Improving Agricultural Market Performance:
Creation and Development of Market Institutions
126
internationally banned, undermining the export opportunities for Uganda’s farmers as inputs
are unstandardized in combination with poor monitoring to what extent these inputs are used
across Uganda’s agricultural sector and from which sources. In fact, the absence of
standardization had led Uganda losing out on attracting agri-processing FDI.318
Standardization is also required to address the issue of middlemen operating as agents of the
processors, who buy with different standards (e.g. bags instead of kilograms), thereby charging
different prices. This could be addressed by contract farming in combination with
standardization.319
To address this bottleneck, current market institutions such as the UGDA, CDO, DDA, and the
MAAIF should further focus their mandates towards this gap. More regulation and guidance is
required to facilitate the observation of these standards and quality assurance of inputs.
Marketing boards should provide these to ensure standardization and correct application of
seedlings, pesticides, inputs, and fertilizers. 320
The second bottleneck concerns the absence of value addition activities facilitated by handling
and storage infrastructure. It is estimated 20 to 30% of the value of agricultural produces is
lost due to absent or inadequate handling and storage infrastructure. 321
More regulation guidance by market institutions is necessary for value-addition and
processing. The focus is on agri-business and the upper segments of the agricultural market
system (i.e. processing and value addition). This particularly concerns commodities which are
easily marketed and promoted (e.g. citrus, mango, passionfruit, pineapple, and apple). 322 This
includes increasing value-adding processing323 and packaging324 activities for a number of
(export) commodities (e.g. coffee, tea, cotton, and tobacco), which can yield considerable
value-added profits.325
This is especially true for increasing value-added to raw or semi-processed products326 and
food processing activities.327 Examples of the latter include roasting of coffee, processing
instant coffee, crushing coffee plants, which should be the responsible of the UCDA, processing
cereals, processing of natural fibers, and canning fish, meat, vegetables (e.g. tomato
concentrate), and tropical fruits (e.g. juice extracts and frozen pulps328). Processing of dairy
products includes the production of butter, cheese, yoghurt, ice cream, power milk, milk curds,
and ultra-high-temperature processed milk, which could be a specific mandate of DDA. Rather
than focusing on commodity-specific institutions, it may be worthwhile to also explore the
creation of new market institutions focusing on value-addition and processing activities.
318 Interview conducted with Uganda Investment Authority in Kampala, June 7, 2017
319 Interview conducted with National Agricultural Advisory Services in Kampala, June 8, 2017
320 Interview conducted with Ministry of Trade, Industry & Cooperatives in Kampala, June 7, 2017
321 Interview conducted with Ministry of Finance, Planning and Economic Development in Kampala, June 7, 2017
322 Interview conducted with National Agricultural Advisory Services in Kampala, June 8, 2017
323 Government of Uganda (2017), Agriculture, available a Accessed May 2017]
324 Uganda Investment Authority (2017), Investment Opportunities, available at
[Accessed May 2017].
325 Export.gov (2016), Uganda - Agriculture, available a Accessed
May 2017].
326 Government of Uganda (2015), Second National Development Plan (NDPII) 2015/16 – 2019/20, available at
[Accessed May 2017].
327 Government of Uganda (2017), Agriculture, available a Accessed May 2017]
328 Export.gov (2016), Uganda - Agriculture, available a Accessed
May 2017].