Improving Agricultural Market Performance:
Creation and Development of Market Institutions
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5.3 Uganda
The purpose of this country case study is to firstly introduce Uganda’s general agricultural
market system (5.3.1), after which a selection of institutions will be evaluated into more
details (5.3.2 to 5.3.4). Conclusions and lessons learnt may be generalized and serve as
inspiration to other OIC Member Countries (5.3.5).
5.3.1 Overview of Agricultural & Food Sectors and Markets
The following section briefly describes the current situation of the five stages of Uganda’s
agricultural market system as explained in the Conceptual Framework. The selected
agricultural market institutions (Section 5.3.2) typically intervene in one or more of these
stages. The five stages include:
 Production;
 Handling and storage;
 Processing and packaging;
 Distribution and market; and
 Consumption and trade.
Production
Uganda’s agricultural production structure can be marked by a two-tier system, consisting of
“traditional” and “improved” systems. While the former is characterized by limited inputs and
outputs, the latter features a certain degree of investment (e.g. fencing, irrigation, and pasture
improvement), resulting in slightly higher productivity rates. Only 18,000 km² is considered
“improved” pastures, while a large share of Uganda’s population is dependent on these areas
for their livelihood, putting considerable pressure on the capacity and natural resources of
these areas. The land tenure system in Uganda furthermore challenges the agricultural
production channel. The four systems of land tenure218 (i.e. Customary, Freehold, Mailo, and
Leasehold) are inefficient and complicated219 and impact land productivity in different
degrees. Most land tenure is Customary (80%), where landholders do not have a formal
entitlement but have a certification of ownership. 220
About 75% of Uganda’s agricultural output is generated by farmers with an average farm size
of 2.5 hectares221 while 68% of Uganda’s farmers are considered subsistence farmers with less
than two hectares. 222 In the coffee sector, for instance, 500,000 small-scale farmers operate
with an average farm size of 0.2 hectares, while farm size vary from 0.5 to 10 hectares in the
cotton sector. These small-scale farmers dominate Uganda’s agricultural sector, making it an
outspokenly fragmented sector 223 though some large-scale commercial farming of cash crops
(e.g. tea, palms, rice, and sugarcane) exists. Coffee, banana, livestock, and fishing remain
activities dominated by small-scale farmers with the exception of some fish processing plants
218 FAO (2006), Country Pasture/Forage Resource Profiles,
available a Accessed May 2017].
219 Export.gov (2016), Uganda - Agriculture, available a Accessed
May 2017].
220 WTO (2012), Trade Policy Review: East African Community, Geneva: World Trade Organization: Geneva.
221 Ibid
222 Interview conducted with National Agricultural Advisory Services in Kampala, June 8, 2017
223 Government of Uganda (2017), Agriculture, available a Accessed May
2017].