Agriculture perfomance in uganda report, 2013

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Performance of the Agricultural Sector in Uganda - Case Study of Donor-Funded Projects
CaseStudyof Donor-FundedProjects
Agriculture Financing and Sector
Perfomance in Uganda
C
S B A G
Budgeting for equit
y

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Performance of the Agricultural Sector in Uganda is published by the
Civil Society Budget Advocacy Group (CSBAG) supported by Actionaid Uganda
© 2012 c/o
Forum for Women in Democracy (FOWODE)
P.O. Box 7176, Kampala
Tel: +256-41-286063
E-mail: fowode@fowode.org
Web www.fowode.org
All rights reserved. No part of this publication may be reproduced, or
reprinted in any form by any means without the prior permission of the
copyright holder. Nevertheless, CSBAG and Actionaid Uganda encourage
its use and will be happy if excerpts are copied and used. When doing so,
however please acknowledge CSBAG and Actionaid
Acronyms and Abbreviation 4
Glossary 5
Acknowledgements 6
Foreword 7
Chapter 1 Introduction 10
1.1 Overview 10
1.2 Study Objectives 11
1.3 Methodology 12
1.4 Report Structure 14
Chapter 2 Agriculture Sector Performance 15
2.1 Introduction 15
2.2 Growth trends 16
2.3 Financing and expenditure trends 17
2.4 Delivery of key agricultural services 19
Table of Contents
C
S B A G
Budgeting for equit
y
Forum for Women in Democracy
Chapter 3 Performance of Completed Agricultural Loans 27
3.1 Vegetable Oil Development Project 27
3.2 Agricultural Improved Rice Production 31
Chapter 4 Performance of Ongoing Agricultural Loans 36
4.1 Creation of Tsetse and Trypanomiasis Free Areas 36
4.2 Farm Income Enhancement Project –
Irrigation Component 39
Chapter 5 Conclusions and Recommendations 42
5.1 Conclusions 42
5.2 Recommendations 47
References 50

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ACF Agricultural Credit Facility
Ag HH Agricultural Household
ADF Agricultural Development Fund
ATAAS Agricultural Technology and Agricultural Advisory
Services
CAADP Comprehensive Africa Agricultural Development Program
CDO Cotton Development Organization
CSBAG Civil Society Budget Advocacy Group
CSO Civil Society Organization
DDA Dairy Development Authority
DSIP Development Strategy and Investment Plan
FIEFOC Farm Income Enhancement Project
FOWODE Forum for Women in Democracy
FSF Food Security Farmer
GDP Gross Domestic Product
GOAR Government Outlays Analysis Report
GoU Government of Uganda
KCCA Kampala City Council Authority
KOPGT Kalangala Oil Palm Growers Trust
MAAIF Ministry of Agriculture, Animal Industry and Fisheries
MDG Millennium Development Goal
MFPED Ministry of Finance, Planning and Economic Development
MOF Market Oriented Farmer
Acronyms & Abbreviation
MTEF Medium Term Expenditure Framework
NAADS National Agricultural Advisory Services
NAP National Agricultural Policy
NARI National Agricultural Research Institute
NARO National Agricultural Research Organization
NARS National Agricultural Research System
NDP National Development Plan
NEPAD New Partnership for Africa’s Development
PEAP Poverty Eradication Action Plan
PMA Plan for Modernization of Agriculture
SACCO Savings and Credit Cooperative Society
STATFA Creation of Tsetse & Trypanosomiasis Free Areas
UA Unit of Account
UBOS Uganda Bureau of Statistics
UCA Uganda Census of Agriculture
UCE Uganda Commodity Exchange
UCDA Uganda Coffee Development Authority
UNHS Uganda National Household Survey
VODP Vegetable Oil Development Project
WRS Warehouse Receipt System
ZARDI Zonal Agricultural Research and Development Institute.
Budget Support Mode of financing that involves transfer of financial resources of a development partner to the
consolidated fund following the fulfillment of agreed conditions for disbursement. The funds are
part of the national resource and are appropriated by Parliament. They are used in accordance
with the public financial management system of Uganda
Food Security Farmer Any farmer who is 18 years and above, a practicing subsistence farmer
Off-Budget funds Resource flows that are managed outside the Government systems of planning, appropriation,
budgeting and procurement. Government procedures are generally not used in full in managing
these funds. Includes off budget project aid.
On-budget funds Resource flows that are managed through the country’s public financial management systems
within the MTEF and approved by Parliament. Includes on budget project aid.
Project Support Aid modality that entails agreement between the development partner or donor and
Government on a set of inputs, activities and outputs to reach specific outcomes within a defined
time frame, area and budget. This approach allows use of the donor accounting systems.
Technical Assistance Involves the transfer of ideas, knowledge, practices, technologies or skills to foster economic
development. Usually for policy development, institutional development, capacity building and
project or programme support.
Glossary

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This report is a joint undertaking of the members of the Civil
Society Budget Advocacy Group (CSBAG) which since 2004
has advocated for pro poor and gender sensitive policies and
budgets. Several individuals and organizations have helped
shape the outcome of this report and these include Actionaid
Uganda, Forum for Women in Democracy (FOWODE), Daniel
Lukwago, Frederick Kawooya, Francis Akorikin, Sophie Kyagulanyi,
and Dr. Bbaale Edward who reviewed this report and provided
technical feedback.
This report was produced under supervision of Julius Mukunda
whose technical insight guided the research team at different
stages which greatly enriched this report.
Special thanks go to Actionaid Uganda whose financial and
technical support enabled the successful production of this
report.
To effectively engage the Government of Uganda
to reverse the trend, and enhance investment
in the sector, the Civil Society Budget Advocacy
Group [CSBAG] in 2012 deemed it necessary to
undertake a study that will facilitate a deepened
understanding on how resources are being
used within this sector. Using case studies of
four donor funded projects -the Vegetable Oil
Development Project, Agricultural Improved Rice,
Production Creation of Tsetse and Trypanomiasis
Free Areas, Farm Income Enhancement Project –
Irrigation Component, The study provides an in‐
depth assessment of how agricultural loans have
been applied in Uganda to improve agricultural
performance. It further analyzes the spending
patterns and service delivery within agriculture
and brings out the salient issues for action.
There are significant factors affecting the sector’s
performance that are highlighted in this study
that need redress and, it is our hope that
recommendations made in this study will result
into concrete actions in improving agricultural
financing and that different actors including
the Civil Society, Government, Donors and the
famers will work collectively towards promoting
the CAADP agenda of reaching a higher path
of economic growth through agriculture-led
development in Africa .
Julius Mukunda
Coordinator-Civil Society Budget Advocacy Group
Acknowledgements Foreword
Although agriculture contributes greatly to the economy and a
signiﬁcant proportion of the poor depend on it, Public expenditure
in this sector has declined significantly over the past financial
years; with the share of the sector ranging from between 3-4%
of the national budget causing a decline in Uganda’s agricultural
output and productivity. Uganda’s agricultural growth rate is still
below the 6 percent annual growth target of the African Union’s
Comprehensive Africa Agricultural Development Program (CAADP).

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Study Context
External assistance flows to Uganda have aver-
aged about US$ 760 million annually between
2001 and 2010. The agricultural sector attracts
part of the donor funding for enhancing various
services to farmers. Of concern, however is the
slow disbursement of donor funds in the sector
which has led to slow implementation of donor
funded projects.
The overall aim of this study was to assess the
performance status of agricultural services in
Uganda and utilization of resources to implement
programmes and policies. The study involved
analyzing the performance of four loans (donor
funded projects) in terms of planning, budgeting
and implementation. The extent to which gender
issues were addressed in these projects was as-
sessed. The study used secondary data sources
complemented by primary information collected
by the Ministry of Finance, Planning and Econom-
ic Development.
Key conclusions
1) The budget allocation to agriculture as a
share of the national budget remains low, at
3.2% in FY 2012/2013. Most funds are dis-
bursed as small discrete projects whose con-
tribution is not impactful and nor sustainable.
2) The agricultural sector attracts less than
10% of the donor assistance in Uganda that
is channeled to the development budget. A
substantial part of external support to the
sector is in form of Technical Assistance
policy and institutional development yet the
MAAIF continues to lack sufficient implemen-
tation capacity.
3) A major challenge is the slow disbursements
of donor funds in the sector in turn leading
to slow implementation of donor funded
interventions. In FY 2011/2012, 74% of the
total loan portfolio equivalent to US$ 341.55
remained undisbursed.
4) The four case study loans bring out many
factors that singularly or in combination slow
implementation of donor funded projects.
For example, the poor design of the FIEFOC
irrigation project slowed funds disbursement
and project implementation. ADB Funded
projects generally have long bureaucratic
procurement processes that delay disburse-
ment of funds. The Government of Japan and
FAO took lead in the implementation of the
Agriculture improved Rice Production proj-
ect which led to distribution of poor quality
inputs, the bulk of funds being used in recur-
rent expenditures indicative of poor alloca-
tive efficiency and low project sustenance.
5) The VODP case study illustrates that they are
loans in the agricultural sector that perform
well with regard to absorption of allocated re-
sources, timely implementation and achieve-
ment of the intended outcomes.
6) The FIEFOC case study illustrates that some
projects are complete failures because of
low implementation/institutional capacity in
the Ministry of Agriculture, Animal Industry
and Fisheries. Although funds absorption
was high, it was for the wrong reasons, with
87% of the resources being spent on general
operating expenses without any tangible out-
come.
7) Whereas planning and project design is usu-
ally done jointly between MAAIF and donor
agencies, there are instances where the do-
nor takes lead which leads to low ownership
of interventions by the beneficiaries and less
project impact.
8) Generally, gender mainstreaming is not pri-
oritized in agricultural loans.
9) Delivery of agricultural services such as exten-
sion, credit and research is ongoing although
reach to majority of farmers remains low. Ac-
cess to extension services remains low, with
80% of the agricultural households having
not been visited by an extension worker in
the recent agricultural survey of 2008/2009.
10) Whereas the bulk of agricultural service deliv-
ery is undertaken at local government level,
the district and sub-county officials are not
adequately involved in the project design,
planning and budgeting stages. Often, they
brought late into the implementation stage
which lessens ownership, supervision and
sustainability of the donor funded projects.
Executive Summary Key Recommendations
1) The budget allocation to the agricultural
sector needs to be stepped to at least 10% of
the national budgetary resources to expand
delivery of agricultural services in Uganda.
This could include deepening of delivery of
extension and research services to ensure
that farmers access and use improved inputs
and technologies to bridge the production
and productivity gap at farm level. Sufficient
counterpart funding should be provided in
adequate and a timely manner for marching
with the donor funds.
2) The way donor funded projects in the
agricultural sector are packaged should
be reviewed to enhance reach, impact and
sustainability. Rather than soliciting for
small discrete projects that have limited
impact, the Government should focus on
encouraging donor funded projects that are
larger and impactful with adequate reach
geographically and in terms of number of
beneficiaries targeted and quantity of inputs
and technologies provided.
3) Some level of flexibility in the prior
conditions and minimal conditionalities
imposed by donors for project trigger
should be espoused as a means of avoiding
unjustifiable low absorption of funds. It is
critical that the prior conditions are well
negotiated and are easily implementable.
Government should improve its procurement
and accountability systems so that donors
have a high level of trust in them and can use
them instead of the lengthy donor systems.
4) The Government should take lead in the
planning, designing and implementation of
donor funded projects to enhance ownership
and proper supervision of the projects. The
Government should have an active role in
budgeting and utilization of the donor funds.
5) Gender planning, budgeting and monitoring
should be core to all donor projects. Gender
and equity budgeting should go beyond
seeking involvement of women and other
marginalized groups to promoting equitable
access and use of agricultural services
and monitoring progress made thereafter.
Clear gender mainstreaming strategies
should form part and parcel of the project
implementation plan.
6) The institutional and implementation
capacity of the agency that is to implement
the donor funded projects should be
properly scrutinized at planning stage and
beefed up before project commencement.
Where possible, the implementing agency
can partner with other Government and
non-Government agencies to scale up
the implementation capacity to march the
project requirements.
7) Value for money in donor funded projects
should be encouraged. Expenditures should
be on critical areas that address the project
objectives and give results. Poor allocative
efficiency whereby the bulk of resources
are spent on consumptive or recurrent
unproductive expenditures should be
discouraged.
8) There is a need for the Government to
encourage and support the development of
public private partnerships in the delivery of
agricultural services in Uganda as a means to
fill the gap. For example, Government could
partner or support farmer associations,
NGOs and private sector players to scale up
good models of extension that are littered in
different parts of the country.
9) District and Sub-county officials of the
respective Local Governments that are
to be involved in implementation of a
donor funded project should be involved
early in the project design, planning and
execution of the project. This will enhance
project ownership by the beneficiaries
and sustenance of the interventions and
outcomes.

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Agriculture loans in this report
refer to funds1
that are received
by Government of Uganda (GoU)
from external donors to finance
key interventions within the sector.
The report analyzes the spending
patterns and service delivery within
agriculture and uses selected case
studies of donor financed projects to
bring out the salient issues for action.
The agricultural sector in Uganda
primarily encompasses crops,
livestock, fisheries and forestry.
Donor funds that are channeled
in the sector are either under the
budget or project support aid
modality. In recent years, external
financing from donors accounts for
about 25% of the budget and 6%
of Gross Domestic Product (GDP)2
.
External assistance flows to Uganda
have averaged about US$ 760 million
annually between 2001 and 20103
.
1 These may be loans , grants or technical
assistance.
2 MFPED, 2012b.
3 MFPED, 2012d.
There are also substantial official
resource flows that are delivered
to projects but managed outside
the Government systems. The bulk
of donor funds in agriculture are
on-budget. For example, during
FY 2010/2011, the sector received
US$ 58.30 million on budget and
US$ 16.07 million off budget. The
off budget funds were provided by
USAID, UK, Norway and FAO4
. The
study focused on donor funds that
are on-budget.
The agriculture sector attracts
less than 10% of the total donor
assistance for the development
budget. In FY 2011/2012, the sector
attracted 8% of the donor assistance
(Figure 1.1). The donor funding is
aimed to complimenting Government
efforts in number of areas including:
improving control and mitigation
capacity of crop pests and livestock
diseases; deepening access to
markets; capacity for research and
generating new technologies, value
4 MFPED, 2012c.
addition and enhancing compliance
with food safety requirements in the
export markets. A substantial part
of external support to agriculture
comes in form of technical
assistance for policy and institutional
development and capacity
enhancement. The Government
still faces a challenge of capturing
all donor and technical assistance
as some of the funds are handled
directly by the donors.
Of concern, however, is the slow
disbursement of donor funds in
the sector which has led to slow
implementation of donor funded
interventions. Agriculture is one of
the sectors with large undisbursed
loan commitments (Figure 1.2).
Note that loan disbursements to
agriculture are channeled mainly
to MAAIF and its agencies but also
a significant fraction is earmarked
to agricultural programmes under
Ministry of Local Government (MOLG)
and districts.
IntroductionChapter 1
1.1 Overview
This is a report of a
research commissioned
by the Civil Society
Budget Advocacy
Group on agricultural
sector performance in
Uganda. The motivation
for the study is rooted
in the need to get a
clearer picture of how
agricultural loans have
been applied in Uganda
to improve agricultural
performance.
Figure 1.1: Allocation of Donor Assistance to the
Development Budget for FY 2011/2012
Figure 1.2: Disbursed and undisbursed loan commitments across sectors
Source: MFPED, 2012b.
During FY 2011/2012, the agriculture sector had
a total loan portfolio equivalent to US$ 466.80
million; of this amount, US$ 119 million (or 26%)
had been disbursed and US$ 341.55 million
remained undisbursed. Joint reviews between
MFPED and Development partners suggest a
number of explanatory factors for this scenario5
:
• Inadequate and untimely release of
Government counterpart funding
• Complex procurement procedures that are
required by donors
• Capacity constraints with institutions relating
to personnel, systems and procedures
• Poor design of projects
5 MFPED, 2012b.
Source: MFPED, 2012b.
• New loans commitments that are contracted
but take long to become effective.
• Some funds not directly controlled by
Government; expenditure is by the
development partners.
This study used the case studies to draw out
lessons on the key constraints to utilization of
donor finances in the agricultural sector.
1.2 Study Objectives
The main purpose of the study was to assess
the performance status of agricultural services
(extension, research, credit, finance, markets,
food security) in Uganda and utilization of
resources to implement programmes and
policies.
The study had 7 objectives:
1) Provide an overview of the sector
performance, highlighting key priority issues.
2) Identify four Government loans – two
that had ended and another two whose
implementation was still ongoing under the
agricultural sector.
3) Review the performance of the completed
agricultural loans in terms of budgeting,
planning and implementation.
4) Identify key pertinent gender issues and
how they were addressed in the completed
projects.

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5) Make recommendations on how the projects performed and
improvements for future projects.
6) For the ongoing projects, analyze how the projects are performing
based on set benchmarks.
7) Make recommendations for the ongoing projects regarding how to
address gender issues.
Table 1.1: Methodological approach to study objectives
Objective Approach
1. Provide an overview of the sector
performance, highlighting key priority
issues.
In addition to macro level trend data in the agricultural sector, the areas that were highlighted in
the overall purpose of the study were analyzed, namely: extension, research, credit, finance, markets
and food security. Desk review of secondary data sources at Uganda Bureau of Statistics (UBOS), MAAIF, MFPED,
NAADS Secretariat, PMA Secretariat, FOWODE, VEDCO, Action Aid, Oxfam, DRT, World Bank.
2. Identify four Government loans –
two that had ended and another
two whose implementation was still
ongoing under the agricultural sector
Reviewed secondary data in MFPED loans and grants reports; Approved Estimates; Public
Investment Plans and MAAIF Output Oriented Budgeting Tool (OBT); Ministerial Policy Statements.
Other details are below.
3. Review the performance of the
completed agricultural loans in
terms of budgeting, planning and
implementation
Reviewed primary data that was collected by the Budget Monitoring and Accountability Unit (BMAU)
and budget monitoring reports. Also reviewed project documents, including evaluation reports.
4. Identify key pertinent gender issues
and how they were addressed in the
completed projects.
Authors’ analysis of all available primary and secondary data and information. The gender issues
were identified within the context of the analysis and not as a separate section.
5. Make recommendations on how the
projects performed and improvements
for future projects.
Authors’ analysis of all available primary and secondary data.
6. For the ongoing projects, analyze how
the projects are performing based on
set benchmarks.
Reviewed primary data that was collected by the Budget Monitoring and Accountability Unit (BMAU)
and budget monitoring reports. Also reviewed project documents, including evaluation reports.
7. Make recommendations for the
ongoing projects regarding how to
address gender issues.
Authors’ analysis of all available primary and secondary data.
Identification of case study
projects
The first step involved listing all donor
funded projects in Uganda (Annex 1)
from which the case study projects could
be selected. The following criteria guided
project selection:
• Projects must have benefitted from
donor loans; all projects that are
solely Government funded were not
considered.
• Implemented by MAAIF or its
associated agencies for policy
influence.
• Easily accessible data and
information; frequently monitored
programmes.
• Projects that are reported to be
performing well as well as those that
are seen to be performing poorly.
• A mix of donors that funded the
chosen projects
• Different enterprise focus.
• Projects that have public-private
partnership (PPP) investment
components.
On the basis of the above criteria, the
four case study projects that were
selected for analysis were: Vegetable Oil
Development Project (VODP); Creation
of tsetse and trypanosomiasis areas;
Agricultural Improved rice production
and Farm Income Enhancement Project
(FIEFOC) – Agricultural Component (Table
1.2).
Table 1.2: Case Study donor funded projects
No. Project Status of Implementation Key selection criteria
1 Vegetable Oil
Development
Project
First phase completed;
Second phase recently
started.
The focus will be on the
concluded phase.
• PPP implementation arrangement
• Funded by IFAD-GoU
• Reported to be performing well.
• Implemented in Kalangala district and
Northern Uganda. Focus will be on the
Kalangala Component
• Has both a completed and an ongoing
phase.
• Implemented directly by MAAIF
• Focus is on promoting oil palm plantation
agriculture.
• Information easily accessible
2 Creation of
tsetse and
trypanosomiasis
areas
Ongoing • ADB-GoU funded
• Countrywide
• Directly implemented by MAAIF
• Reported to be poorly performing
• Focus on control of trypanosomiasis and
tsetse fly infestation.
• Information may not be easily accessible.
3. Agricultural
Improved rice
production
(NERICA project)
First phase completed
and second phase is near
completion
• Japan-GoU funded
• MAAIF implemented
• Focus on promoting growing of improved
rice varieties, the NERICA types.
• Both good and poor performance
reported.
• Information easily accessible
4 Farm Income
Enhancement
Project – the
Agricultural
Component
Ongoing • ADB-GoU funded
• Focus on rehabilitating four large
irrigation schemes.
• MAAIF implemented and recently
transferred to MWE due to reported poor
performance
• Information fairly accessible
1.3 Methodology
The study relied on secondary data sources, including primary information
that had been collected by MFPED on the selected donor projects. Table 1.1
summarizes the approach used in addressing each of the study objectives.

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1.5 Report Structure
The report is structured in five chapters:
• Chapter 1: Introduction
• Chapter 2: Agricultural Sector Performance
• Chapter 3: Performance of Completed
Agricultural Loans
• Chapter 4: Performance of Ongoing
Agricultural Loans
• Chapter 5: Conclusions and
Recommendations
The Civil Society Budget Advocacy
Group (CSBAG) has since 2004
brought together CSOs at national
and local level to advocate for
budgets that address the needs of
poor women and men.
Agriculture is categorized as a primary
growth sector. At the sector level, two key
policy documents guide implementation:
the National Agricultural Policy (NAP)
which is still under development and
the MAAIF Development Strategy and
Investment Plan (DSIP) 2010/11 –
2014/15.
The overall policy objective of the
NAP is to promote food and nutrition
security and household incomes
Agriculture Sector PerformanceChapter 2
2.1 Introduction
A key objective of the study was to provide an
overview of agricultural sector performance to
contextualize the study findings. At the macro level,
agricultural sector interventions are guided by the
National Development Plan (NDP) that aims to enhance
agricultural production and productivity as a means of
increasing household incomes and promoting equity.
through coordinated interventions that
focus on enhancing productivity and
value addition, providing employment
opportunities, and promoting
domestic and international trade. The
Development Strategy and Investment
Plan (DSIP) is the medium term strategic
plan for MAAIF. The DSIP has two high
level objectives or intended outcomes: (1)
Rural incomes and livelihoods increased;
(2) Household food and nutrition security
improved.
Figure 2.1: Distribution of working population in Uganda in Uganda by sector (%)
The largest proportion of the working population in Uganda
(66%) derives its livelihood from agriculture (Figure 2.1).
Of policy concern however is why such a large population
engaged in agriculture contributes only 14% to the national
output, indicative of low factor productivity. This issue is further
explored in section 2.4 below.
Source: UNHS 2009/10

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The Uganda Census of Agriculture (UCA)
2008/091
estimated that the number of
agricultural households in Uganda are 3,945,753.
Out of these, the Western Region had the
highest (28.5%), closely followed by the Eastern
Region (28.1%), Northern Region (22.9%) and
Central Region (20.5%). Of the 3,575,065
agricultural households that responded to the
census, 2,821,070 or 78.9% were male headed
households and 753,994 or 21.1% were female
headed households (Figure 2.2).
1 UBOS, 2010.
The rest of this chapter discusses sector
performance from three key dimensions: (1)
Growth trends (2) Financing and expenditure
trends and (3) Delivery of key services.
2.2 Growth trends
Uganda’s economy grew at an average GDP
growth of 7.8 percent between FY 2005/06
and FY 2010/11, and slowed down to 3.2
percent in FY 2011/2012 as a result of high
global oil and commodity prices, drought,
power shortages, exchange rate volatility and
Table 2.1: Sectoral Growth Rates and Shares in GDP 2003/04 – 2011/12
Sector 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12
Sector Growth Rates
Agriculture 1.6 2.0 0.5 0.1 1.3 2.9 2.4 0.7 3.0
Industry 8.0 11.6 14.7 9.6 8.8 5.8 6.5 7.9 1.1
Services 7.9 6.2 12.2 8.0 9.7 8.8 8.2 8.4 3.1
Sector Shares in Total GDP at Current Prices
Agriculture 23.8 25.1 18.3 16.9 15.8 15.1 14.7 13.9
Industry 22.9 23.5 24.8 25.1 25.1 24.8 25.0 25.3
Services 47.4 45.4 49.6 49.6 49.9 50.7 51.6 52.4
Source: UBOS Statistical Abstracts for various years; MFPED, 2012; MFPED, 2011; GoU, 2010.
2.3 Financing and expenditure trends
The Ministry of Agriculture, Animal Industry and
Fisheries (MAAIF) is the lead agency coordinating
agricultural financing both at the Central and
Local Government level. At Central Government
level, financing is handled through 7 Votes
namely: (i) MAAIF (ii) NAADS Secretariat (iii)
Cotton Development Organization (CDO) (iv)
Uganda Coffee Development Authority (UCDA)
(v) National Agricultural Research Organization
(NARO) (vi) Dairy Development Authority (DDA)
and (vii) Kampala City Council Authority (KCCA)
Grant. At the Local Government level, spending
for agriculture is majorly channeled through
3 grants: (i) District Agricultural Extension (ii)
NAADS (Districts) (iii) Production and Marketing
Grant. Public funds include GoU and donor
financing.
The budget allocation to agriculture as a share to
the national budget remains low (Table 2.2) and
stands at 3.2% in FY 2012/2013 which constrains
agricultural spending6
.
6 At the African Union Assembly in Maputo in July 2003,
Heads of State including the Ugandan President, committed
to allocating at least 10% of national budgetary resources to
agriculture within 5 years of the meeting date.
high inflation levels2
. Although agriculture
remains very critical for spurring national
growth, the share of agriculture in total GDP
has declined over the years from 23.8 percent
in FY 2003/04 to 13.9 percent in FY 2010/11.
Whereas the industrial and services sectors
have in some years hit a 10% growth rate, the
growth in the agricultural sector has consistently
remained dismal at 3% (Table 2.1)3
.
The growth of the agricultural sector is still below
the National Development Plan (NDP) annual
growth target of 5.6 percent and the 6 percent
growth rate that is required for effective poverty
reduction. Research by IFPRI4
demonstrated
that if agriculture in Uganda grew at 6 percent
per annum, the national poverty headcount
level would decline from 31.1 percent in 2005
to 19.9 percent in 2015, below the 28 percent
Millennium Development Goal (MDG) target.
Uganda’s agricultural growth rate is also below
the 6 percent annual growth target of the African
Union’s Comprehensive Africa Agricultural
Development Program (CAADP)5
.
2 MFPED, 2012.
3 MFPED, 2012.
4 Benin, 2007.
5 The CAADP is an initiative of the New Partnership
for Africa’s Development (NEPAD) aimed at helping African
countries reach a higher path of economic growth through
agriculture-led development.
Figure 2.2: Percent distribution of Agriculture Household Heads by Sex and Region
Source: UBOS, 2010.

1918
Table 2.2: Sectoral Budget Allocations – FY 2009/10 – FY 2011/12
Sector 2009/10 Approved 2010/11 Approved 2011/12 Approved
Allocation
USh bn
% Share
of Budget
Allocation
USh bn
% Share
of Budget
Allocation
USh bn
% Share
of Budget
Agriculture 310.7 4.7% 366 5.0% 434.0 4.5%
Lands, Housing & Urban Development 20.3 0.3% 24 0.3% 32.4 0.3%
Energy & Mineral Development 698.9 10.5% 391 5.3% 1,320.0 13.7%
Works & Transport 1,214.8 18.2% 1,038 14.1% 1,290.8 13.4%
Information & Communications Technology 9.5 0.1% 12 0.2% 12.1 0.1%
Tourism, Trade & Industry 47.8 0.7% 49 0.7% 53.2 0.6%
Education 1,079.6 16.2% 1,243 16.8% 1,416.3 14.7%
Health 737.7 11.0% 660 8.9% 799.1 8.3%
Water & Environment 172.2 2.6% 250 3.4% 271.3 2.8%
Social Development 32.5 0.5% 32 0.4% 50.4 0.5%
Security 487.7 7.3% 649 8.8% 974.9 10.1%
Justice, Law & Order 359.7 5.4% 532 7.2% 531.6 5.5%
Public Sector Management 705.0 10.6% 835 11.3% 986.2 10.2%
Accountability 462.9 6.9% 492 6.7% 543.6 5.6%
Legislature 121.8 1.8% 163 2.2% 162.7 1.7%
Public Administration 217.0 3.2% 302 4.1% 231.8 2.4%
Interest payments due - - 340 4.6% 519.6 5.4%
Grand Total 6,678.3 100.0% 7,377 100.0% 9,630.0 100.0%
Source: MFPED, 2010a; MFPED, 2011a; MFPED, 2012; DRT, 2011.
Figure 2.3: Budget allocations within the
Agricultural Sector FY 2011/12
Table 2.3: On-budget and Off-budget Project Aid to Agriculture (US$ millions)
Source: MFPED, 2012a.
Sector
On-budget Off-budget
Actual Projections Actual Projections
2009/10 2010/11 2011/12 2012/2013 2009/10 2010/11 2011/12 2012/2013
Agriculture 68.07 58.30 94.47 100.01 9.51 16.07 23.89 37.20
Total all
Sectors
641.59 515.62 867.36 687.66 399.55 397.30 451.55 402.06
Agric Share
%
Source: MFPED, 2012c – Information
submitted by Development partners by
February 2012.
2.4 Delivery of key
agricultural services
2.4.1 Extension
The Government is offering agricultural
extension and advisory services to farmers
mainly through the National Agricultural
Advisory Services (NAADS) programme,
complemented by general extension services
by the District and Sub-county Production
Offices. Other farmers pay to access private
sector service providers, especially in the
livestock sector. The main objective of the
NAADS programme that has been under
implementation since 2001 is to “ensure that
farmers move from subsistence to market
oriented and eventually commercial farming”.
Close to a half of agricultural spending (42.4%)
is earmarked to the NAADS programme that
offers advisory services to farmers, followed by
policy and institutional development by MAAIF
and research and technology development by
NARO (Figure 2.3). Most of the donor financing
comes in discrete projects whose contribution
to the overall sector outc omes cannot be easily
ascertained or measured. A significant amount of
aid also comes off budget and its magnitude and
use is not well captured in Government systems.
Table 2.3 provides a snapshot of project aid to
agriculture in recent years.
The programme is implemented in all
districts and sub-counties of Uganda,
involving provision of advisory services and
inputs to various categories of farmers
and setting up of technology development
sites and research trials. The first phase of
the project ended in 2010 and the second
phase commenced in FY 2010/11 under the
Agricultural Technology and Agri-business
Advisory Services Project (ATAAS). The ATAAS
aims to strengthen the linkages between
NAADS and the National Agricultural
Research Organization (NARO) and increase
agricultural productivity and farmer access to
technology, advice and information.
The NAADS program has enabled farmers
to access inputs and technologies: in FY
2010/11, the programme targeted 100
Food Security Farmers (FSF) and 8 Market
Oriented Farmers (MOFs) per Parish; this
number has gradually come down due to
resource constraints to 30 FSF per parish,
4 MOF per parish and 2 commercializing
farmers per Sub-county. The FSF are

2120
provided with inputs worth UgSh 100,000
including seeds for beans, maize, simsim,
bananas; hoes, goats and fertilizers, among
other items. The MOF are provided inputs worth
UgShs 450,000 mainly to purchase livestock after
they provide co-funding. The commercializing
farmers are receiving about Ugshs 1,200,000
worth of inputs and technologies.
According to the recent agricultural census7
, out
of 3.6 million Agriculture House Holds (Ag HHs)
in Uganda, 680,000 (19.0%) reported having
been visited by an extension worker during
2008/2009. The Western Region had the highest
percentage (29.3%) of Ag HHs that were visited
by an extension worker followed by the Eastern
Region (28.7%) and the Central Region with the
least percentage of 16.9% (Table 2.4). Based
on this evidence, although the Government has
rolled out the NAADS to all districts in Uganda,
access to extension services remains low, with
80% of the agricultural households having not
been visited by an extension worker.
Table 2.4: Distribution of Ag HHs visited by
extension workers by region (%)
Region Ag HHs Ag HHs visited Percentage
Central 715,486 114,559 16.9%
Eastern 1,069,885 194,903 28.7%
Northern 755,701 171,200 25.2%
Western 1,033,992 199,156 29.3%
Uganda 3,575,064 679,818 100%
Source; UBOS, Uganda Census of Agriculture
2008/9
7 UBOS, 2010.
2.4.2 Research and technology
services
Agricultural research and technology services
in Uganda are spearheaded by the National
Agricultural Research Organization (NARO) that
was established by GoU in 1992. In 2005, the
NARO was restructured from being solely a
public entity to encompassing other stakeholders
including non-public service providers. Thus, the
NARO now coordinates the National Agricultural
Research System (NARS). The NARS is offers
client responsive services through the National
Agricultural Research Institutes (NARIs) and Zonal
Agricultural Research and Development Institutes
(ZARDIs).
Agriculture production has improved over the
years with the dissemination of early yielding
and disease resistant crop varieties and livestock
breeds. Examples of high yielding varieties
that have been disseminated include, among
others: Sunflower Sesun 1H & 2H, MM3 Maize,
Groundnut Serenut 5R and 6R, Barley SGS 564
varieties; matooke hybrids with resistance to
Black Sigatoka, weevils, nematodes and banana
bacterial wilt; bean varieties NABE 15 and NABE
16; 6 cassava varities with high resistance to
brown streak disease; NERICA Rice varieties; 7
coffee varieties that are resistant to the coffee
wilt disease; improved varieties for mangoes,
oranges, passion fruits, avocado, tomatoes,
nectarines, apples and pears; essential oil crops
(Centronella Grass and Lemon Grass) and leaf
vegetables. In additional improved breeds of
poultry, cattle, piggery and fisheries have been
disseminated8
.
8 Various NARO reports.
Productivity growth in Ugandan agriculture has
resulted primarily from area expansion and
not from intensification of production or use of
improved varieties that would result in higher
yields. According to MAAIF9
, estimated average
yields in recent years at farm level have been
below those at research stations (Table 2.5).
Table 2.5: Yields of selected crops on farm
and at research stations in Uganda
Crop Yield on farmers’
fields
Yield on research
station
Yield gap (%)
Maize 551 5,000 – 8,000 807 – 1,352
Beans 358 2,000 – 4,000 458 – 1,017
Groundnuts 636 2,700 – 3,500 324 - 450
Bananas 1,872 4,500 140
Coffee 369 3,500 849
Source: MAAIF, 2010f.
The yield gap between average farm yields and
research yields indicates the immerse potential
in farm productivity. Low and inefficient use
of improved inputs is still pervasive among
Uganda farmers and poor land management is a
contributory factor. The Agricultural Technology
and Agribusiness Advisory Services Project
(ATAAS) that was commenced in 2010 aims at
addressing these gaps through closer integration
of research and extension services.
9 MAAIF, 2009.
2.4.3 Agriculture Credit
The Government of Uganda has implemented a
number of reforms since the 1990s to improve
access to agricultural financing. These include:
the Cooperative Societies programme (1992);
the Rural Financial Services Programme (2005),
The Poverty Alleviation Fund (1996), Entandikwa
Scheme (1996), Microfinance programmes
(2003), Prosperity for All (2005) and the Savings
and Credit Cooperative Societies (early 2000s).
However, the formal sector supply of credit for
farming in Uganda remains limited: since 2000,
less than 10 percent of total private sector
credit is allocated to agriculture production and
marketing10 (Table 2.6).
10 Ezra Munyambonera et al, 2012.
In the study carried out by FOWODE TRACING
Agriculture Extension grants in Uganda from a
gender perspective the following was found, that
very few women benefit directly from NAADs due
to the fact that women never own land. Much
as men benefit most of the work is done by the
women still as in the figure 2.4 below.
There is a need for the Government to
encourage and support the development of
public private partnerships in the delivery of
extension services in Uganda as a means to
fill the gap. For example, Government could
partner or support farmer associations, NGOs
and private sector players to scale up good
models of extension that are littered in different
parts of the country.
Figure 2.4:
NAADs
benefactors by
gender in four
districts FY
2009/10
Source:
Computation based
on S/C records
(FOWODE)

2322
Table 2.6: Percentage of Private Credit Distribution through commercial banks by sector
Sector 2003 2004 2005 2006 2007 2008 2009 -11
Agriculture production 2.00 4.08 6.09 3.70 2.60 2.30 6.00
Agriculture marketing 5.00 6.51 3.93 1.60 1.90 2.00 3.00
Mining and quarrying 0.01 0.07 0.06 0.00 0.10 0.30 0.33
Manufacturing 23.00 20.22 20.08 9.10 10.60 9.30 13.00
Electricity and water 5.00 5.89 5.96 4.30 5.40 8.20 0.80
Building and construction 3.00 4.01 3.40 4.50 5.00 11.80 17.00
Whole and retail trade 50.00 59.23 69.23 47.50 48.82 66.10 40.30
Other 0.01 0.00 00.0 29.30 25.58 0.00 19.57
Source: Bank of Uganda (BoU) Monetary Statistics, 2011; Ezra Munyambonera et al, 2012.
In 2009, the Government introduced the
Agricultural Credit Facility (ACF) for provision
of subsidized medium and long term
loans to farmers at a 10% interest rate.
Over 200 farmers have benefitted from
the scheme where resources are mainly
invested in agricultural equipment and value
addition and agro processing machinery.
Funds are channeled to farmers through
commercial banks. The funds have enabled
medium to large scale farmers to expand
their businesses and acquire machinery
for commercializing agriculture. The key
challenges of the ACF relate to i) it cannot be
used for financing production inputs ii) many
farmers not aware of its availability iii) Limited
grace period iv) High interest rate for young
enterprises.
The Government is providing financial
support through the Microfinance
Support Centre Limited (MSCL) to
Savings and Credit Cooperative
Organisations (SACCOs) to disburse
commercial and agricultural loans.
The most recent Uganda Census for
Agriculture 2008/09 shows that
only 36.2% of agricultural household
members had ever received a credit
while 63.8% had never received credit.
Table 2.7: Percent Loan Distribution by
Sector and Region through the MSCL
2005 2006 2007 2008 2009 2010
Agriculture-Northern 4.1 1.6 3.8 1.4 16.6 6.7
Agriculture-Western 1.9 3.6 7.9 21.8 30.6 38.9
Agriculture-Central 0.0 12.9 1.3 7.1 16.1 24.2
Agriculture-Eastern 0.0 1.2 0.9 0.9 3.0 5.7
Commerce and Trade-Northern 16.5 1.3 4.9 6.6 1.5 0.5
Commerce and Trade- Western 20.9 8.5 30.6 20.1 3.8 4.7
Commerce and Trade-central 50.8 49.8 40.6 23.1 12.8 12.0
commerce and Trade- Eastern 5.8 6.5 10.0 4.0 2.7 2.4
Business Development-Northern 0.0 1.0 0.0 0.0 0.8 0.0
Business Development-Western 0.0 5.0 0.1 0.0 4.1 1.6
Business Development- Central 0.0 4.6 0.0 15.0 4.3 1.6
Business Development- Eastern 0.0 3.9 0.0 0.0 3.7 1.7
Total 100 100 100 100 100 100
Source: Microfinance Support Centre, 2010; Ezra
Munyambonera et al, 2012.
Whereas Government has attempted to provide
credit for agriculture, access remains low. The
most recent Uganda Census for Agriculture
2008/09 shows that only 36.2% of agricultural
household members had ever received a credit
while 63.8% had never received credit. Of the
487,000 agricultural household members that
received credit, 309,000 (63.4%) were males
while 179,000 (36.6%) were females. Credit is
more easily accessible to males in agricultural
households in all regions of Uganda than
females (Figure 2.5).
The main reasons for limited access to credit
among females were high interest rates, lack
of collateral, ignorance (poor understanding
of procedures for accessing finance due to
low literacy levels) and unavailability of lending
institutions. The UCA 2008/09 showed
that the main form of collateral required
by lending institutions in Uganda was land
and salary that are rarely owned by female
farmers. Many female farmers earn low
incomes and hence are unable to save in
SACCOs. This limits the ability of female small
holder farmers from expanding production
to market levels. Government needs to
increase financial literacy, especially among
women and provide incentives to enhance
their borrowing. For example, female farmers
should be supported to access
the ACF facility which is collateral
free. Efforts to reduce the risks
associated with the agricultural
sector, such as weather,
insurance and price stabilization,
will help to extend financial
access but are unlikely to be
sufficient.
The Government is providing financial
support through the Microfinance Support
Centre Limited (MSCL) to Savings and Credit
Cooperative Organisations (SACCOs) to
disburse commercial and agricultural loans.
A recent study by Ezra Munyambonera et
al (2012) shows regional disparity in the
distribution of the loans with the Western
and Central regions dominating in receiving
support. Funds disbursed for agricultural
development across regions were less than
20 percent over the years, apart from the
western region that received substantive
amounts between 2008 and 2010 (Table 2.7).
However, the process of acquiring this credit
is difficult /costly for small scale farmers as
they are required to pay 10 – 15 % interest
yet they are not sure of the produce as the
seasons are not predictable.

2524
Figure 2.5: Distribution of Agricultural
Household members who received credit by
sex and region by 2008/09
Source: UBOS, 2011.
2.4.4 Marketing
Through the liberalization and privatization
policies of the 1990s, the Government divested
itself of providing markets for agricultural
produce and concentrated since then on playing
a facilitative role to private sector to undertake
this responsibility. Government mainly provides
market information to farmers and has introduced
the Ware House Receipt System (WRS) to
facilitate bulk storage and marketing. The main
objective is to increase storage capacity, value
addition and develop a sustainable marketing
system of agricultural commodities that will
contribute to income enhancement of the small
holder farmers11
. The warehouse receipt system
is funded under Uganda Commodity Exchange
(UCE) and the commercial banks Housing Finance,
Stanbic and DFCU.
The six licensed warehouse in
Uganda include:
• Jinja warehouse
• Kasese – Elehadai ware house
• Kasese – Nyakatozi ware house
• Gulu ware house
• Masindi ware house
• Kapchorwa ware house
• Soroti ware house
• Tororo ware house
Gender mainstreaming is wholly
embraced in the WRS program. The
ware-houses that are operational
have employed mostly women to
sort the seeds and grains which
have increased on the household
income in these families and livelihood. For
every 30 employees in a warehouse, 25 are
women who sort the seeds while 5 men carry out
administration work and moving heavy sacks.
Although access to markets has improved
tremendously with the opening of roads in the
countryside, farmers still find it a challenge to
market their produce. The UCA 2008/09 found
that about 38% of agricultural households have to
move 5Km and above to access local markets, the
problem being more pronounced in the Central
Region (42% reported being 5Km or more from
nearest local market) followed by Western region
(40.7%) – Table 2.8.
11 Warehouse receipt system Act 2009
considered to food secure, the country faces
food insecurity.
The UNHS 2009/10 collected information on the
average number of meals taken by household
members per day in the last 7 days preceding
the survey. A meal was considered to be any
substantial amount of food eaten at one time.
Table 2.9: Distribution of Households that took one meal a day %
Residence 2002/03 2005/06 2009/10
Rural 6.0 9.0 10.1
Urban 8.1 6.3 5.9
Kampala 5.3 6.4 6.9
Central 3.7 9.6 7.3
Eastern 3.0 4.8 7.3
Northern 25.1 18.4 20.1
Western 4.5 3.8 5.8
Uganda 7.7 8.5 9.3
Source: UNHS 2009/10.
Farmers still lack market information
which exposes them to exploitation
by middlemen who offer low prices
for their produce. In remote and
mountainous areas, access to
markets is limited by poor road
infrastructure and lack of regular
transport means.
Table 2.8: Percentage distribution of Households by Distance to nearest local produce
market
Distance to Local Market Number of Households Proportion of
Households
Less than 1Km 119,726 3.6
1 to less than
3 Km
1,155,526 34.9
3 to less than
5 km
765,982 23.2
5 and above Km 1,267,134 38.3
Total 3,308,368 100
Source: UCA 2008/2009.
Farmers still lack market information which
exposes them to exploitation by middlemen who
offer low prices for their produce. In remote and
mountainous areas, access to markets is limited
by poor road infrastructure and lack of regular
transport means.
2.4.5 Food security
Food Security exists when all people, at all times,
have physical and economic access to sufficient,
safe and nutritious food to meet their dietary
needs and food preferences for an active and
healthy life12
. Two proxies are used widely to
measure the food security and nutrition level of a
country: the number of meals taken in a day (the
more the better) and access to salt which is an
essential and cheap household item. The UNHS
2009/201013
showed that, although Uganda is
12 Adopted from the World
13 UBOS, 2010a.
Overall, there was an increase in the proportion
of households taking one meal a day as opposed
to the traditional three meals a day. The problem
of food insufficiency was more pronounced in
rural than urban areas and in Northern Uganda
(Table 2.9).

2726
3.1.1 Brief project profile
The overall goal of the Vegetable Oil
Development Project (VODP) is “to increase
household cash income of smallholders by
revitalizing and increasing domestic vegetable
oil production, in partnership with the private
sector”. The project is structured around
three different subprojects: (i) introduction of
commercial oil palm production on Bugala Island
in Lake Victoria; (ii) development of traditional
oilseeds in northern, eastern and mid-western
districts of Uganda; and (iii) research and
development (R&D) of essential oil crops piloted
in a variety of districts. The project is financed
by the International Fund for Agricultural
Development (IFAD), Government and the
private sector player OPUL.
The first phase of the project that commenced
in 2003 ended on 31st December 2011 and
closure was on 30th June 2012. Implementation
of the Oil Palm Component at district level
involves a tripartite agreement between three
parties: GoU-MAAIF, the Oil Palm Uganda
Limited (OPUL) and Kalangala Oil Palm Growers
Trust (KOPGT). The District Production Officer
coordinates the project at district level. OPUL
is a consortium of private companies (Wilmar
Performance of Completed Agricultural LoansChapter 3
3.1 Vegetable Oil
Development
Project
Analysis of the performance of first and
concluded phase of the Vegetable Oil
Development Project (VODP) is based
on two key sources of information:
the Interim Evaluation report of March
2011 and the field findings by the
Budget Monitoring and Accountability
Unit (BMAU) conducted during July-
September 2008 and February – March
2012. The analysis is limited to the
Oil Palm Component of the VODP
which attracted the bulk of the donor
resources.
1 IFAD, 2011.
Plantation Services, BIDCO, Josovina) that are
partners in project. The KOPGT is a trustee
body that was established in 2005 to protect the
interests of and support the smallholder farmers
who are supposed to develop 3500ha of oil palm
under the VODP. The institution, which is GoU
funded, supports the farmers by providing credit,
inputs, marketing infrastructure and selling their
fruits.
3.1.2 Planning and project design
phase
Because of the complexity of the project in terms
of the number of stakeholders involved in the
Public Private Partnership (PPP), the planning and
designing phase was protracted and took a long
period. The Government of Uganda conceived
the idea to establish the VODP in 1986 as a
means of promoting import substitution and
export diversification to recover the economy
that had been under war. The Government
sought the support of IFAD that saw the VODP as
an opportunity to increase smallholder incomes.
However, it took a total of eight years of planning
before the VODP was approved in 1997 by the
IFAD Executive Board.
These findings are collaborated by another
more recent study carried out by the BMAU in
62 districts and 12 Municipalities involving 1,560
NAADS beneficiary households14
. The study
revealed that, prior to the NAADS intervention on
food security farmers (FSFs) and market oriented
farmers (MOFs) in FY 2010/11, adults in about
50 percent of the households had two meals
per day, 38 percent could afford three meals per
day and 2 percent had four meals per day. Since
the NAADS intervention, the proportion eating
once or twice per day has reduced slightly while
those eating three or four times per day have
increased modestly (Figure 2.6).
14 MFPED, 2012f.
Figure 2.6: Households by number of meals eaten by adults before and after NAADS
Source: MFPED, 2012f.
These findings indicate that the country still has
close to 10% of the population that take one
meal a day and another over 40 percent that take
2 meals a day which is not adequate. Enhancing
food production and productivity in the country
remains a major challenge for feeding the
population adequately. The Government needs
to work closely with the private sector and civil
society to bring agricultural services closer to the
people and ensure that they are affordable so
that farming can be scaled up in all regions in the
country using improved inputs and technologies.

2928
During the planning stage, a value chain
approach to the vegetable oil subsector was
adopted implying working with a variety of
vegetable oil crops, stakeholders, institutional
levels, and geographical areas. It required
coordination with many public and private
institutions at national, district and local levels.
Protracted discussions to bring on board the
private sector OPUL (also referred to as BIDCO)
and the public to surrender their land to the
project resulted in a five year delay in project
implementation. Another two-year delay was
experienced to give time to establishment of the
KOPGT. Hence, although the project was officially
approved in April 1997, implementation did not
commence until 2005. The project had to be
extended four times to enable implementation
to take place. The delays during the planning
phase negatively affected project outcomes as
discussed below.
3.1.3 Budgeting and financing
Total project costs were originally estimated
at US$60 million, consisting of an IFAD loan of
US$20 million, US$33.1 million in co-financing
from a private-sector partner, and contributions
of US$3.8 million and US$3.1 million, respectively
from the Government and the beneficiaries.
However, the scale of the oil palm subproject
was later increased to ensure its financial and
economic viability. The private investor and the
Government increased their contributions to
US$120 million and US$12 million, respectively,
thereby bringing the total project costs to
around US$156 million1
.
The delay in project start up and the loan
extensions necessitated re-allocations between
budget lines: there was a reduction in vehicles
and equipment and civil works and operating
costs rose significantly. Overall expenditure was
within budget limits and on schedule. There was
an increase in Government commitments while
IFAD disbursements lagged behind schedule.
Expenditure in the oil palm component was
at 88% of the disbursed funds, reflecting a
fairly good absorption capacity (Table 3.1). The
increased Government expenditure on oil palm
resulted from the high costs of the new ferry,
the purchase of land for the project and efforts
to counteract negative publicity. IFAD’s low
disbursement rate (64 per cent) was attributed
to the slow enrolment of smallholders and out
growers in the oil palm subproject.
1 IFAD, 2011.
Table 3.1: Financial performance of the
VODP by Sub-component (US$ ‘000)
Sub-component IFAD Loan Government Beneficiaries Total
Budget Actual % Budget Actual % Budget Actual % Budget Actual %
Oil Palm 10,790 5,393 50 2,080 6,334 305 4,000 3,200 80 16,870 14,927 88
Traditional oil seeds and
essential oils
6,640 4,976 75 1,360 1,346 99 - - - 8,000 6,322 79
Institutional support 2,480 2,284 92 340 834 245 - - - 2,820 3,118 111
Total costs 19,910 12,653 64 3,780* 8,514 225 4,000 3,200 80 27,690 24,367 88
*The Government’s contribution was increased to
US$12 million after the oil palm revisions in 2000.
Source: IFAD, 2011.
3.1.4 Project Implementation
The first phase of the VODP had 6 core targets,
among others namely:
1) Develop 10,000 ha of oil palm on Bugala
Island: 6,500 ha on a nucleus plantation and
3,500 ha planted by out growers and small
holders organized by KOPGT
2) Construct, furnish and equip an office block
for KOPGT
3) Construct a processing mill at the nucleus
estate
4) Construction of 250 km of road network.
5) KOPGT to provide of inputs and loans to
farmers.
6) Harvesting and collecting fresh fruit
bunches from farmers.
By project closure date, almost all the above
targets for physical performance had been
achieved, as garnered from field findings by
the Budget Monitoring and Accountability Unit
(BMAU)2
. OPUL planted 6,100 ha of the targeted
6,500 ha; land planted by smallholders and
out growers was 2,362.4 ha against the target
of 3,500 ha (67.5% achievement); the KOPGT
office was constructed and furnished; the mill
for processing Fresh Fruit Bunches (FFB) started
operation in February 2010 with an installed
capacity of 10 metric tonnes (MT) expandable to
30 MTs per hour; 210km out of the 250 km were
constructed;
By March 2012, the total amount loaned out
to farmers to cater for their financing needs at
10% interest rate stood at Ugshs 19.5 billion,
having risen from Ugshs 12.8 billion in 2011
and Ugshs 8.8billion in 2010. The KOPGT had
recovered Ugshs 450 million from the farmers.
Yields were still low as most trees were yet to
gain maturity. The harvest rose from 680 tonnes
in 2010 to 2,900 tonnes of fresh fruit bunches
2 MFPED, 2012e; MFPED, 2008.
in 2011. The average harvest per month rose
from 200 tonnes in 2010 to 500 tonnes in 2012,
as more farmers started harvesting and applied
fertilizers.
A major shortcoming of the project however
was the lack of focus on involving special
interest groups such as widows and orphans
as they lacked land to effectively participate in
the project. Other challenges included: farmers
expressed discomfort with regard to the lack of
clarity on how the deduction by KOPGT of 33
percent from proceeds to recover the loans and
transport costs was being computed; wastage of
fruits as KOPGT did not have enough trucks to
transport the produce from the farmer fields to
the processing mill. The escalating value of land
was another constraining factor in acquisition of
land for the oil palm plantations.
The IFAD evaluation report highlighted a number
of factors that affected implementation results:
the five year delay in identifying the private

3130
investor and concluding negotiations resulted
in delayed planting maturing of the crop. The
setting up of KOPGT, establishment of the
nucleus estate and smallholder and out grower
oil palm plantings, the harvesting of FFBs and
construction of oil mill were all delayed. The
delays substantially increased costs for both
the Government and the private investor. In the
early years, there was much public opposition to
the project from some NGOs, donors, opposition
politicians, civil servants and subsector
competitors. This further delayed project
implementation and dampened the results.
3.1.5 Key Gender Issues
Gender mainstreaming in the VODP was
addressed mainly from the perspective of
targeting women and youth to be among
the beneficiaries. Women were encouraged
to participate in the project in their own
right as landowners or tenants, as wives of
landowners or tenants or as plantation workers.
They were also encouraged to participate in
the membership and leadership of grower
organizations and access loans and inputs from
KOPGT. Youth, on the other hand, were targeted
as members of smallholder households and they
benefitted from skills in financial management,
succession planning and HIV/AIDS Sensitization.
Oil palm being a commercial crop, more men
than women participated in the project. For
example, by January 2009, women constituted
31% of the total beneficiaries (Table 3.2). The
women tended to get involved in smaller scale
processing, transportation of fruits and helping
their husbands in tending the plantations.
Widows hardly participated as many lacked
access to land.
Table 3.2: Number of VODP beneficiaries by
gender in 2009
Category No. of
Smallholders
No. of
Out growers
Total Proportion
(%)
Men 396 53 449 69
Women 183 19 202 31
Total beneficiaries 579 72 651 100
Source: IFAD, 2010.
A major challenge was that the project did not
develop a detailed strategy of reaching out
to the targeted groups once the project was
underway. Follow-up meetings were held with
block groups and to speed uptake, the project
increasingly focused on any willing participant,
especially those with land.
3.1.6 Lessons and
recommendations
Overall, the VODP achieved a sizeable number
of its targets, despite the delayed start to
implementation. The delayed start of the
intervention led to delayed disbursement
of funds, escalated project costs and some
key outcomes not being realized. Gender
By March 2012, the total amount
loaned out to farmers to cater
for their financing needs at 10%
interest rate stood at Ugshs 19.5
billion, having risen from Ugshs
12.8 billion in 2011 and Ugshs
8.8billion in 2010.
are required for putting in place large donor
funded projects and forging partnerships
with Government and private sector.
2) Funds absorption: The VODP exhibited
a fairly good absorption capacity of the
earmarked funds, indicative of proper
budgeting and identification of priority
expenditure items, functional financial
management systems and adequate
capacity building within the implementing
agencies.
3) Mainstreaming gender: although
gender issues were integrated in the VODP,
not much attention was paid to this aspect
as implementation progressed. Gender
planning should be part and parcel of the
project design, planning, implementation
and monitoring process. Clear gender
mainstreaming strategies should be put in
place during the implementation process,
and progress should be regularly monitored.
3.2 Agricultural Improved
Rice Production
3.2.1 Brief Project Profile
The Agriculture/Improved Production project3
was a GoU intervention during 1st September
2008 – 31st August 2010 with the principal
objective of “increasing rice production and
income of resource poor farmers through
promoting innovative NERICA rice based
technologies in Northern Uganda”. The project
was implemented by MAAIF in collaboration with
the Food and Agriculture Organization (FAO)
and with funding from the Government of Japan.
Implementation was undertaken in 9 districts
namely: Amolotar, Amuru, Apac, Dokolo, Gulu,
Kitgum, Lira, Oyam and Pader. The intervention
was a successor to a previous project known as
“Dissemination of NERICA and Improved Rice
production Systems to Reduce Poverty and
Food Deficit in Uganda” implemented by MAAIF/
FAO during 2006 to 2008 estimated to cost US$
1,239,983.
The first project operated in the districts of Mpigi,
Wakiso, Mbale, Tororo, Gulu, Lira, Hoima and
Masindi. Target beneficiaries are IDP returnees,
poor farmers, women farmers and small-scale
food insecure households. The project also
3 The full project name is “Agriculture and Rural
Development through improved rice based farming systems for
food security and poverty reduction in Northern Uganda”.
focuses on strengthening the capacity for
rice seed (breeder/foundation) production at
National Crops Resources Research Institute
(NaCRRI) and the capacity for certified seed
multiplication and storage at community level.
phase
Consultations held between MAAIF and BMAU
in 20114
indicated that once the project was
approved by GoU in 2007/2008, the initial
planning processes were largely undertaken at
the offices of the development partners (FAO
and JICA) with involvement of MAAIF Senior staff.
The project design was such that the substantive
activities would be implemented directly by FAO
with MAAIF playing the advisory and monitoring
role. Hence, FAO worked directly with District
Production Offices to organize the farmers to
participate in the project.
The project used a Farmer Field School (FFS)
approach where farmers were organized in
groups of 30 members and trained in improved
rice production technologies. Each district had 8
farmer groups that benefited from the project.
Provision of seed, input and equipment by the
project was done through a revolving fund so
that the outputs could be sustained beyond the
project life. The intervention was implemented
by a Project Coordination Unit based in Lira
district.
4 BMAU Monitoring Visits in FY 2010/2011 Q2.
The project used a Farmer Field
School (FFS) approach where
farmers were organized in groups
of 30 members and trained
in improved rice production
technologies.
mainstreaming was partially addressed, mainly
focusing on participation of women and youth in
the project. Other key gender dimensions such
as supporting land access by the disadvantaged
and enhancing access to extension and inputs
were not addressed. A number of lessons and
recommendations emerge from the analysis:
1) Implementation modalities: Delays
in implementing projects can have gross
cost implications and organizational
problems that negatively impact on project
implementation. For large complex projects/
PPPs, sufficient time should be allocated
to the planning process before project
approval and all the key stakeholders should
be adequately sensitized and involved in
the project design and planning processes.
Considerable time, resources and flexibility

3332
Budgeting for the donor funds that accounted
for over 90% of the disbursements was mainly
done by the Government of Japan, with input
from FAO. The MAAIF was involved in budgeting
for the counterpart funding from GoU which
formed less than 10% of the available resource.
The MAAIF officials, when consulted by BMAU5
,
indicated that they were not fully aware of the
expenditure patterns for the donor funds as
these were exclusively handled by the donor and
implementing agency FAO.
The end of project evaluation report6
indicates
that a total of US$ 1,499,400 was spent on this
project, donated by the Government of Japan
and channeled through FAO as the spending
agency. In addition, GoU provided counterpart
funding to MAAIF for monitoring this project: UShs
149,650,000 in FY 2009/10 and UShs 119,800,000
in the first and second quarter of FY 2010/11, all
totaling to UShs 269,450,000. Table 3.2 shows the
utilization of the donor funds.
5 BMAU Monitoring Visits in FY 2010/2011 Q2.
6 MAAIF/FAO, 2010.
Table 3.2: Utilization of Donor Funds in
Agriculture Improved Rice Production
Project
Item Budget US$ %age of total costs
Personnel 105,600 7.04
Equipment and Machinery 424,700 28.32
Material and supply 155,000 10.34
Contract 144,800 9.66
Consultants for Capacity Building
(training and workshop and technical
manual)
142,000 9.47
Capacity Building
(FFS support, training and workshop and
technical manual)
106,900 7.13
Duty Travel 187,900 12.53
GOE 60,000 4.0
Overhead (13%) 172,500 11.50
GRAND TOTAL 1,499,400 100
MAAIF/FAO, 2010
About 39% of the project funds were used for
purchasing equipment, machinery and supplies
and 61% used in over head costs, capacity
building and other expenses. All the funds
received from GoU were used by MAAIF for
supervision and monitoring of the project.
3.2.4 Project Implementation
The project was implemented as scheduled over
a two-year period. The mid-term and end of
project reports7
indicate that the interventions
7 MAAIF/FAO, 2009; MAAIF/FAO, 2010.
Table 3.3: Farm tools distributed to farmers by
August 2010
Item Total quantity
distributed
Quantity
distributed per
district
Quantity per
farmer
Serrated Sickle 2,160 pieces 240 1 piece per farmer
Hoes 2,160 pieces 240 1 piece per farmer
Panga/Machine 2,160 pieces 240 1 piece per farmer
Shovels 2,160 pieces 240 1 piece per farmer
Wheel barrows 2,160 pieces 240 1 piece per farmer
Tarpaulins 2,160 pieces 240 1 piece per farmer
Tape measures 72 units 8 1 piece per group
Ox-ploughs 72 pieces 8 1 piece per group
Oxen 144 heads 16 2 heads per group
Line marker 216 pieces 24 3 pieces per group
Jab planter 216 pieces 24 3 pieces per group
Source: Project Coordination Unit – Lira; MAAIF/FAO, 2009.
benefitted 72 farmer groups with a total of 2,160
farmers in 9 districts of Northern Uganda. In
addition to training on improved rice production,
the farmers were provided with farm tools and
post harvest equipment as shown in Tables
3.3 and Table 3.4. Certified NERICA rice seeds
from Namulonge Research Station, fertilizer and
herbicides were distributed to seed growers in
the first season of 2009 for seed multiplication
(Table 3.5). Tools and equipment (tractors,
pumps, threshers and rice mills) were provided
to farmers’ groups or farmers’ associations. In
the second year, seeds were procured from
farmers for distribution in the production area.
Table 3.4: Post harvest equipment distributed by August 2010
Items Quantity
distributed
Mode of Distribution
Re-circulating Batch Dryer 1 piece 1 piece for NaCRRI
Air screen Seed Grader 1 piece 1 piece for NaCRRI
Hold-on motorized rice thresher on
trolley or cart
29 units 1 piece per sub-county
Mill-top SB30 rice mill 9 units 1 unit per District
Sefex 25 HP Diesel Engine 9 units 1 unit per District
Weighing Scale 0-100kg 72 units 1 unit per group
NERICA Signposts 9 units 1 unit per District
Source: Project Coordination Unit – Lira; MAAIF/FAO, 2009

3534
Table 3.5: Inputs distributed in 2009
Type of input Quantity Quantity per farmer
NERICA Seed (1,4,10)* 29,625kg (season 1)
23,600kg (season II)
10kg per farmer
200kg per seed grower
Urea Fertilizer 900 bags of 50 kg 33 bags per seed grower
DAP Fertilizer 450 bags of 50 kg 16 bags per seed grower
Satunil herbicide 250 litres per district 83 litres per seed grower
Source: Project Coordination Unit – Lira; MAAIF/FAO,
2009
The project provided 9 units of rice milling
technologies for use in rural areas where access
to milling facilities is a challenge. To improve
management of the mills and ensure return on
the investment, the equipment is managed on
a public-private sector partnership model. The
private sector managing the mills was requested
to meet the costs for housing and installation of
the equipment. Over 850 metric tonnes of rice
were produced from a total of 1,700 hectares
established under project support8
.
Field monitoring findings by the BMAU in 69
out of the 9 implementing districts 2010 and
201110
indicated that the farmers and farmer
groups received all the inputs as planned,
with modest variations. Four key challenges to
implementation were: (1) inadequacy of the
inputs and inappropriateness of some of the
farm equipment (ii) lack of supervision and follow
up by MAAIF (iii) very low project coverage as
only a few parishes were targeted (Iv) The project
did not empower the farmers adequately on
8 MAAIF/FAO, 2010
9 Amolator, Kitgum, Lamwo, Lira, Oyam, Pader and Gulu.
10 MFPED, 2010a; MFPED, 2011c.
2) Funds utilization and disbursement
modalities: the donor funds were
budgeted for and disbursed to beneficiaries
from the donor offices. The Ministry of
Agriculture was not involved in guiding
expenditure and ensuring efficiency and
effectiveness of the project. The donor
records indicated the bulk of funds were
used for recurrent expenses which is
indicative of poor allocative efficiency. Future
projects should allow for the Government
agency to have a more active role in
budgeting and utilization of the funds.
3) Project design: the approach of providing
a small input package to a few farmers
in every geographical locality does not
generate meaningful impacts in terms of
enhancing agricultural production and
household incomes. Future projects should
be designed to cover a larger project area,
target a significant number of farmers and
provide adequate inputs for economic
viability and sustainable impact.
community participation and group dynamics.
Hence, sustainability of the project became a
problem (v) Poor quality of inputs. FAO disbursing
inputs directly to farmers without verification
by the district led to some poor quality inputs
being disseminated. For example immature oxen
would not be accepted if the district veterinary
officer had inspected them first.
3.2.5 Key Gender Issues
The project addressed gender from one
perspective: selecting farmer groups that
were largely constituted of women to be the
beneficiaries. Many of the farmer groups
that benefitted from the inputs had a
disproportionately larger representation of
women than men. However, the seed growers
who were responsible for seed multiplication
and received larger input packages were
predominantly male. This was attributed to the
need for land to undertake seed multiplication
which women did not have access to generally.
3.2.6 Lessons and
recommendations
This project met its set objectives of increasing
rice production and income within Northern
Uganda. All the donor funds were absorbed
by the end of the project. However, the inputs
that were provided to the farmers were
grossly inadequate, some of poor quality and
inappropriate. A year after end of project,
rice production had ceased for some of the
groups that had been targeted indicating low
sustainability of the intervention. A number of
lessons and recommendations emerge from this
analysis:
1) Planning and implementation
modalities: The approach of the donors
taking lead in planning and implementation
led to less involvement and follow up of
the interventions by the Government
entities, the MAAIF and the Districts.
Poor quality inputs were delivered by the
donors and the sustenance of the project
and its impacts was low. It is critical that
donor funded projects use the approach
of Government taking the lead in planning
and implementation which will enhance
supervision of the interventions and long
term impacts.

3736
Performance of ongoing Agricultural LoansChapter 4
Uganda is one of the six countries
implementing the regional Creation of Tsetse &
Trypanosomiasis Free Areas (STATFA) project,
other countries being Kenya, Ethiopia, Burkina
Faso, Mali and Ghana. At the African Continent
level, the project is coordinated by the Pan
African Tsetse and Trypanosomiasis Eradication
Campaign PATTEC. Although the implementation
period was indicated as April 2006 to 2011, the
project is still ongoing. The project is funded by
the African Development Fund (ADF) and GoU.
The total loan amount is UA 6,550,000 and Grant
Amount UA 240,000.
The project objective is “to eradicate Tsetse
and Trypanosomiasis from Uganda”. The
project is for implementation in the districts
of Rakai, Lyantonde, Masaka, Kalangala,
Mpigi, parts of Sembabule, Wakiso, Kampala,
Mukono, Kayunga, Kaliro, Jinja, Mayuge, Iganga,
Bugiri, Tororo, Butaleja and Pallisa. Expected
outputs include: complete refurbishment
and expansion of insectary at NaLIRRI; Tsetse
population reduced by 95%-98% using aerial
spraying; Entomological, parasitological and
socioeconomic baseline Survey; Strategies
for controlling tsetse and Trypanosomiasis;
Operationalise the geographical information
system1
. The analysis in this section focuses on
the first four years of implementation (2006-
2010) as the project was originally scheduled to
be completed in 2011.
phase
Being a regional project, planning for the
STATFA project involved a wide cross-section
of stakeholders at national and continent
level to ensure uniformity in implementation
of the interventions. Hence, the planning and
designing stage continued even after the project
was approved for implementation. The MAAIF
was at the centre of the planning process
together with officials from ADB and MFPED.
There was not much documented evidence of
the details of how the planning process was
actually undertaken. Discussion notes from the
1 MAAIF, 2010e; MFPED, 2009.
4.1 Creation of Tsetse and Trypanomiasis Free Areas
Table 4.1: Fund disbursements for STATFA
project by March 2010
Category ADF Loan ADF Grant GoU (15% contribution)
UA US$ UA US$ UA US$
Amount signed for 6,550,000.00 9,497,500.00 240,000 348,000 982,500 1,424625
Disbursement to
date
886,314.09 1,285,155.43 195,782.69 283,884.9 61,711.68 89,481.94
Undisbursed
amount
5,663,685.91 8,212,344.57 44,217.31 64,115.1 920,788.32 1,335,143.06
% Disbursement 13.57% 13.57% 81.56% 81.56% 6.28% 6.28%
Note: 1UA = 1.45US$ = 2465 UShs
Source: MAAIF, 2010e
Table 4.2 shows the extent of utilization of
the funds that had been disbursed. Slightly
over a half (54%) of the disbursed funds had
been utilized by the project over the four year
period. This suggests a very slow rate of funds
absorption and project implementation, given
the fact that only 15% of the total resources had
been disbursed. The project was extended for
additional years to allow project implementation
to take place.
Table 4.2: Funds utilization of the STATFA
project during April 2006-March 2010
Source Amount received
(UA)
Amount utilized
(UA)
Balances (UA) % Utilisation
Loan 886,314.09 406,547.59 479,766.50 45.87
Grant 195,782.69 151,565.38 44,217.01 77.41
GoU 61,711.68 60,477.45 1,234.23 98
Source: MAAIF, 2010e.
The STATFA project staff and the review
documents indicated three key challenges that
explain these financial trends3
:
1) Government took long to fulfill some of
the loan prior conditions such as hiring
the required staff and putting in place a
management committee. The Accountants
were changed twice leading to a disruption
in project activities. In the financing
agreement, GoU is supposed to provide
permanent management staff.
2) Bureaucracies in procurements – using two
procurement systems of ADB and GoU – led
to excessive delays.
3 MFPED, 2010a.
BMAU2
indicate that ADB funded projects suffer
from bureaucracies that lead to excessive delays
in project execution. All major payments are
effected from the donor offices after rigorous
assessment procedures.
Table 4.1 presents the disbursement of the
STATFA project funds as of March 2010. After
4 years of implementation of the donor project
and close to the completion date, the bulk
of funds under the ADF loan had not been
disbursed. Only 13.57% of the ADF loan had
been disbursed. About 81% of the ADF Grant
and only 6.28% of the GoU contribution had
been disbursed. Overall, only 15% of the total
project funds have been disbursed over the four
year period. About 85% of the funds remained
undisbursed, one year to the scheduled project
closure date.
2 Budget Monitoring Visits during January-March 2010.
3) Low counterpart funding which is itemized
in a manner that does not meet the
requirements of the project. For
example, there is a large budget
line reserved for donor staff
salaries yet the project had only
one staff to be paid.
4.1.4 Project
Implementation
The STATFA project has been reviewed and
reports are available on overall progress in
implementation4
. A year before completion date,
the project was behind schedule in addressing
the key objectives and activities. The main
activities undertaken were focusing on capacity
building, procurement of inputs and some
implementation focusing on deployment of traps
and screening in Kalangala district.
Procurements have been completed for office
equipment, vehicles, audio visual equipment,
insecticide (400 litres of deltamethrin 20%
and 6152 litres of pour-on insecticide 1%)
and 1 outbound engine and 20 life jackets all
costing UShs 226,206,640 or
US$ 118,650. Procurements are
ongoing for 90,000 tsete traps,
insecticides, veterinary drugs,
lab supplies, 10 motorcycles,
protective wear, generators and
other items estimated to cost
4 MAAIF, 2010e. STATFA Project, 2009.

3938
US$ 2,245,913. Entomological, parasitological,
environmental and socio-economic baseline
data. The human sleeping sickness analysis
was conducted. Out of the 12,000 insecticide
treated tsetse traps that were supposed to be
deployed, 2,300 were deployed in Kalangala
district in 3 parishes. In addition, 100 litres of
pour-on was delivered to treat cattle. A total
of 26 entomologists were trained, study tours
undertaken in other countries, 60 of the 120
laboratory technicians and assistants had been
recruited, regional workshops held in Jinja and
Masaka.
A physical verification visit by the BMAU5
indicated that there was no physical presence of
this project in any of the districts to be targeted,
other than Kalangala district. The district officials
acknowledged receipt of the tsetse traps
which had been deployed in 3 parishes. The
most infected areas, Bufumbira and Mugoye
Sub-counties were yet to be reached by the
project. MAAIF had distributed 100 litres of
pour on chemicals for treating livestock. There
was evidence of farmers whose livestock had
been treated by the district officials and their
assistants using these chemicals.
The main challenges related to the slow pace of
project implementation and the limited reach.
Many of the traps that had been deployed were
destroyed by weather elements or dislodged
by stray animals. The beneficiaries of the traps
lacked requisite skills and materials to repair
5 MFPED, 2010a
the destroyed nets hence their usage was
for a limited time period. The district had few
entomologists to implement the project and
the project management committee was not
functional.
4.1.5 Lessons and
recommendations
The STATFA project lagged behind schedule
in implementation in line with the slow
disbursement and absorption of funds. Most
objectives of the project had not been achieved
one year before project closure. Hence the
project was given an extension of additional
five years to continue to complete the pending
activities and is still ongoing. A number of lessons
and recommendations emerge from the analysis:
1) Prior conditions and bureaucracies:
the ADB loans had stringent prior conditions
and lengthy bureaucratic procedures that
affected the pace of project implementation.
It is critical that the prior conditions in
future donor funded projects are well
negotiated at planning stage to ensure
that they are flexible and implementable
by the Government. Delays in project
implementation can be avoided if the
donors trust and use the Government
procurement systems rather than imposing
their own systems or allowing for parallel
procurement channels.
2) Low counterpart funding:
the unavailability of sufficient counterpart
funding from GoU grossly affected the pace
of project implementation. The Government
should only accept projects for which it has
assured counterpart funding; this should
be disbursement in a timely manner in
adequate amounts for triggering project
implementation.
3) Limited outreach and project
sustainability: this project distributed
limited traps to 3 parishes in Kalangala
district. The beneficiaries had no skills
and materials for replacing the traps
implying low reach sustainability of the
project. Future projects should provide
adequate equipment and inputs that cover
a larger geographical area and also train
the beneficiaries in replacing worn out
equipment to ensure reasonable project
impact and sustainability.
The project aims at improving
incomes, rural livelihoods
and food security through
sustainable natural resources
management and agricultural
enterprise development.
4.2 Farm Income
Enhancement Project –
Irrigation Component
The Farm Income Enhancement and Forest
Conservation Project (FIEFOC) under the
Ministry of Agriculture, Animal Industry and
Fisheries (MAAIF) commenced in 2005 and was
scheduled to end in 2010. The mid-term review
conducted in April 2009 recommended a further
extension of this project to December 2012
to complete unfinished activities. The project
aims at improving incomes, rural livelihoods
and food security through sustainable natural
resources management and agricultural
enterprise development. The project has
two components: i) Agricultural Enterprise
Development Component coordinated by
and Fisheries (MAAIF) ii) Forestry Support
Component coordinated by the Ministry of Water
and Environment (MWE). The total project cost
for the five-year period (2005-2010) is estimated
at UA51.15m funded by ADB/ADF and GoU6
.
Within the Agriculture Enterprise Development
component was a sub-component to build small-
scale irrigation schemes. In 2009, the project was
6 GoU and ADF, 2009.
restructured to focus on four irrigation schemes.
The overall objective of the project is to induce
a commercially sustainable agriculture for
improved income level for the community and
help in poverty alleviation.
4.2.2 Planning and Project Design
Phase
The planning for the project was done jointly
by MAAIF and officials from the donor ADB.
The Ministry of Water and Environment and
the Ministry of Works and Transport (MoWT)
were also involved in the planning processes
to ensure that environmental and engineering
aspects of the project are taken care of.
Although the project was flagged off in 2005, the
various stakeholders continued negotiating over
the various aspects of the large multi-sectoral
project leading to delays in implementation. The
original design focused on construction of many
small scale irrigation schemes at farm level in the
different parts of the county.
The mid-term review conducted in April 20097
reported very slow progress in implementation
of this component and very high operational
and maintenance costs. It was recommended
that the sub-component is restructured to focus
on rehabilitation of four existing large scale
irrigation schemes namely: Mubuku Irrigation
Settlement Scheme in Kasese District, Doho Rice
Irrigation Scheme in Butaleja District, Olweny
7 GoU and ADF, 2009.
Swamp Rice irrigation Scheme in Dokolo district
and Agoro Irrigation Scheme in Kitgum district.
The rehabilitation was to be completed by
December 2010.
An ADB Supervision mission conducted in April
2011 found that no work had been done by
MAAIF and recommended cancellation of the
project if the trend of slow implementation was
not rectified. It was noted that due to passage
of time, the funds that were available were no
longer sufficient for four irrigation schemes.
To rectify the situation, a Presidential Directive
was issued on 6th
April 2011 to restructure the
project. The main elements of the restructured
project were to concentrate on 3 irrigation
schemes, transfer implementation of civil works
to Ministry of Water and Environment. The
Presidential directive was actualized starting
June 2011 whereby all existing contracts
under MAAIF where transferred to MWE and
implementation of works started thereafter.
Based on the technical engineering estimates
by MAAIF in collaboration with the Ministry
of Water and Environment (MWE), the
rehabilitation costs for each medium scale
scheme were budgeted in 2009 as below (Table
4.3): The total estimated cost of the project is UA
11,951,624 or UShs 35,890,882,670, inclusive
of contingency. Exclusive of contingencies, the
rehabilitation of the four schemes is estimated
to cost UA 9,551,935.2 or UShs 28,674,909,692.

4140
Table 4.3: Costs for the four irrigation
schemes
Irrigation
scheme
Civil works costs
(UShs)
Consultancy
supervision
costs (UShs)
Total costs (UShs) Beneficiaries
(households)
Mubuku 5,508,174,368 1,489,264,293 6,997,438,661 1,200
Doho 6,340,265,738 1,346,213,384 7,686,479,122 2,350
Olweny 14,911,718,038 1,096,425,352 16,008,143,390 3,300
Agoro 4,102,396,145 1,096,425,352 5,198,821,497 1,000
Total 30,862,554,289 5,028,328,381 35,890,882,670 7,850
Note: The schemes’ civil works costs include 15% price
contingency and 5% physical contingency.
Source: GoU and ADF, 2009
Table 4.4 shows the expenditure incurred
by MAAIF by end 2010. By December 2010,
UShs 1,728,873,094 had been spent on the
Irrigation component, inclusive of expenditures
incurred during FY 2006/07 – FY 2007/08 on
the small scale irrigation sub-component that
was suspended in April 2009. The bulk of
the expenditures were on general operating
expenses (54%) and specialized services and
demonstration (24%). During FY 2009/10, the
bulk of expenditures on the four irrigation
schemes (87%) was on general operating
expenses, indicative of poor allocative efficiency.
It is at this point that the remaining funds for
funding were transferred from MAAIF to MWE
during 2011.
Upon completion, the irrigation schemes would
be handed back to MAAIF for management.
4.1.5 Lessons and
recommendations
There are a number of lessons and
recommendations that can be drawn from this
project:
1) Institutional and Implementation
capacity: MAAIF lacked sufficient
capacity to supervise construction and
implementation of irrigation schemes. The
abrupt change in project design without
analyzing the capacity of the ministry to
implement 4 large irrigation schemes was
a major constraint. MAAIF had only one
resident Engineer at project start who could
not supervise such a large project single
handedly. Other Engineers where co-opted
from other ministries but they were still
inadequate. Future projects that are largely
of a civil works nature require recruitment
of adequate engineers and other requisite
skills before project start to ensure smooth
implementation. Implementation and
institutional capacity of the responsible
agency should be properly scrutinized at
planning stage and stepped up accordingly.
Joint ventures such as was done between
MAAIF and MWE should be encouraged to
harness capacity where it exists.
2) Allocative efficiency: For the period
when the project was under MAAIF, it
exhibited poor allocative efficiency as over
80% of the funds were being spent on
operational expenses without any tangible
output. Absorption was high but for less
critical expenditures. For future projects,
entities should only be allowed to spend
after establishing that they have adequate
capacity to manage and spend funds
efficiently and effectively. Value for money
should be promoted in donor funded
projects.
3) Decentralised planning and
execution: The relevant district officials
(District Engineer, District Water Officer and
District Community Development Officer)
were brought late in the implementation
process. They were not fully involved in
the planning process and yet they were
expected constantly supervise the project.
The Local Governments should be brought
on board at project inception stage to
help in implementation and setting up
management structures at community
level to ensure project sustainability.
Decentralized planning and execution
should be encouraged as the districts are
the final beneficiaries of the project; they
should own it right from planning and
execution phase.
Table 4.4: Irrigation Expenditure by Category 2006/7, 2007/8, 2008/9, 2009/10
for MAAIF H/Q (UShs)
Light
Equipment
Specialized
Services and
Demonstration
Training
and
Capacity
Building
Vehicle and
Equipment
maintenance
General
Operating
Expenses
Total
2006/07 67,300,500 51,353,400 4,306,698 14,427,100 137,387,698
2007/08 21,555,000 285,974,000 10,960,000 37,649,400 37,714,000 393,852,400
2008/09 21,698,000 212,197,000 12,531,382 335,182,120 581,608,502
2009/10 38,054,213 - 40,484,629 537,485,652 616,024,494
TOTAL 21,555,000 413,026,713 274,510,400 94,972,109 924,808,872 1,728,873,094
Source: MAAIF data, December 2010.
4.1.4 Project implementation
The only activities undertaken while
the project was in the hands of MAAIF
were procurement of contractors and
preparation of Bills of Quantities (BoQs).
The documentation was transferred
to MWE in 2011 which concentrated
on construction of Agoro Scheme in
Lamwo district, Doho Scheme in Butaleja
district and Mobuku Scheme in Kasese
district. A discussion held with officials of
MWE in November 2012 indicated that 85%
construction/rehabilitation works had been
achieved and construction would be completed
by December 2012. The beneficiary farmers
were being trained in proper management of the
schemes, including operations and maintenance.

4342
1) The budget allocation to agriculture as a
share of the national budget remains low,
at 3.2% in FY 2012/2013. Most of the donor
financing comes in discrete projects whose
contribution to the overall sector outcomes
cannot be easily ascertained or measured.
2) The agricultural sector attracts less than
10% of the donor assistance in Uganda that
is channeled to the development budget. A
substantial part of external support to the
sector comes in form of Technical Assistance
for policy and institutional development and
capacity enhancement.
3) A major challenge is the slow disbursements
of donor funds in the sector in turn leading
to slow implementation of donor funded
interventions. In FY 2011/2012, 74% of
the total loan portfolio equivalent to US$
341.55 remained undisbursed. From a
sector perspective, the core explanatory
factors for the low absorption capacity
include: Inadequate and untimely release
of Government counterpart funding;
complex procurement procedures; capacity
constraints; poor design of projects; new
loan commitments that take long to become
effective; and some funds being controlled
directly by development partners.
Conclusions and RecommendationsChapter 5
5.1 Conclusions
The study set out to assess the
performance status of agricultural
services in Uganda and use of
resources to implement Government
programmes and policies. The study
involved analyzing performance of
four loans (donor funded projects)
in terms of planning, budgeting and
implementation. The extent to which
gender issues were addressed in these
projects was assessed. The following
conclusions emerge from the analysis:
4) The four case study loans do confirm the
gravity of these factors as they singularly
or in combination slow implementation
of donor funded projects. For example,
the poor design of the FIEFOC irrigation
project slowed funds disbursement and
project implementation. ADB Funded
projects generally have long bureaucratic
procurement processes that delay
disbursement of funds. The Government
of Japan and FAO took lead in the
implementation of the Agriculture improved
Rice Production project which led to
distribution of poor quality inputs, the bulk of
funds being used in recurrent expenditures
indicative of poor allocative efficiency and
low project sustenance.
5) The VODP case study illustrates that they are
loans in the agricultural sector that perform
well with regard to absorption of allocated
resources, timely implementation and
achievement of the intended outcomes. The
key explanatory factors of good performance
include proper planning and budgeting that
involves all the key stakeholders; proper
identification of priority expenditure items;
functional financial management systems
and adequate capacity to implement the
projects.
6) The FIEFOC case study illustrates that some
projects are complete failures because of
low implementation/institutional capacity in
and Fisheries. Although funds absorption
was high, it was for the wrong reasons, with
87% of the resources being spent on general
operating expenses without any tangible
outcome.
7) Whereas planning and project design is
usually done jointly between MAAIF and
donor agencies, there are instances where
the donor takes lead. For example the
FAO was the lead agency in planning and
implementing the Agriculture Improved
Rice Production project. The MAAIF had no
full knowledge of the detailed plans and
expenditure patterns of the donor finances.
This led to less supervision and monitoring
of the project by MAAIF, resulting in less
project impact.
8) Generally, gender mainstreaming is not
prioritized in agricultural loans. Gender is
often integrated from one perspective of
ensuring that women and youth participate
in the project interventions. The extent
to which this aspect is followed up during
project implementation varies from project
to project.
9) Delivery of agricultural services such as
extension, credit and research is ongoing
although reach to majority of farmers
remains low. Access to extension services
remains low, with 80% of the agricultural
households having not been visited by an
extension worker in the recent agricultural
survey of 2008/2009.
10) Whereas the bulk of agricultural service
delivery is undertaken at local government
level, the district and sub-county officials
are not adequately involved in the
project design, planning and budgeting
stages. Often, they brought late into the
implementation stage which lessens
ownership, supervision and sustainability of
the donor funded projects.
The budget allocation to the
agricultural sector needs to
be stepped to at least 10%
of the national budgetary
resources to expand delivery
of agricultural services in
Uganda.

Agriculture perfomance in uganda report, 2013

Agriculture perfomance in uganda report, 2013

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