Improving Agricultural Market Performance:
Creation and Development of Market Institutions
119
In Uganda, liberalization was particularly undertaken in response to failing management of
national assets by the state-owned economic enterprises. This also included some agricultural
state-owned economic enterprises, which were previously involved in interesting in Uganda’s
agricultural market and regulating demand and supply. The Government of Uganda withdrew
its marketing boards and state-owned economic enterprises as the common rationale was the
market system should be private-sector led and not restricted by Government involvement in
agricultural market.271 Former state-owned economic enterprises which were privatized
include, among others, Agricultural Enterprises Ltd, Uganda Tea Corporation Ltd, Uganda
Fisheries Enterprises, Uganda Meat Packers Ltd, Uganda Meat Packers Ltd, Uganda Grain
Milling, and the Dairy Corporation.272
Despite this wave of privatization in the early 1990s, a number of specific market institutions
exist to implement the Government of Uganda’s policies and strategies with respect to
regulating and enabling various market channels of Uganda’s agricultural sector as the MAAIF
itself does not have the mandate to conduct business or involve in production. 273 In fact, the
entire agricultural market system of Uganda remains liberalized274 and private-sector led,
where the interference of the Government is limited to regulation, providing extension
services, quality assurance, standardization, research, and provision of inputs in order to
improve market access.275 The reconstitution of the Uganda Development Corporation in 2008
is a slight re-introduction of the Government of Uganda’s interference though its intervention
remains limited and certainly does not concern price controlling (e.g. funding of PPP projects
in fruit processing). 276
Sustainable economic and social development are placed at the hearth of Uganda’s second
National Development Plan (NDP) 2015/16 – 2019/2020 and National Agricultural Policy
2013, which are supported through a Development Strategy and Investment Plan (DSIP) and
detailed Framework Implementation Plans (FIPs). Agriculture is considered as one of the five
priority areas with the greatest multiplier effect on the economy in terms of poverty reduction,
food security, export potential, women labor force participation, wealth creation, inclusive
growth, and employment generation.277 It puts specific emphasis on value-adding along twelve
of the sector’s commodities (e.g. cotton, coffee, tea, maize, rice, cassava, beans, fish, beef, milk,
citrus, and bananas), agro-processing as well as market to support the commercialization of
the agricultural sector.
The NDP draws specific attention to the institutional context and the market system of the
twelve selected value chains, which include production, transportation, storage, processing,
market, and distribution activities. The sector’s key players, stakeholders, and market
institutions have different entry points through one (or more) of these stages and hence enable
the Government to realize its objectives for the agricultural market. Indeed, the Government of
Uganda looks to develop the capacities of such organizations (e.g. cooperatives, farmers’’
organizations, associations) to encourage economies of scale, improve market access,
271 Interview conducted with Ministry of Finance, Planning and Economic Development in Kampala, June 7, 2017
272 Daily Monitor (2011), 20 years of a privatised Uganda, available a
[Accessed May 2017].
273 Interview conducted with Ministry of Agriculture, Animal Industries, and Fish in Kampala, June 9, 2017
274 Interview conducted with Ministry of Trade, Industry & Cooperatives in Kampala, June 7, 2017
275 WTO (2012), Trade Policy Review: East African Community, Geneva: World Trade Organization: Geneva.
276 Interview conducted with Ministry of Finance, Planning and Economic Development in Kampala, June 7, 2017
277 Government of Uganda (2015), Second National Development Plan (NDPII) 2015/16 – 2019/20, available at
[Accessed May 2017].