and marketable volumes of cash crops, such as maize, beans, rice, coffee and cassava. It also supports developing plans to rehabilitatate and expand existing small irrigation schemes for rice, activities and investments to improve post-harvesting handling of selected commodities, and the improved efficiency of output markets, among other goals.

In many ways, the intervention means that Uganda is unlikely to experience a repeat of last year’s debacle, which had many of the country’s smallholder farmers suffering losses after planting poor quality seeds.

Benefitting smallholder farmers

Fred Gumaite, a 39-year-old farmer from the Eastern Ugandan district of Iganga, is one of those set to benefit from the project. Last year, the father of five lost all the maize and beans plants he had grown on his one-acre farm as a result of planting poor quality seeds.

Despite applying fertilizers, his maize plants were stunted. Inconsistent rains did not help matters.

But this year, Gumaite, who is a member of the Bwigula Farmers’ Cooperative, will receive more productive hybrid maize and bean seeds for planting.

Gumaite, like many others in his village farmers’ cooperative, will also receive fertilizer, materials for harvesting and pesticides.

“I expect to have a substantial harvest later on this year,” Gumaite said.

The Agriculture Cluster Development project is working with approximately 300 area-based commodity cooperative enterprises representing about 3,000 rural producer organizations across the country, said Henry Opolot, project coordinator.

“These  represent about 450,000 farming households, of which 180,000 are producers of maize (50 percent of them also produce beans), 95,000 are producers of beans, 40,000 are producers of rain-fed upland and rain-fed lowland rice, 110,000 are producers of robusta and arabica coffee and 25,000 are producers of cassava,” Opolot said.

“This project has a gender target of no less than 40 percent men, 40 percent women and 20 percent youth each in all its activities and commodity,” said Joseph Oryokot, a senior agricultural specialist with the World Bank. “The project assists women and youth to become more involved and effective in their participation in farming activities and helps them have more transparency and equitable access to income received from the sale of crops they grow.”


Conservative estimates suggest that if the project reaches 450,000 farm households in the targeted districts, the sale of inputs will experience an incremental increase of over US$11 million in each cluster over the six years of the project duration.

Each cluster covers an average of three districts across the country that have proven production potential for at least two of the selected crops.

“An increase in on-farm production spawned by the use of the subsidies will likely stimulate an increase in farm output in project areas and consequently enhance farmers’ incomes and link them to markets,” Oryokot said.

Farmer eligibility

To benefit from the project, farmers must show that they are members of a registered farmer association/cooperative. They are also required to produce valid national identity cards, show a willingness to co-fund purchases of inputs and commit at least one acre of their land to the project.

In return, participating farmers are given a time-bound partial and diminishing matching grant through an e-voucher system to help finance the purchase of key inputs and on-farm storage.

The e-voucher system is a new concept in Uganda, said William Etek, the project’s e-voucher specialist. It’s the key instrument being used to deliver the project’s subsidy program, which will provide support to farmers for agro-input purchases.

“Thus far, 90,206 farmers have been registered for the e-subsidy program,” Etek added. Some 37,750 farmers are enrolled in the e-voucher system and 40,173 others already have been provided with input subsidies using the system.

Upon receiving a farmer’s contribution, the government provides a matching grant subsidy over three cycles. Farmer receive notice of the payment through their mobile phones and are then able to place orders with their local agro-input dealer for inputs worth the value of the voucher from.

In the first season, farmers contribute 33 percent of the cost of inputs, while the government contributes the rest. In the second season, contributions from the farmers and the government are proportionate. In the third season, farmers contribute 67 percent towards input acquisition and the government contributes 33 percent. Farmers are expected to take up the full cost by the fourth season.

Thus far, 39 agro-input dealers have been accredited to provide services to farmers and 123 farmer organizations have been approved for funding.

Work has also commenced on the installation of 5-acre solar-powered irrigation systems in Hoima in western Uganda and Masaka  in central Uganda.

Image: Ugandan farmer spreads black coffee beans to dry. Shutterstock