1. Trends and developments in the Uganda Agri sector

2. Ugandas economy Economy grew by 6.3% in 2010 Mainly due to good performance of manufacturing, construction, wholesale and retail sectors Growth rate matched regionally by other states Main driver of growth was the services sector estimated to have grown by 8%

3. Economic growth Uganda and selected countries

4. Uganda: Sectoral Composition of GDP

5. Industry

6. Services

7. Agriculture Agricultural output has been steadily declining Grew by 0.9% last year down from 2.4% in 2009/10  Cash crops sector registered a -15.8%  Forestry and fish subsectors slower growth 2.5%(2010:2.9%) and 0,4%(2010: 2.6%) 73% of all households and the majority of the poor in Uganda depend directly on agriculture for livelihood

8. challenges/constraints Low application rates of productivity enhancing inputs Over exploitation of fish stocks Struggle to comply with demanding international standards Uncertain land rights leading to underinvestment in agricultural land Poor quality of public investment in agriculture Agricultural financing access

9. Trends in agricultural Investment

10. Agriculture FDI – (1991-2009) According to Uganda Investment Authority – Out of over 4, 000 projects licensed by UIA, 527 are agricultural projects – These projects have attracted investments worth US $ 1.28 billion. – UIA has licensed at least 28 projects annually since the late 1990s reaching their peak in 2005 and gradually declining to 45 projects in 2009. – Although the licensed projects have marginally declined, investment in the sector reached a new record of US $ 203 million in 2009 from US $ 189 million in 2008

11. Some Examples: Coffee Sector In 2001 the Neumann Kaffee Gruppe set up Uganda's largest and most modern coffee farm Occupies a total area of 2510 hectares 1802 ha planted with robusta coffee 552 ha as natural tropical rainforest 152 ha infrastructure ( roads, housing, processing, papyrus swamp, etc..)

12. Example: Palm Oil Bidco Uganda is creating a fully integrated edible oil business in Uganda. With an investment of over $130 million spread over a period of five years Bidco is creating the largest oil palm plantation in Africa which will eventually cover over 40,000 ha of plantation Bidco is implementing this project in partnership  Wilmar Group of Malaysia is one of the largest operators of oil palm plantations in the world  ADM based in USA is the largest oilseeds processing entity in the world

13. Examples: Mukwano Group is the largest buyer of cottonseed, sunflower, soya beans, sesame seeds and green tea from out-growers in Uganda Modern oil mill in Lira The Group also has substantial investments in commercial crop farming in Masindi Port of The Masindi District In Uganda. Cultivation blocks for crops such as maize, Soya and Sunflower have been created in a total area exceeding 17,000 acres

14. An Opportunity Inflation typeSept 2011October 2011 Headline28.330.5 Core27.530.8 EFU12.110.1 Food crop38.835.3 Explaining food inflation: “food prices have been driven up by supply side shocks to agriculture, both domestic and external”. Proposal for price controls/agric export limits: “Since foodstuffs constitute the bulk of Uganda’s exports to the region, contributing almost 50 per cent of the total export receipts, a ban on food exports would aggravate Balance Of Payments (BOP) problems and therefore cause higher exchange rate depreciation, which would further worsen the inflation situation.” Dr. Arthur Mugume, BOU Head of Research

15. Drivers of opportunity Rising Local,regional& Global demand: driven in part by population growth, is creating opportunities in agriculture. Discovery of Mineral Resources: expected to raise income levels and thus also demand for food and other commodities Market Information and Partnerships: use of local radio, mobile phones and the internet, has increased the avenues for timely and wider delivery of useful market information Supermarkets, Contract Farming and Collective Action: the growing importance of supermarkets would make farmers more responsive to changes in prices and consumer tastes by linking customers and farmers more effectively

16. Which areas? Agro processing Value addition Farming for export Fish farming