Name of presenter: Connie Magomu Masaba Ministry of Agriculture- Uganda IMPACTS OF LARGE SCALE LAND-BASED INVESTMENT, IMPLEMENTATION CHALLENGES, AND POLICY IMPLICATIONS; LESSONS FROM THE UGANDA OIL PALM PROJECT

GLTN BRIEFING AND PROGRAMME Challenges of smallholder agriculture Why Large Scale investments/ Why the Oil Palm PPP Project Background Establishment of the Oil Palm PPP model Impacts of the Oil Palm Project Challenges Policy Implications CONTENT Partner Logo 1Partner Logo 2Partner Logo 3

GLTN BRIEFING AND PROGRAMME Low production and productivity, Low funding of the sector Lack of agricultural financing/credit Declining soil fertility High losses due to pests, vectors and diseases Uncertain land rights Complying with international quality and safety standards Inadequate valu e a ddition and marketing infrastructure a nd road network Lack of mechanisation and irrigation CHALLENGES FACED BY THE AGRICULTURAL SECTOR IN UGANDA

GLTN BRIEFING AND PROGRAMME To attract the much needed investment in the sector, Private sector not confident that smallholder farmers can be trusted to deliver Ensure supply for the factory Nucleus estate a source of technical know how, inputs, mechanisation and value addition Assures commitment by the private sector that invests in R&D Efficiency in production Job creation WHY LARGE SCALE LAND INVESTMENTS IN AGRICULTURE

GLTN BRIEFING AND PROGRAMME Annual per capita consumption is 4.3 kg Vs global average of 22.4kgs Annual demand is about 120,000 tonnes Vs production at 40,000 tonnes. (Imports at USD 177 million in 2011). High poverty levels, high importation of vegetable oils (85 -90% ), JUSTIFICATION FOR OIL PALM DEVELOPMENT

GLTN BRIEFING AND PROGRAMME Goal: poverty reduction in the project area. Objectives: Import Substitution. Rural poverty reduction in project area through raising farmer incomes Improve population health through increased intake of vegetable oil. Export Diversification. GOAL AND OBJECTIVE

GLTN BRIEFING AND PROGRAMME IFAD Loan (USD 52M), GOU (USD14M), Private sector (USD70M), Farmers (USD3.9M) KOPGT (USD3.0M), Reflows (US 4.4M) Total funding USD 147million INVESTMENT COSTS

GLTN BRIEFING AND PROGRAMME GOU advertised the tender - Transparent process of getting private sector partner Agreements in place with secured interests of both farmers and the private sector partner and Government Sensitization and involvement of the communities from start of project Private partner with the interest of the community at heart KOPGT established and mandated to manage the oil palm establishment and market for smallholders ESTABLISHMENT (PPP)

GLTN BRIEFING AND PROGRAMME IMPACTS SO FAR Farmers: Increased incomes ($390/month per Ha for mature plantations) Improved land rights (landless and women, purchase of land, demonstration of legitimate access to land) Community: Creation of employment (2,000 employed on nucleus estate, 500 in farmer gardens and 1,610 directly as farmers of which 583 women) Improved infrastructure (e.g. 750 km of road network and ferry service) and services (e.g. financial and public) Production in other crops, livestock and complementary agricultural activities, tourism and other non-agricultural enterprises is expanding Government- Ush100billion +, new enterprise, use of land underutilized before, poverty reduction, attraction of other private sector – KIS, less pressure on the lake and forests for income

GLTN BRIEFING AND PROGRAMME Challenges The Land question in Uganda which make access difficult Philosophy of public sector different from that of Private sector- Social good Vs profit maximisation. Bureaucracy in the Public sector causes delays yet time is money. Systems seems to be more valued than end result. Attracting private sector financing into agricultural sector not easy due to long pay back period, risk associated with agricultural investments and markets Finding credible investors willing to invest is challenging Negative publicity and international debate on land grabs that is associated with agric investments is a turn off for investors. Quality and safety issues associated with smallholder farmers discourages partnerships with them. Suspicion among the partners especially smallholders assuming that they will be taken for a ride by big investors

GLTN BRIEFING AND PROGRAMME Policy Implications/Lessons Learnt Govts should determine areas of investment to ensure development of the communities Involve host communities as activities partners with clear benefits to them, including equity share. Guide on the valuation of community contribution in terms of land Provide meaningful employment for the communities Ensure that the promises made at design of the investment are met/realised Put in place a monitoring and evaluation system for the investment to provide required numbers Provide supporting infrastructure that benefits the general economy of the host community. Stay active in the investment 4Ps( Public, Private, Producer Partnerships) Strengthen the farmer organisations to be strong business partners able to negotiate and also take up their part of the risk. Involve the communities early in the planning process

Ministry of Agriculture, Animal Industry and Fisheries Vegetable Oil Development Project 12

Ministry of Agriculture, Animal Industry and Fisheries Vegetable Oil Development Project 13

Ministry of Agriculture, Animal Industry and Fisheries Vegetable Oil Development Project 14

Ministry of Agriculture, Animal Industry and Fisheries Vegetable Oil Development Project 15

Ministry of Agriculture, Animal Industry and Fisheries Vegetable Oil Development Project 16

Ministry of Agriculture, Animal Industry and Fisheries Vegetable Oil Development Project 17

Ministry of Agriculture, Animal Industry and Fisheries Vegetable Oil Development Project 18

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IMPACTS OF LARGE SCALE LAND-BASED INVESTMENT, IMPLEMENTATION CHALLENGES, AND POLICY IMPLICATIONS; LESSONS FROM THE UGANDA OIL PALM PROJECT NEED TO KNOW MORE? Connie Magomu Masaba