Improving Agricultural Market Performance:
Creation and Development of Market Institutions
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Currently, farmers receive below-market prices as they are forced to sell their products prices
in times of harvest and plenty supply due to the absence of storage facilities and warehouses.
The performance of market institutions, and, particularly, marketing boards, could be
improved if they would have budget to buy surplus in times of harvest, which can be stored
and released in times of high demand to ensure stable supply and reasonable prices. There has
been a push for such price control mechanisms within marketing boards but action has been
limited, mainly due to budget constraints and the liberal nature of Uganda’s market system.329
This furthermore demonstrates the need of accurate storage facilities and warehouses, which
individual smallholder and small-scale farmers can’t afford and have only small quantities to
store. This shows the need of area cooperative enterprises, which provide market access and
economies of scale for realizing post-harvest facilities. UWRCA’s mandate should hence not
only cover managing the WRS but rather expending along the entire agricultural market
system and supporting the formation of farmer cooperatives.
The formation of cooperative should also encourage farmers to become more entrepreneurial
and committed to delivering according to standards and quality assurance certifications. This
can be done by uniting farmers in cooperatives, with shares of processing facilities. This does
not only provide farmers with a secure demand for their agricultural produces but also
provides them with (higher) dividends and encourages them to improve the quality of
products.330 The mandate of existing market institutions should also cover this initiative.
5.3.5 Conclusions and Lessons Learned
Uganda’s agricultural productivity is among the lowest in Africa, which can be attributed to
limited training and extension services, poor infrastructure, weak linkages between
production and markets, limited access to credit and finance, and low use of inputs and
technologies.331 This is further challenged by Uganda’s fragmented agricultural sector, which is
characterized by its liberalized nature and limited Government intervention via agricultural
market institutions. The Government of Uganda does not directly interfere in any of the six
stages of the agricultural market but is confined to supporting research, extension services,
and quality assurance.
Overcoming these challenges requires the Government of Uganda to create an enabling
environment attractive to agriculture, thereby specifically taking in to account the small-scale
and fragmented nature of Uganda’s agricultural sector. It is especially this enabling role which
(selected) market institutions could play, even more given the limited technical capacity in
promoting market and value-addition.
A first step to do would be to create a market institution responsible for authorizing farmers
(e.g. farmer card or certification) as advocated in Section 5.3.4. This would be critical in
monitoring, measuring, and evaluating the performance of the agricultural market system
through collecting, analyzing, and disseminating market intelligence. Indeed, improving
Uganda’s agricultural production capacity and agricultural market system requires better
flows of market information (e.g. on meeting the standards required in export markets)332 as
329 Interview conducted with Ministry of Trade, Industry & Cooperatives in Kampala, June 7, 2017
330 Interview conducted with National Agricultural Advisory Services in Kampala, June 8, 2017
331 WTO (2012), Trade Policy Review: East African Community, Geneva: World Trade Organization: Geneva.
332 Government of Uganda (2015), Second National Development Plan (NDPII) 2015/16 – 2019/20, available at
[Accessed May 2017].