SPECIAL REPORT

FAO/GIEWS REVIEW OF CROP and FOOD SITUATION IN UGANDA

27 September 2006

• 1. OVERVIEW
• 2. SOCIO-ECONOMIC CONTEXT
• 3. THE 2006 CROPPING SEASON
• 4. FOOD SUPPLY

1. OVERVIEW

An FAO/GIEWS team travelled to Uganda to review the overall food situation and establish/strengthen contacts with relevant institutions (both government and non-government) to streamline the flow of food security related information to GIEWS. The team reviewed data and information available from various sources, including Government, UN agencies, donors and NGOs at central, district and local level and travelled to selected districts in all four regions of the country, including the northern districts which are affected by insurgency and substantial displacement of people.

A major difficulty faced was a lack of reliable agricultural statistics (see section 2.4.1).

In Uganda, food crops are generally produced in two seasons. The "long rains" season (crops harvested in July-August of the year in question) plus those pertaining to the following "short rains" season (usually harvested in December of the year to February of the following year. Based on data from government sources, the 2006 estimated production is 2.657 million tonnes of cereals, 0.767 million tonnes of pulses, 8.050 million tonnes of roots and tubers, and 9.391 million tonnes of plantains.

Despite an apparent satisfactory overall food supply situation, access to food for a large number of people is limited by low purchasing power. Hence, internally displaced people (IDPs), and people affected by drought in some north-eastern districts receive food assistance. WFP has been buying food in-country as far as possible for its programmes, and it intends to do so in future also. WFP food distribution continues to reach 1.45 million displaced persons, 165 000 refugees and other vulnerable persons.

The peace talks in Juba between the Ugandan government and the Lord’s Resistance Army (LRA) have made good progress, with a formal cessation of hostilities agreement signed on 26 August. Although there are reasons for optimism, the challenges are daunting. A successful conclusion to the peace talks will trigger large movements of internally displaced persons (IDPs) to their places of origin or choice. The decision of IDPs to move back is generally based on the expectation of marked improvements in their livelihoods at their places of return when compared to the socio-economic conditions in their current environment. The timing of their movement needs to be closely monitored to assist with their immediate food needs and to return them to their full productive capacity.

Agricultural planning and programming are seriously constrained by lack of reliable agricultural statistics. Available agricultural statistics are of poor quality, and some can be misleading. There is an urgent need for a periodic and systematic agricultural data generating mechanism, including the carrying out of the agricultural census, that has long been in planning.

2. SOCIO ECONOMIC CONTEXT¹

2.1 General

The civil war in Uganda (between the Ugandan Defence Forces and the Lord’s Resistance Army) has entered its 20th year, severely disrupting economic life with about three-quarters of the civilian population in the affected northern regions compelled to live in camps, known as protected villages; tens of thousands of others live as displaced persons in other districts. Some have been away from their homes for a decade or more. The government administration in these areas is seriously impaired, and many services are now run to a large extent by the UN and other non-governmental organisations. After so many years of conflict, recent talks between the warring parties have raised hopes for a negotiated settlement. Peace talks between the government and the LRA/M, mediated by the government of South Sudan (GoSS) began in Juba in mid July. The parties agreed on a 5-point agenda for negotiations: cessation of hostilities; Comprehensive solutions; Economic and social development of the north and eastern Uganda; Resettlement of the IDPs; Reconciliation and Accountability and a formal Ceasefire Agreement encompassing demobilisation, disarmament and re-integration (DDR). The landmark cessation of hostilities agreement on 26 August has cleared the way for negotiations on the substantive items.

2.2 Macro-economic situation

The economy grew by an average of 5.3 percent in the 2005/06 financial year, a reduction from 6.6 percent in the 2004/2005 period.² The reduction in growth resulted mostly from a prolonged drought, leading to reduced agricultural production and electricity generation. The economy has been hit hard by the reduction in hydro-electricity generation capacity due to falling water levels in Lake Victoria. GDP growth for 2006/07 is projected at 5.9 percent, below the target of 7.0 percent, a declining trend that undermines poverty reduction efforts. Hardest hit by the electricity shortages has been industrial output, declining by 6.3 percent from the last financial year. A significant portion of the country’s expenditure continues to be funded from external sources. In the 2006/07 budget cycle, 41 percent of government spending is expected to be financed by development partners.

Foreign exchange reserves increased by about 9.5 percent in the first quarter of 2006 reaching US$1.4 billion compared to the same time in 2005. At this level, reserves represent more than six months imports of goods and services and more than nine months of merchandise imports. The Ugandan shilling has varied little since the beginning of 2006. The monthly value changes have been less than one percent, and at the beginning of September 2006 the value of the currency stood at NUS1860:US$1.

Average inflation for the year ending August 2006 rose to 7.5 percent compared to 6.1 percent of a month earlier. The composite food index for the month of August 2006 went up by one percent. Prices of matoke (plantain) went up in all trading centres except Mbale. Likewise increases were registered in the prices of some vegetables (especially cabbage, bitter tomatoes, and beans) in most centres as a result of prevailing weather conditions. Prices of meat and milk went up in a number of centres due to reduced supplies from producing areas arising from restrictions on animal movements and dry conditions. On the other hand, fruits and cereals registered lower prices in most centres due to ongoing harvesting.

2.3 Population

The 2002 census put the population at 24.2 million and the average annual rate of increase between 1991 and 2002 was put at around 3.4 percent. In 2006, the projected population figure stood at 27.4 million (Table 1). In 2003 life expectancy at birth was estimated at just 45.7 years, compared with 47 years in Kenya and 46.1 years for Sub-Saharan Africa. With 52 percent of the population below 15 years in 2002, Uganda retains a high in-built momentum for high population growth.

Table 1: Uganda - Population estimates in 2002 and 2006

2.4 The agricultural sector

2.4.1  Status of agricultural sector data³

Available agricultural statistics are of poor quality, some can be misleading; and there are serious gaps as well. The last published comprehensive agricultural census carried out in Uganda was in 1965. Another census of agriculture was carried out in 1990/91 and there were two follow-up annual sample surveys in 1991/92 and 19992/93 agricultural years. Unfortunately, results from the latest census and the subsequent surveys were contentious and never fully used. Further, the Government could not sustain the survey system.

In 2000, a study concluded that the system of agricultural statistics was, “fragile, vulnerable and unsustainable”, and unable to meet the of data users. The Agricultural Statistical System and infrastructure are not fully developed. The existing data are inadequate to meet the requirements of users. For instance, there is a lack of benchmark data on the agricultural sector. MAAIF has not been able to conduct Annual Agriculture Surveys since mid 1970s. This means in essence, that benchmark and structural-type of agricultural data in Uganda are substantially out of date. This has led to lack of synergy and cost effectiveness in addition to the lack of mechanisms for promoting ‘best practices’ in agricultural data production.

Indeed, a number of features of the system bring into question the reliability of annual production data for all but the “traditional” export crops. Data sets on staple crops such as maize show that the estimates of production are made at the national level and then the same growth rate is applied to each district. Consolidated data on agricultural practices are not available at any level. For livestock, the situation is no better.

Given the importance of the agricultural sector, lack of a reliable regular data collection system is of serious concern. There is an urgent need for implementing the several recommendations put forward by recent studies for generation of data concerning various aspects of agriculture.

Notwithstanding the above, the performance of the agricultural sector, based on published data is given below.

2.4.2   Performance of the agricultural sector

The agricultural sector is the backbone of Uganda’s economy, accounting for almost 40 percent of GDP and employing more than 80 percent of the labour force. Food crops account for 65 percent of the agricultural output while more than 20 percent is from livestock. In 2005, traditional export crops (coffee cotton tea tobacco) contributed about 40 percent of the country’s total merchandise exports and non-traditional crops (fish and cut flowers) about 21 percent. Uganda’s export earnings grew by 14.2 percent in 2003, 22.4 percent in 2004 and 24.1 percent in 2005. The highest growth recorded in 2005 is attributed to improved coffee and fish prices on the world market.

Growth rate in the agricultural sector as a whole was only 0.4 percent in 2005/06, the lowest growth since 1991/92. Production of food crops, which provide about two-thirds of value added in agriculture, increased by only 0.3 percent, and the output of cash crops fell by 7.4 percent. Crop yields are generally low as little improved seed and virtually no fertilizers are used. Also land preparation is mostly done by hand. Hence there is a tremendous potential for agricultural growth as more land can be brought under cultivation and agricultural practices upgraded in the form of expanded use of improved seed and fertilizer and small tractors.

Livestock form an important component of the agricultural sector with production mainly based on traditional systems. With 6.8 million head of cattle and 9.4 million head of small ruminants estimated to be kept in Uganda in 2005, the contribution of livestock to household food economies is considerable.

2.4.3   Export earnings from agricultural commodities

Uganda’s exports are dominated by agricultural products. Growth in exports was substantial in 2005, increasing by 24 percent to US$ 811 million from US$ 653 million in 2004. In 2003 and 2004, export earnings increased by 14 percent and 22 percent respectively. In addition, exports performed well during January to March 2006, increasing by almost 14 percent to US$ 230 million, compared with US$ 202 million during the comparable period of the previous year. Coffee remained the main foreign exchange earner whose contribution to total export earnings increased from nearly 19 percent in 2003 to 21 percent in 2005. Although the quantity of coffee exported fell by about 11 percent, its earnings increased substantially by 39 percent in 2005 indicating improvement in coffee prices on the world market. Fish and Fish products were the second foreign exchange earner whose earnings rose considerably from US$ 103 million in 2004 to 143 million in 2005. The rise is attributed to a combination of increases in the volume of fish exported by about 23 percent in 2005 and fish prices in the world market.

Tea and tobacco are the next main export commodities. Tea exports recorded the lowest revenue of US$ 34 million in the year 2005. In 2003 and 2004, its export earnings stood at US $ 38 million and US$ 37 respectively. Fall in world prices was the main factor behind this decline. Nevertheless, tea ranked as the third largest foreign exchange earner in 2005. Tobacco then followed as the fourth largest foreign exchange earner with a proportional share of about 4 percent to total export earnings in 2005. During 2003 and 2004, its share to total export earnings stood at 8 percent and 6 percent respectively. This could be explained by the reduction in the volumes of tobacco exported from nearly 28 thousand tonnes in 2004 to about 24 thousand tones in 2005. The share of cotton exports to total export earnings declined from 6.5 percent to 3.6 percent from 2004 to 2005. This is attributed to the fall in cotton (raw) prices in the world market, thereby reducing export revenues from about US $ 43 million to US $ 28.8 million respectively. Roses and Cut flowers became sixth as highest foreign exchange earner in 2005 with export value of US $ 24 million, accounting for 3 percent of total export earnings. This compares with US $ 26 million in 2004 and US $ 22 million in 2003. The Floriculture sub-sector has been one of the vibrant sub-sectors whose contribution to total export earnings had considerably increased over the years, although it declined marginally in 2005.

3. THE CROPPING SEASON

3.1  Rainfall

Most areas of the country receive generally adequate rainfall which varies from 500 to 700 mm per annum in the mainly pastoral areas in the north-east to up to 2 000 mm in the Ruwenzori Mountains in the South West and along the slopes of Mount Elgon in the East. Rainfall is mainly bi-modal allowing two crops to be grown under rain-fed conditions each year in most districts. In the dry north-east one crop is grown per year. In Kitgum District one food crop is grown during the long rains from March to June with a cash crop being grown in the second season.

The Normalised Difference Vegetation Index (NDVI) reveals that in 2006 a pattern of above-average vegetation development dominated across most of Uganda. Areas where conditions have been relatively worse than average so far in 2006 include areas of northern Uganda. This was generally borne out by field visits and interviews. Figures 1 indicate the monthly rainfall performance of selected sites in the country.

Figure 1. Uganda: Monthly rainfall (in mm) in selected areas in 2006 compared with 2005 and average (1997-2005)

3.2  Crop Production

Crop production data as provided by the Uganda Bureau of Statistics for 2002 - 2006 are reported in Table 2. Data for a particular calendar year include those pertaining to the long rains season (crops harvested in July-August of the year in question) plus those pertaining to the following short rains season (usually harvested in December of the year to February of the following year). This practice lacks correspondence with marketing and consumption reality. While the output of the long rains season may be consumed or marketed in the same yea, the short rains season production is available for consumption and marketing in the following year. Unfortunately, data are maintained only as shown in Table 2 and seasonal distribution is not available. Overall, the long rains season is reported to account for about 70 percent of food crop production except for cassava and bananas which are produced throughout the year. It is very important that agricultural data be collected and maintained by season.

Discussions with government officials, representatives of development agencies, and NGOs, indicate that the official data concerning certain crops are overestimates in certain cases and underestimates in others. Official figures show a generally upward trend in maize area. Yields of cassava and sweet potato seem rather low at 13 tons/ha and 4.3 tonnes/ha, respectively, compared with the 1990/91 Census of Agriculture which reported cassava yields of 27.2 tonnes/ha, and sweet potato yields of 8.1 tonnes/ha. There is a need for a detailed yield survey of all crops.

Table 2. Uganda Crop Production: 2002-2006 (Area in ‘000s hectares; yield in kgs/ha; production in ‘000s tonnes)

4. FOOD SUPPLY SITUATION

4.1  Market prices

Food prices have generally been steady with a gentle overall increase in the last 10 years, with the exception of Maize in Gulu. Figures 2–4 indicate average monthly prices of some staple crops (matoke, cassava flour and maize flour) in three major centres over the last ten-years period (1997-2006).

Average monthly prices of matoke (plantain) are almost double in Gulu as compared to Mbarara (one of the main production areas).
The trend line indicates a two-third increase in prices for all three markets.

Figure 2: Uganda - Average monthly prices of matoke in selected markets (July 1997- July 2006) NUSh/kg

Figure 3 indicates that prices of cassava flour have shown a declining trend for Mbarara while exhibiting an increase of more than 60 percent in Gulu in the last 10 years. The trend in Kampala, on the other hand, indicates little change for the same period. Cassava is a major staple food in Uganda, consumed either in dried flour or fresh form. Its importance as a contribution to food security outweighs its role as an income generating commercial crop, although increased marketing of the crop can be observed. The current market situation is characterized by glut, with very low farm gate prices. Farmers only receive approximately 15 – 25 percent of the final retail price in Kampala, which is the country’s most important urban market. In common with other non-traditional export agricultural crops, factors that contribute to this situation include the lack of economies of scale at producer and retailer levels, marketing and transaction cost inefficiencies in transport, processing, and post-harvest handling. As compared to dry cassava, the marketing chain for fresh roots is more streamlined, which is primarily due to the latter’s perishability.⁴

Figure 3: Uganda-Average monthly prices of cassava flour in selected markets (1997-2006) NUSh/kg

Maize is not a traditional staple food crop for Uganda’s population but it plays an important part in the rural and urban diet, and has the potential to become more popular. Following the liberalisation of the grain sector, there is no significant policy, regulatory or institutional constraints to the development of the sector. However, in order to realize the potential to develop a vibrant domestic and export market, it will be necessary to institute a formal maize marketing structure. This will involve finance for investment and working capital, the establishment of national standards, and a suitable regulatory framework for the introduction of an authoritative price determination point, e.g., a commodity exchange, and warehouse receipt financing techniques.

Figure 4: Uganda - Average monthly prices of maize flour in selected markets (1997-2006) NUSh/kg

The price of maize flour has a shown a relatively significant increase in Gulu - more than double – in the last 10 years. By contrast, a modest increase is registered in Mbarara and Kampala for the same period. Currently, prices are almost similar in all three markets.

4.2  National food supply demand situation in 2006⁵

Uganda’s estimated staple food supply/demand balance for the 2006 is summarised in Table 3. It is based on production estimates as given in Table 2. Further assumptions include:

• The estimated 2006 population is 27.36 million as explained in Section 2.3.

• Over 85 percent of the calorie intake in Uganda is typically derived from cereals, roots and tubers, pulses, oil-seeds, and plantains. The balance comes from an assortment of fish, meat, eggs, milk, etc.

• The average per caput/annum consumption of food used in this exercise is as follows: cereals 75 kg; pulses 26 kg; roots and tubers 210 kg; Matoke (plantains) 161 kg. These figures are not norms based on any nutritional standards but have been derived from estimated apparent consumption in recent years. These estimates are used in the absence of more reliable data on consumption norms. It is suggested that studies be undertaken to establish consumption norms.

• The Government does not maintain food stocks. Some farmers and traders are known to carry some stocks of which, however, there are no reliable estimates. In response to the larger production levels, a stock build up is estimated.

• Seeding rates used are: maize 25 kg/ha; finger millet 8 kg/ha; sorghum 10 kg/ha; rice 100 kg/ha; wheat 110 kg/ha; beans 60 kg/ha; peas average of 28 kg/ha, and Irish potatoes 2 000kg/ha

• Estimates of crop production are “economic” production, i.e., allowance has already been made for post-harvest losses. This is indicated under Table 3.2 B of the 2006 Statistical Abstract

• Matoke (plantain), cassava and Maize are used to a significant extent for feed and other purposes such as industrial use.

• Estimates for exports, particularly of maize, are computed from several sources, including the Regional Agricultural Trade Information Network (RATIN).

• Imports usually include rice and small amounts of wheat.

Table 3. Uganda Food Balance Sheet 2006 (January-December) ('000 tonnes)

The above balance sheet reveals the food outlook at the national level is apparently satisfactory for 2006. But there are food-deficit areas in several northern and north-eastern districts due to production problems ensuing from civil insecurity, displacements and cattle rustling, where substantial numbers of people face serious food shortages and are in need of food assistance.

It appears that the situation of Ugandan agriculture is one of immense potential that remains grossly underdeveloped. With the population increasing at over 3.4 percent per annum the nation will not be able to avoid food problems in years to come unless efforts are urgently made to modernize agriculture. Given appropriate policies and approaches the nation can in fact produce substantial food surpluses for export. But for that to happen, emphasis will need to be placed on crops such as maize and beans that have export markets. In such an export focused approach care needs to be taken first to encourage and facilitate adequate production of different food crops for domestic consumption. Moreover the issue of access to food will also need to be addressed by facilitating household food production and/or enhancing household food purchasing capacity through employment generation including outside agriculture.

4.3  Poverty and food insecurity

Uganda registered increased literacy and life expectancy rates and a reduction in the number of people living in absolute poverty from 56 percent in 1992 to 38 percent in 2004. However, it ranked 144th out of 177 countries in the UNDP Human Development Index for 2005. Despite Uganda’s fertile soil and favourable climate, five percent of rural households continue to experience food insecurity. The economy is challenged by prolonged civil strife, high population growth and growing disparity in income distribution.

Since the mid-1980s, northern Uganda has experienced conflict and insurgency as a result of rebel activity, especially in the Acholi sub-region, and cattle rustling in the Karamoja region in the northeast. These conflicts are fuelled by a combination of support from external forces, proliferation of small arms in the region, poverty and, in Karamoja, banditry and cyclic drought.

In 2006, after 20 years of civil conflict, 1.45 million displaced persons, 165 000 refugees and other vulnerable persons receive food assistance. Traditional coping mechanisms among displaced people are exhausted and cyclic droughts affect household food security, especially in the northeast. Malnutrition and pockets of hunger and food shortages continue to affect food security in Uganda. Insecurity in the north and east, droughts and the presence of refugees in West Nile and western Uganda exert significant pressure on agricultural populations.

The national HIV/AIDS prevalence rate peaked at around 15 percent among all adults, and exceeded 30 percent among pregnant women in the cities. At the end of 2005, adult prevalence was estimated at 6.7 percent, and an estimated one million Ugandans were living with HIV/AIDS, according to UNAIDS/WHO.⁶ The impact of HIV/AIDS is felt in the education and agricultural sectors, and in households, where there are increased expenses and reduced incomes.

For Uganda to escape the poverty trap and ensure security and stability, the speedy resolution of conflicts and the addressing the root causes of conflict are necessary. Though peace is a necessary pre-condition for the reduction of poverty and improvement of food security it is not the only one. The consolidation of the peace process might be the starting point for the achievement of sustainable food security in all of Uganda, but progress towards recovery and development is unlikely to be linear. Emergency, recovery and development situations are likely to coexist in Uganda for several years to come. In order to pre-empt conflict, priority strategic objectives should include increasing access to food, credit, jobs, markets and basic services, and achieving a more equitable geographical and sectoral allocation of public resources, as well as reducing chronic and transitory food insecurity. Improvements in agriculture – including both crop and livestock production – will be central to achieving broad-based improvements in well-being.

1. Sources of data and information for this section include: Statistical Abstract and other reports of the Uganda Bureau of Statistics, Ministry of Agriculture, Animal Industry and Fisheries, EIU reports.

2. Budget Speech for Financial year 2006/2007, Minister for Finance Planning and Economic Development, June 2006

3. This section draws heavily from the following reports: Framework for the development of agricultural statistics in Uganda, Uganda Bureau of Statistics September 2000; Recent Changes in Agricultural Output in Uganda, MAAIF Policy Brief No.1, June 2006; Proposal for Support to Strengthen the Statistics Unit, MAAIF, Agricultural Planning Department, July 2006

4. Transaction Cost Analysis – The Natural Resources Institute and The International Institute of Tropical Agriculture, 2002.

5. Sources of parameters and basic data used include: FAO food balance sheet, Regional Agricultural Trade Information Network (RATIN); and consultations with knowledgeable people at central and district levels in Uganda.

6. UNAIDS/WHO 2006 Report on the global AIDS epidemic.