A young farmer briefs fellow youth about her banana agricultural enterprise. Banana is one of the crops that the studies propose for investment prioritization

The Food and Agriculture Organization of the United Nations (FAO) together with the Government of Uganda 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.

“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”, said prof. Pamela K. Mbabazi, Chairperson of the National Planning Authority.

“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.

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 collaborated with National Planning Authority (NPA), the Ministry of Agriculture, Animal Industries and Fisheries (MAAIF), and the Economic Policy Research Centre (EPRC), Ministry of Finance Planning and Economic Development, Ministry of Local Government and the Office of the Prime Minister to develop three keystone studies to support advancement of the sector.

The first study identified agrifood sectors where public investment has the most positive impact on economic growth and poverty reduction across-the-board. 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 Marco V. Sánchez, Deputy Director of Agrifood Economics at FAO.

“For the first time, there is now solid, data-driven evidence at commodity-district level of where and what to invest in”, he added, during the launch event in Kampala.

The impact of increasing public investment in agrifood sectors in Uganda is assessed across five “score-point 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. 

Better access to extension services is also a priority, with a call to expand coverage, improve linkages with recent research and development 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.

“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”, said

Antonio Querido, FAO Representative in Uganda.

“FAO, 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”, Querido added.

About FAO’s MAFAP programme

The Monitoring and Analysing Food and Agricultural Policies (MAFAP) programme is a leading policy support initiative at FAO that works with countries in Africa to strategically prioritize, reform and implement policies on food and agriculture. By monitoring and analysing public budgets and trade and market policies, MAFAP guides governments to repurpose their agricultural support to accelerate the transformation of agrifood systems. Read more about the MAFAP programme here.

The studies:

• Productive public investment in agriculture for economic recovery with rural well-being: an analysis of prospective scenarios for Uganda ESA Technical Study here.
• Accompanying short ESA Policy Brief here.
• A tool to support the spatial prioritization of commodity-specific investments: An application to Uganda. ESA Working Paper here.
• Accompanying short ESA Policy Brief here.