Improving Agricultural Market Performance:
Creation and Development of Market Institutions
116
processing sector to increase exports and foreign exchange earnings.240 Further opportunities
exist for (foreign) companies to manufacture and assembly agricultural inputs, machinery, and
equipment,241 as the Government of Uganda seeks to support and promote private (foreign)
investment in the manufacturing of such inputs and agro-processing of prioritized crops and
commodities.242
Distribution and Market
Linkages between various agricultural market participants are generally weak, which, in
combination with poor transportation networks, frustrates Uganda’s overall agricultural
market system.243 Geographical zones in Uganda have been designated for specific production
according to different crops, soil conditions, and local climate 244 and are linked to the national
road network with the objective to optimize logistics and Uganda’s agricultural market
system.245 However, distribution of Uganda’s agricultural products is hampered due the
absence of nearby markets246 and poor connections between the production areas and final
markets,247 leading to high transportation and freights costs248 and reduced agricultural
profits.
Reducing the transportation and freight costs and improving domestic and regional market
access requires to improve Uganda’s degraded rural road network (i.e. feeder, community, and
trunk roads) and strategic roads and railroads.249 The bad conditions of Uganda’s rural road
network forces small-scale farmers to sell their products to intermediaries at very low
prices.250
Consumption and Trade
Uganda recorded an agricultural trade surplus of US$550 million for 2013, with agricultural
exports amounting up to US$1.33 billion and imports equaling US$0.77 billion. However,
despite its considerable export of raw agricultural products, Uganda has been a net importer of
food as it imported foods for more than US$0.79 billion over 2014 251 while it only exported
240 Export.gov (2016), Uganda - Agriculture, available a Accessed
May 2017].
241 Uganda Investment Authority (2017), Investment Opportunities, available at
[Accessed May 2017].
242 Government of Uganda (2015), Second National Development Plan (NDPII) 2015/16 – 2019/20, available at
[Accessed May 2017].
243 New Agriculturist (2012), Country profile – Uganda, available a
Accessed May 2017].
244 Interview conducted with Uganda Investment Authority in Kampala, June 7, 2017
245 Uganda Investment Authority (2017), Investment Opportunities, available at
[Accessed May 2017].
246 Women in Europe for a Common Future (2014), Empower Women – Benefit for All: Report
Baseline and Training Needs Assessment – Agriculture for Uganda, pp. 15-20, Utrecht: WEFC.
247 Government of Uganda (2015), Second National Development Plan (NDPII) 2015/16 – 2019/20, available at
[Accessed May 2017].
248 Export.gov (2016), Uganda - Agriculture, available a Accessed
May 2017].
249 Government of Uganda (2015), Second National Development Plan (NDPII) 2015/16 – 2019/20, available at
[Accessed May 2017].
250 Women in Europe for a Common Future (2014), Empower Women – Benefit for All: Report
Baseline and Training Needs Assessment – Agriculture for Uganda, pp. 15-20, Utrecht: WEFC.
251 FAO (2015), FAOSTAT Uganda, available a Accessed May
2017].