REPORT:
Market Study to Assess Opportunities to Increase
Current and New Fresh Fruit and Vegetable Exports
from Uganda to High Value Markets
March 2020
Steve Hodges, Uganda Agribusiness Alliance
for Uganda Ministry of Agriculture, Animal Industry and Fisheries
As part of the Project: “Enhancing the Capacity of the Fruit and Vegetable
Sector to comply with Phytosanitary Requirements for Export to EU, Other
High End Markets and Regional Markets,” (STDF/PG/543 and RNE)
NOTICE
All information in this “Report on the Market Study to Assess Opportunities to Increase
Current and New Fruit and Vegetable Exports from Uganda to High Value Markets” has
been researched and compiled by Uganda Agribusiness Alliance Limited (UAA) from
sources believed to be accurate and reliable at the time of publishing. However, in the
view of the natural scope of human and/or mechanical error, either at source or
production, UAA and its partners do not accept liability whatsoever for any loss or
damage resulting from errors (including, without limitation, typographical errors or
technical errors,) inaccuracies or omissions affecting any part of the publication, or any
use of this report in part or in full by other parties. All information is provided without
warranty, and UAA (and its partners) makes no representation of warranty of any kind
as to the accuracy or completeness of the information hereto contained.
The contents of this work are intended for general informational purposes only and are
not intended to constitute legal, securities, or investment advice, an opinion regarding
the appropriateness of any investment, or a solicitation of any type.
ACKNOWLEDGEMENTS
This “Market Study To Assess Opportunities To Increase Current and New Fruit And
Vegetable Exports from Uganda to High Value Markets” was commissioned by the
Uganda Ministry of Agriculture, Animal Industry and Fisheries (MAAIF) as part of a
Project titled “Enhancing the capacity of the Fruit and Vegetable Sector to comply with
Phytosanitary requirements for export to EU, other high end markets and regional
markets,” (STDF/PG/543). The Project is managed for MAAIF by Centre for Agriculture
and Biosciences International (CABI), Kenya Office. This Market Study was undertaken
by UAA in collaboration with MAAIF.
UAA, MAAIF and their partners acknowledge the financial support received in the
development of this report from the Standards and Trade Development Facility (STDF)
of the World Trade Organisation.
This work would not have been possible without the generous contribution of time and
information from the individuals and institutions that provided a variety of assistance.
Steve Hodges of Uganda Agribusiness Alliance was responsible for the market
research, including conducting much of the research as well as overseeing the content
of research done by Kilimo Trust under contract as part of this Market Study. Many
thanks to Dr. Birungi Korutaro, Country Team Leader of Kilimo Trust-Uganda, and
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Lilian Githinji, Program Officer – Markets and Policy Analysis for the valuable research
on FFV exports from Kenya and Ethiopia, as well as on the public and private support
making these exports possible, which provided a crucial part of this overall Market
Study.
Brenda Kisingiri of MAAIF and Florence Chege of CABI played a vital role from the
beginning in making sure that the direction and details of the research and report would
be as relevant as possible to helping Uganda advance in the export of fresh fruits and
vegetables.
Last but not least, Ajuna Tadeo, my Platform Projects Assistant at UAA helped in many
ways including following up with exporters to be sure this study included information
from them on FFVs which they believed held promise for future exports from Uganda.
UAA and the author owe an incalculable debt of gratitude to all of the individuals listed
above who provided research, guidance and other assistance; however, the final
content and form of the report was the decision of the author and they are not to be held
responsible for either.
Steve Hodges, Chief Operating Officer
Uganda Agribusiness Alliance
Victoria House
Plot 1518, Block 213
Kira Road, Bukoto
P.O. Box 12036, Kampala, Uganda
steve.hodges@ugandaagribusinessalliance.com
+256 753 461 348
August 2019
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Table of Contents
EXECUTIVE SUMMARY .................................................................................................................................. 7
PART I: INTRODUCTION .............................................................................................................................. 10
I-A. Background to the Fresh Fruit and Vegetable Market Study ........................................................... 10
I-B. Market Study Scope and Objectives ................................................................................................. 10
I-B-1 Scope of Study ............................................................................................................................ 10
I-B-2 Objectives of Study:.................................................................................................................... 12
I-C. Study Methodologies ........................................................................................................................ 13
I-C-1 Methodology for selection of FFVs for the focus of this study .................................................. 13
I-C-2 Methodology for evaluation of suggested FFVs ......................................................................... 13
I-D. Strategies Used in Market Study ...................................................................................................... 14
PART II: BACKGROUND ON FRESH FRUIT AND VEGETABLE EXPORT MARKETING IN UGANDA ................. 14
PART III: FRESH FRUITS AND VEGETABLES WITH PROMISE FOR EXPORT ................................................... 20
III-A. Criteria for Evaluating Promise for Successful Ongoing Export sales ............................................. 20
III-A-1. Manageability of regulatory, quality and market requirements ............................................ 21
III-A-2. Ability to produce at the scale needed to meet projected ongoing market demands ........... 22
III-A-3. Ability to produce at the consistency needed to meet projected ongoing market demands 22
III-A-4. Existence of value chain structure and linkages conducive to a market-based approach ..... 22
Small holder farmer participation in the Kenya FFV export value chain. ........................................... 23
III-A-5. Regional competitiveness in price and delivery of the FFV .................................................... 25
III-A-6. Interest by Ugandan exporters to invest in production and export of the recommended FFVs
............................................................................................................................................................ 27
III-A-7. Status of both government and private sector policies, self-regulating mechanisms and
infrastructure to support the sector & recommendations ................................................................. 28
III-B Currently Exported Fresh Fruits and Vegetables with Promise for Export ...................................... 31
TABLE 2: EVALUATING POTENTIAL FFVs CURRENTLY EXPORTED ....................................................... 32
III-C Fresh Fruits and Vegetables with Promise not Currently Exported ................................................ 37
TABLE 3: EVALUATING “NEW” FFVs NOT YET EXPORTED, OR EXPORTED IN SMALL VOLUME .......... 38
PART IV. CONCLUSIONS AND RECOMMENDATIONS .................................................................................. 42
IV-A Conclusions...................................................................................................................................... 42
IV-B Recommendations........................................................................................................................... 44
REFERENCES AND WEBSITES....................................................................................................................... 49
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ABBREVIATIONS AND ACRONYMS
CABI
CAGR
CEO
CNN
COMESA
DCIC
EFSA
EHPEA
ENHAS
EU
FAO
FAUEX
FCM
FFVs
FPEAK
GAP
GLOBALGAP
GoE
GoK
GoU
HCA
HCAS
HO
HortIMPACT
HORTEXA
IAIP
IPPC
ISSD
JKIA
KEPHIS
LAPSSET
MAAIF
MIGA
MoFPED
MoH
MRL
MSME
MT
MTIC
MW
MWE
NAADS
NES
NOGAMU
NARO
NGO
NDP
NPA
NPPO
Centre for Agriculture and Biosciences International
Compound Annual Growth Rate
Chief Executive Officer
Cable Network News
Common Market for Eastern and Southern Africa
Department of Crop Inspection and Certification (of MAAIF)
European Food Safety Authority
Ethiopian Horticulture Producers Exporters Associations
Entebbe Handling Services Limited
European Union
Food and Agriculture Organisation of the United Nations
Federation of Associations of Uganda Exporters
false codling moth
Fresh Fruits and Vegetables
Fresh Produce Exporters Association of Kenya
Good Agricultural Practices
Global Good Agricultural Practice (A key reference / certification scheme
for GAP. In the global market place, formerly EUREPGAP)
Government of Ethiopia
Government of Kenya
Government of Uganda
Horticulture Council of Africa
Horticultural Competent Authority Structure
Harmful Organism
Market-Led Horticulture Programme
Horticulture Exporters Association of Uganda
Integrated Agro Industrial Park
International Plant Protection Convention
Integrated Seed Sector Development
Jomo Kenyatta International Airport
Kenya Plant Health Inspectorate Service
Lamu-Southern Sudan-Ethiopia Transport Corridor
Ministry of Agriculture, Animal Industry and Fisheries
Multilateral Investment Guarantee Agency (of the World Bank)
Ministry of Finance, Planning and Economic Development
Ministry of Health
Maximum Residue Limit
Micro, Small and Medium Enterprise
Metric tons
Ministry of Trade Industry and Cooperatives
Megawatts
Ministry of Water and Environment
National Agricultural Advisory Services
Uganda National Export Strategy
National Organic Agricultural Movement of Uganda
National Agricultural Research Organisation
Non-Governmental Organisation
National Development Plan
National Planning Authority
National Plant Protection Organisation
5
NSQP
NQI
NSQP
NTB
PC
PCE
PG
PMC
PPP
PQIS
PRA
QUISP
RASFF
RNE
RTC
SEATINI
SPS
STDF
TBT
TMEA
ToR
UAA
UAE
UCA
UEPB
UFAAS
UFEA
UFVEPA
UgoCert
UGX
UHEPA
UIA
UK
UNADA
UNBS
UNFFE
URA
USAID
USD
WB
WTO
YOY
National Standards and Quality Policy
National Quality Infrastructure
National Standards and Quality Policy
Non-Tariff Barrier
Phytosanitary Certificate
Phytosanitary Capacity Evaluation
Project Grant
Project Management Committee (of STDF/PG/543 / RNE)
Public Private Partnership
Phytosanitary and Quarantine Inspection Services (of MAAIF)
Pest Risk Assessment
Quality Infrastructure and Standards Programme
Rapid Alert System for Food and Feed
Royal Netherlands Embassy (in Uganda)
Rural Transformation Center
Southern and Eastern African Trade, Information and Negotiation Institute
Sanitary and Phytosanitary Standards
Standards and Trade Development Facility (WTO)
Technical Barriers to Trade
Trademark East Africa
Terms of Reference
Uganda Agribusiness Alliance
United Arab Emirates
Uganda Cooperative Alliance
Uganda Export Promotion Board
Uganda Forum for Agricultural Advisory Services
Uganda Flower Exporters Association
Uganda Fruits and Vegetable Exporters and Producers Association
Uganda Certification Ltd
Uganda Shillings
Uganda Horticulture Exporters and Processors Association
Uganda Investment Authority
United Kingdom
Ugandan National Agro-Input Dealers‟ Association
Uganda National Bureau of Standards
Uganda National Farmers Federation
Uganda Revenue Authority
United States Agency for International Development
United States dollar
World Bank
World Trade Organisation
Year On Year
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EXECUTIVE SUMMARY
Uganda Agribusiness Alliance (UAA) conducted this market study as part of the larger
project titled, “Enhancing the capacity of the Fruit and Vegetable Sector to comply with
Phytosanitary Requirements for export to EU, other high end markets and regional
markets” (STDF/PG/543 / RNE). The purpose of this market study was “to assess
opportunity to increase fruit and vegetable exports to both new and current markets with
improved SPS compliance”. The study was done as a prerequisite to generate
information to be used to develop in drafting a “Uganda Export Marketing Strategy for
Fresh Fruits and Vegetables” (Output 5.2 of the STDF/PG/543/RNE).
Suggestions for fresh fruits and vegetables which held promise for increased exports to
new and current markets were solicited from Ugandan exporters, from members of the
Program Management Committee for this project, and from other key informants; more
suggestions were added from the Kilimo Trust research (see below) and from research
by UAA on high value FFVs with strong international market demand. The result was 72
fresh fruits and vegetables (FFVs) to be initially considered for increased export from
Uganda. These FFVs were then evaluated by several criteria including the difficulty of
complying with SPS requirements (pest and disease risks in particular); and difficulty in
meeting other market requirements including quality, quantity and consistency of
supply. This initial list of 72 FFVs was reduced after eliminating 34 from consideration
mainly because either pest and disease risks were very high, and/or there was not an
apparent high demand for them in high value markets in the EU, Middle East or China.
The remaining 38 FFVs considered to have “promise” for increased export from Uganda
are shown in Tables 2 and 3 of this study with comments on how well they meet the
criteria.
As part of this market study, Kilimo Trust Uganda was subcontracted to research the
FFV export economy in neighboring Ethiopia and Kenya. The main purposes for this
research was (1) to identify fresh fruits and vegetables exported by Kenya and Ethiopia
“which have the most potential relevance to Uganda‟s climate, geography and
landlocked situation, including in particular lightweight and/or high value specialty
foods;” (2) to identify “policies, systems, and infrastructure (financial, organizational,
physical) [that] Kenya and Ethiopia have put in place to build this sector along the value
chain;” (3) to determine what the “self regulating environments are, if any, for the private
sector that Kenya and Ethiopia are using to ensure competitiveness and sustainability;”
(4) to summarize what “requirements/ favourable environment that Uganda should
consider when initiating trade in lightweight and/or high value specialty foods exported
by Kenya and Ethiopia.” Research was done by Uganda Agribusiness Alliance to
compare the corresponding information for Uganda for topics #2 and #3 above; these
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findings and the research findings by Kilimo Trust have been integrated into and
referenced in this market study (Kilimo Trust, 2019.). One of the most startling findings
in the Kilimo Trust research was that 80% of fresh produce exports from Kenya are
produced by smallholder farmers. This finding holds particular interest for Uganda,
where reaching scale to supply FFVs in the demanded volume for export is difficult
because of the predominance of smallholder farmers in production. After much
research, UAA found a study detailing the development of productive arrangements
between Kenyan exporters of FFVs and Kenyan smallholder FFV farmers that has
enabled Kenya‟s remarkable growth of export in FFVs (Agwang, 2018.)
A recent market study conducted for ISSD Uganda by Wageningen Economic Research
looked at the competitiveness of Uganda FFVs; those findings are referenced in this
study as well. (Dijkxhoorn et al, 2019.)
The report draws seven main conclusions from all this research:
(1) Ugandan exporters of FFVs are mainly supplying the ethnic markets in the EU which
are much more limited in size and have less stringent requirements than the larger
conventional markets; and that if Ugandan exporters decide they want to reach these
larger markets there must be significant increases, beyond current practice in Uganda,
both in scale of production and in quality of produce.
(2) There are many opportunities for Uganda to increase exports of FFVs which have
manageable pest and diseases and demand in high value markets, some are FFVs
currently exported on a small scale; some are “new” varieties of FFVs; some are
produced in Uganda but not mainly as export crops
(3) Some FFVs can be exported initially for smaller ethnic and niche markets but can
transition to larger conventional markets as production capacity is built up over time.
(4) In addition to the international market for exports, the regional market is providing
opportunities. The demand for fruit and vegetable has increased in the last decade and
is likely to increase; some of this demand may be to top up production for export.
(5) Kenya‟s successful experience of working out innovative arrangements between
FFV exporters small holder farmers can provide valuable insights into overcoming the
difficult problem of increasing scale while depending on smallholder farmers to produce
FFVs.
(6) Though Uganda has a few elements of an enabling environment provided by the
public sector for FFV exports, an examination of Ethiopia and Kenya suggest that other
very important parts are missing in Uganda; including prioritization through key policies,
dedicated institutions, meaningful financial incentives, and development of key
infrastructure which support the production and export marketing of FFVs.
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(7). Uganda‟s exporter associations need to be stronger to provide members with the
information, guidance and services needed to supply high-value export markets with
their stringent requirements.
Finally, this report makes six main recommendations:
(1) Exporters in Uganda need to identify which market they intend to supply: the
volume-limited but less stringent ethnic market in the EU or the larger and more
stringent conventional market of the EU, Middle East, and other high value destinations.
Serving the smaller markets may limit possibilities of growing the export business but
serving the larger require investment of resources (and time) to meet standards.
(2) If exporters want to scale up export volume, they need to evaluate carefully the
pathway they will use to scale up, and understand how this varies depending on the
FFV chosen. With herbs and smaller vegetables, acquiring acreage can work, but to
scale up the production of tree fruits, there must a strategy of aggregating the
production of many smallholder farmers.
(3) The public sector (government) in Uganda must prioritize development of export
horticulture-related institutions, policies, and incentives.
(4) Both the public and private sectors in Uganda must develop strong mechanisms and
institutions for enforcing quality and standards leading to export market [value chains]
which are stringent and dynamic including strengthening the relevant institutions; their
policies and activities, including enforcement; and improved enforcement of contracts
between farmers and exporters.
(5) The public sector in Uganda should provide incentives to private sector to catalyze
farmer organizations, including providing conducive infrastructure (storage, cold chain,
irrigation, roads and transport) including in rural areas where strategic FFVs are grown.
(6) Private sector bodies, particularly exporter association(s) should be strengthened to
address sector-wide coordination and challenges, and should develop means of
enforcing quality and standards to strengthen export market value chains. This should
include promoting adoption of GlobalGAP; developing a common code of practice; and
promoting the key lessons from the successful ongoing business interaction between
Kenyan exporters and smallholder farmers.
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PART I: INTRODUCTION
I-A. Background to the Fresh Fruit and Vegetable Market
Study
Uganda‟s Ministry of Agriculture Animal Industry and Fisheries (MAAIF) through its
Department of Crop Inspection and Certification (DCIC) is implementing the project
Enhancing the capacity of the Fruit and Vegetable Sector to comply with Phytosanitary
Requirements for export to EU, other high end markets and regional markets
(STDF/PG/543 / RNE). The project‟s overall goal is to improve market access to the EU,
other high-end markets and regional markets for Ugandan fresh fruits and vegetables
(FFVs). Its key purpose is to improve Uganda‟s compliance with international
phytosanitary standards for production and export of FFVs to international markets,
including the EU, as well as to regional markets. This will enable the country to improve
its access to the European Union‟s (EU), regional and other high-end markets leading to
growth of the sector. Sustained incomes to FFV producers and their employees will
contribute to economic growth, poverty reduction and food security in line with Uganda‟s
development policy and the vision of the funders. The project funded by the Standards
and Trade Development Facility (STDF) of the World Trade Organisation (WTO) and
the Royal Netherlands Embassy (RNE) of Uganda; and it will run from February 2019 to
January 2022.
As part of that project, Activity 5.1 states that there will be a “Market study to assess
opportunity to increase fruit and vegetable exports to both new and current markets with
improved SPS compliance”. This market study is a prerequisite to generate information
that will be used to develop Uganda‟s Export Marketing Strategy (Project Activities 5.25.4). Uganda Agribusiness Alliance has been contracted to carry out this market study.
I-B. Market Study Scope and Objectives
I-B-1 Scope of Study
The UAA Team, led by Steve Hodges, implemented the study as outlined in the project
document and detailed below:
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“Market study to assess opportunity to increase fruit and vegetable exports to both new
and current markets with improved SPS compliance” (Activity 5.1)
1.
The UAA Team will request suggestions on fresh fruits and vegetables to be
studied from exporters, importers and others on the Project Management
Committee, and will conduct secondary source review of sources in public
domain. The team will share with PMC the list of interviewees as well as the
check list for interviews for PMC input.
2.
The UAA Team will conduct followup interviews with sources of information,
including in-depth trade interviews with exporters, government officials and other
key informants in Uganda.
3.
The fresh fruits and vegetables selected for focus will be evaluated by the UAA
Team according to criteria that are key to successful ongoing export sales.
Constraints will be noted which make the items less promising, and interventions
will be identified that might increase their promise. Criteria will include
a) the manageability of regulatory, quality and market requirements. This
includes SPS requirements, and whether a PRA (Pest Risk Assessment) has
been done and if so what the results are. If a PRA has not been done, it may
be recommended as an intervention. Depending on the fruit or vegetable the
criteria may also include other market requirements including variety,
appearance, size, organic production, etc.
b) the ability to produce at the scale needed to meet projected ongoing market
demands
c) ability to deliver the produce in time, place and form desired by the importers
at prices lower or at par with current exporters in Uganda and neighboring
countries, i.e., insights into Uganda‟s competitiveness in the region –
challenges and opportunities. This information will be sourced from the
Wageningen Economic Research study and referenced in the study report
d) the existence of value chain structure and linkages conducive to a marketbased approach, including channels which provide ongoing extension to
growers on practices to achieve and maintain quality and quantity of product
needed to meet market demands (e.g. effective farmer groups, outgrower
networks, NGO or government extension and advisory services, etc.); What
are the critical challenges and opportunities to address them
e) strength and interest of the private sector in production and exporting of
selected commodities. This information will be generated by UAA through
survey of exporters in Uganda
f) the status of a conducive environment for production and exporting of
selected produce including government policy
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4.
UAA will (i) Identify opportunities and gaps, in Uganda‟s policies; infrastructure;
and producer/exporters self-regulating environment (for ensuring
competitiveness and sustainability), that would support or limit the establishment
of trade in the selected commodities. (ii) draw recommendations on how
opportunities can be utilized and gaps addressed (where possible) in order to
support export trade of selected commodities. In order to generate this
information UAA will undertake the following
a) make reference to findings of sub-contracted research by Kilimo Trust that
describes the policy, infrastructure and self-regulating environment in Kenya
and Ethiopia; and integrate the findings into the market study; conduct a
similar study of the policy, infrastructure and self-regulating environment in
Uganda to that done in Kenya and Ethiopia and compare the findings with
those of Kenya and Ethiopia
6.
The final approved draft of this study will be used by PMC in drafting a “Uganda
Export Marketing Strategy for Fresh Fruits and Vegetables” (Output 5.2 of the
Project: “Enhancing the Capacity of the Fruit and Vegetable Sector to comply
with Phytosanitary Requirements for Export to EU, Other High End Markets and
Regional Markets,” STDF/PG/543 and RNE).
I-B-2 Objectives of Study:
Objective 1. A qualified list of FFVs to be studied as the focus of this report, including
FFVs not yet exported from Uganda in large volume, will be gathered from a desk
review of secondary sources in the public domain and from suggestions by key
informants; and will be qualified by follow up questions to these persons making
suggestions.
Objective 2. The list of FFVs resulting from the activities in Objective 1 will be evaluated
according to criteria deemed key to successful ongoing export sales to high value
markets.
Objective 3. Opportunities and gaps in Uganda‟s policies; infrastructure; and
producer/exporters self-regulating environment that would support or limit the
establishment of trade in the selected commodities will be identified, particularly as
compared with Kenya and Ethiopia.
Objective 4. Conclusions and recommendations will be proposed on FFVs for new and
increased export and on how opportunities can be utilized and gaps addressed (where
possible) in order to support export trade of selected FFVs.
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I-C. Study Methodologies
I-C-1 Methodology for selection of FFVs for the focus of this study
a) PMC members were requested by email to suggest FFVs for consideration
b) Question was included as part of Diagnostic Mapping Questionnaire to exporters
and other experts in export of FFVs asking “Are there fresh fruits and vegetables
which are not yet being exported from Uganda in big quantity that you think might
be profitable? What are they?”
c) List of persons making suggestions, and proposed follow up questions were sent
to PMC for input (none received.)
d) Follow up questions were sent by email to those suggesting FFVs to ask, what
are your reasons for suggesting this particular fresh fruit or vegetable for
increased export from Uganda? What particular markets do you think there are
for this fresh fruit or vegetable?
e) Desk research was conducted to identify FFVs with market demand in high value
markets of EU, Germany, Finland, Saudi Arabia, and China.
f) The resulting list contained 72 FFVs.
I-C-2 Methodology for evaluation of suggested FFVs
a) Information was gathered on pest and disease risks of each suggested FFV
b) Thirty-four (34) FFVs were eliminated from consideration because pest and
disease risks are very high, and/or there is not an apparent high demand for
them in high value markets in the EU, Middle East or China.
c) The resulting list of 38 FFVs was sent to 31 exporters (previously chosen by the
SPS Diagnostic Mapping Advisory Panel in March 2019 as representative of the
most active and experienced exporters in Uganda) to determine the strength of
interest in the private sector in the resulting FFVs; the exporters were asked
which of the 38 FFVs on the list they might have interest in exporting in the
future. Sixteen (16) of the 31 exporters (52%) replied. Those FFVs getting
positive response from at least half of the exporters who replied (11 FFVs) were
considered to have strong private sector interest, and were chosen as the focus
of the market study.
d) An analysis was done of the ability of the 38 FFVs to meet each of the 6 criteria
detailed in section II-A below ; Table 2 in section III-B and Table 3 in section III-C
below compare the ability of each FFV to meet these criteria.
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I-D. Strategies Used in Market Study
The following strategies were used in this market study:
1. Choosing to focus on FFVs which are not yet exported at all or are exported in
small quantities, as a way to encourage exporters to think “out of the box” to
expand their export activity with FFV varieties that hold promise for being
profitable, rather than only focusing on currently exported FFVs which are
experiencing substantial SPS problems
2. Using strong indication of market demand in a high value market as a key factor
for selecting FFVS for this list of “promising” FFVs.
3. Using a high degree of potential SPS problems (mainly pest and disease
problems) as a key factor for eliminating FFVs for this list of “promising” FFVs
4. Using the degree of private sector (exporter) interest in exporting suggested
FFVs as a key factor for selecting FFVs for the final list of “promising” FFVs.
PART II: BACKGROUND ON FRESH FRUIT AND VEGETABLE EXPORT
MARKETING IN UGANDA
A recent study commissioned by ISSD Uganda reported “Uganda is the second largest
producer of fresh fruits and vegetables in sub-Saharan Africa, after Nigeria, producing
about 5.3 million tonnes per year according to recent FAO statistics” (Dijkxhoorn, Youri
et al., 2019). The European Union historically has been the main high-value market for
Ugandan FFV exports. A statistical overview published online in June 2019 by
Eurostat, the Statistical Office of the EU stated that “In 2015, the EU imported fruit and
vegetables from third countries with a value of about EUR 19.1 billion. Fruit imports
were much more significant than vegetables, accounting for 88.4 % of the total. Fresh
and dried nuts were the most imported crops (26.2 %) in terms of value, followed by
bananas (17.7 %), dates, figs, pineapples and avocados (together 11.5 %), grapes
(9.9 %) and citrus fruits (9.1 %)…. Imported fruit and vegetables entered the EU by sea
(73.4 % in value), road (18.9 %) and air (6.8 %).” (Eurostat, 2019). More recently, in
2019 Fresh Plaza reported that in the EU “imports of fresh vegetables from non-EU
countries in 2018 increased by 7% in volume, with 2.3 million tons, and decreased by
3% in value, with 2,621 million euro. The tomato was the most purchased vegetable
with 628,067 tons in 2017, (+10%), and a value of 671 million euro (+3%). It was
followed by potatoes, with 362,440 tons (-16%), pepper with 261,904 tons (+14%) and
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onions with 289,463 tons (+18%). Fruits imports from non-EU countries also grew by
7% in volume, standing at 14.2 million tons, and 5% in value, with 14,318 million euro.
The most imported fruits were bananas with more than 5.9 million tons and pineapples
and oranges, both with more than one million tons sold.” (Fresh Plaza, 2019.),
However, destinations other than the EU also offer potential high value markets for
Ugandan FFV. For example, in Saudi Arabia “The prices of vegetables, especially
tomato and okra, have witnessed an increasing trend during the first half of the second
quarter of 2018. This sharp hike in the price is mainly due to the declining supplies from
major vegetable supplying countries. Generally, during the months of AugustSeptember (off-season) the prices of vegetables are up, owing to the shortage of
supplies due to high temperatures and limited supplies from Turkey. The consumption
of vegetables is poised to increase, due to the people being educated and made aware
of the health benefits of vegetable consumption…. Saudi Arabia is mostly self sufficient
in terms of vegetables. However, with regard to fruits, the country has to rely on imports
from other countries to cater to the domestic demand. As Saudi Arabia is highly reliant
on imports, it is exposed to international price fluctuations, Because of this, the
customers may opt for low-priced alternatives rather than high-priced commodities.
Saudi Arabia is a religious hub, with people from all parts of the world visiting the
country at regular intervals. But the prices skyrocket during the holy month of
“Ramadan”, when commodities, especially fruits and vegetables, are available at three
to four times their original prices, due to their high demand and limited supply.” (Mordor
Intelligence, “Saudi Arabia”, 2018.)
Likewise in the United Arab Emirates (UAE), “the UAE fruits and vegetables market was
valued at USD 3,731.0 million in 2018, and it is projected to reach USD 6,376.9 million,
with a CAGR [Compound Annual Growth Rate] of 9.34% during the forecast period
(2019-2024). The drivers identified in this market are favorable government policies, an
increase in consumption of fruits and vegetables due to health consciousness, and
strong distribution and retail network….Demand for fruits and vegetables in the United
Arab Emirates (UAE) is projected to grow at a rapid rate, in the coming years.” (Mordor
Intelligence, “United Arab Emirates”, 2018.)
China also represents a growing market for exporting FFVs: “Imports of fresh fruit into
China continued a trend of strong growth in 2018. Through the first 11 months of the
year, imports into China for goods in the category of edible fruits and nuts totaled 5.16
million tons, with a value of $7.58 billion. These figures represent a rise of 25.7% in
volume and 34.4% in value compared to the same period a year earlier. Key factors
influencing imports of fresh fruits into China in 2018 included continuous growth in
Chinese consumer demand for fruit, expanded market access in China for more types
of fruit from new regions, faster customs clearance, the ongoing trade friction between
15
China and the US and new Chinese MRL standards.” Of these fruits, bananas were the
most imported in terms of volume (1.54 million tons) and third highest in terms of value
at $1.3 billion USD, up 60.42% YOY (year-on-year). (Siekman, 2018.) China also
imports vegetables though at a lower volume than fruits; vegetable imports to China in
the one year from May 2018 through April 2019 amounted to approximately $1.7 billion
U.S. dollars. (Statista.com, 2019.)
Over the years, Uganda‟s exports of edible vegetables, fruits, nuts, certain roots and
tubers have strongly increased (albeit with some fluctuations) as given in the following
Table 1. According to PQIS (Phytosanitary and Quarantine Inspection Services, of the
Department of Crop Inspection and Certification in MAAIF) inspector reports, exports to
the EU represent approximately 60% of all FFV exports, with the other 40% going
mainly to the Middle East and very little going to neighbouring countries. In particular,
roughly 27 % of the Ugandan Chillies (Capsicum) production was exported to the EU in
2015. (Department of Crop Inspection and Certification, 2018.) A recent study done for
The Wageningen Economic Research study found that “current volumes of exports of
fruits and vegetables from Uganda are estimated by COMTRADE to be almost 400,000
tons of produce with a value of USD118m in 2017. Most of the exported produce are
vegetables….The key product exported are capsicums (Hot pepper including Scotch
Bonnet, Habanero, chillies, etc.)…. Hot peppers are mostly bought by traders who sell
the produce on the export market that cater the EU ethnic market. Other important
vegetables for this market are Okra and garden egg…. This niche market is relatively
limited in size and requires only the bare minimum legal requirements regarding MRLs
and phytosanitary aspects for entering the market.” (Dijkxhoorn, Youri et al., 2019) In
other words, the study found that almost all of Uganda‟s exports to the EU are to the
ethnic market of Africans and Asians living in European countries, not to the larger
conventional market. Nevertheless, the export of FFVs, particularly chillies, is very
important for the stakeholders in the FFV value chain.
Table 1. Values (in thousand €) and quantities (in MTs) of FFV from Uganda to the EU and selected
countries within the EU (Source: European Commission, 2019)
Exported values in thousand €
Exported Quantity in MT
Importer
2015
2016
2017
2018
2015 2016 2017 2018
Product group 07: Edible vegetables and certain roots and tubers (including
chillies)
EU (total)
10,137 10,944 10,547 11,483 3,787 4,787 5,218 5,718
UK
5,750
5,736
5,564
6,011
2,222 2,883 3,235 3,422
Netherlands 2,173
2,078
2,065
1,876
545
610
663
596
Certain exported products (curry leaves, hot peppers (= Capsicum), jack fruit, bitter
gourd, soursop, mango, basil, okra, and some minor FFV commodities) have been
severely affected by SPS measures and the reduction is a result of incompetence in the
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production and management of the HOs (harmful organisms) that are regulated by the
EU. As a result, most of the products cannot comply with EU Phytosanitary
requirements, or with the relevant international standards.
Recent research by Kilimo Trust found that according to statistics from the International
Trade Centre (International Trade Centre, “Uganda”, 2019), “Uganda exports of fruits in
annual average annual volume in the period 2008 to 2018 were dominated by banana
(3,667 MT) oranges (3,195 MT) as well as mangoes (2,210 MT) in fresh or dried form.”
During the same period, fresh or dried pineapples valued at an annual average of USD
$645,180 and fresh berries valued at USD $440,000 (representing only 434 MT) were
exported from Uganda, replacing oranges and mangoes respectively. According to
figures from the Ministry of Agriculture, Animal Industries and Fisheries, Uganda
produces 875,000 metric tonnes of mangoes annually and imports around 1,537 metric
tonnes (Fresh Plaza, 2017). In research conducted for this market study, Kilimo Trust
research further found that:
“Fresh beans, potatoes and tomatoes recorded the highest volumes of exports
by Uganda in the period 2008-2018 at an annual average figure at 5,561 MT,
4997 MT, and 3,582 MT….Value of these exports was directly proportional to
their volume at USD 1,727,000 for fresh beans, USD 1,637,000 for potato and
USD 995, 000 for tomatoes during the same period …. Other vegetable that
Uganda exports according to ITC [International Trade Center] are peppers,
onions, and peas. Time series data on spices that Uganda exports such as
vanilla and ginger was not widely available and where it was, it was categorized
as a “vegetable”. As such, where data was available, it emerged that although on
average Uganda exported 100MT of vanilla annually, the product fetched on
annual average USD 4,412,000, more than three times the value of fresh beans.
This underpins the need for Uganda to promote increased production and export
of such high-value products.” (Kilimo Trust, 2019)
Recent data from the United Nations Comtrade Database tell a similar story. According
to their website, fresh vegetable and fruit exports from Uganda were valued at
$134,185,112 in 2018. This represents approximately 11.5% of all food exports by value
from Uganda and 4.8% of exports of all kind by value from Uganda. Of the total FFV
exports in 2018, 93.7% by value ($125,816,735) were fresh vegetables, and 6.4%
($8,638,377) were fresh fruits. Of all fresh fruit exported in 2018, by value, pineapple,
avocado and guava was 29.8% ($2,571,860); citrus was 28.7% ($2,481,890); and
mango was 12.9% ($1,111,778.) Of all fresh vegetables exported in 2018, tomatoes
were 2.6% ($3,268,773); fresh (not dried) beans were 1.3% at $1,631,594 down from
2017 when they were $8,178,994; and peas were 1.1% ($1,416,450). Cassava exports
were valued at $5,198,893 but this included dried as well as fresh cassava. Vanilla
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represented $8,164,014 in exports, nearly the same amount as all fresh fruit exports
combined. (UN Comtrade Database, 2019.)
A new Plant Health Regulation was agreed in 2016 by the EU (Regulation (EU) 2016/
2031) and is due to come into force on December 14, 2019. This new Regulation
focuses on improving biosecurity, plant health awareness and it applies a risk based
approach to plant health. Under this new Regulation, from 14 December 2019 certain
plants will be prohibited from entering the EU until a full risk assessment has been
carried out. These are plants from third countries which were deemed, following several
assessments, to present an unacceptable level of pest risk to the EU. As such these
plants were added to a list of „High Risk Plants‟. Commission Implementing Regulation
(EU) 2018/2019 establishes the list of high risk plants. Under the new Regulation there
will be a system whereby the National Plant Protection Organisation (NPPO) of third
countries will be able to submit a Pest Risk Analysis (PRA) to justify the trade in plants
listed in the High Risk Plant category to the EU. This PRA will then be forwarded to
EFSA (European Food Safety Authority) for assessment. EFSA has begun accepting
and analyzing PRAs from third countries. The rules concerning the procedure to be
followed in order to carry out the risk assessment of high risk plants are detailed in
Commission Implementing Regulation (EU) 2018/2018, which can be viewed on the EU
Commission Website. (Ireland Department of Agriculture, Food and the Marine, 2019.)
In addition to the high value markets listed above, there is potential for Uganda to
expand somewhat lower value, but also less difficult exports already underway to
regional neighbors. As the Wageningen Economic Research study observes, “Uganda‟s
location at the centre of the Great Lakes region and in the EAC offers Ugandan farmers
access to a regional market with over 150 million consumers.” (Dijkxhoorn, Youri et al.,
2019). For example, the study further observes that the main exports from Uganda to
Kenya are:
a) Banana: Imported through the year; greatest demand is for cooking banana
varieties as Kenya has an adequate supply of ripening bananas. Three trades
reported to import ripening banana recently when Kenya had inadequate supply
due to climate change and increased banana panama disease which is impacting
the Mount Kenya production region. Upon fact finding, it was found that there is
also a significant problem of fusarium wilt and nematodes in the Mount Kenya
region especially bananas from tissue culture production as farmers do not
manage hygiene in the field and they are susceptible to the same. Imported
throughout the year are cooking bananas which are in shorter supply than the
ripening bananas.
b) Pumpkin: Kenya imports pumpkins from Uganda year round due to production
shortages, inadequate volumes for aggregation in the areas that pumpkins grow.
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There is a culture of farmers using pumpkin leaves as vegetables and only
growing pumpkins as border crops as they are low value.
c) Oranges and Tangerine: Oranges are imported into Kenya from Uganda April to
May as seasons differ. Kenya used to produce a lot of oranges in the same
season in Thika, Machakos and Embu regions. However, the citrus greening
disease wiped out production in these areas 10 years ago and the regions have
not gone back into production. There are pockets of production but the volumes
are mainly consumed in the same regions. Oranges are produced in the lower
parts of the former Eastern provide and coast especially in Kwale, Kilifi and lower
Tana. Infrastructure and aggregation constraints restrict these regions access to
market. There are new plantings in medium scale farmers in Kibwezi County
producing export varieties as they also export mangoes from the region. Kenya
does not produce tangerine relying mainly on imports from South Africa and
Egypt. Uganda fills the gap in April and May.
d) Lemons: they are grown in coastal Kenya with limited volumes and shipment to
Nairobi. Kenya relies on Tanzania and Uganda plus a limited quantity from Mt.
Kenya and Kibwezi region. These regions do have potential and if production
improves will supply more citrus to the market than currently structured.
Investments from Counties are prioritizing citrus especially in Kibwezi, Kilifi and
Kwale. It is however to be seen how this will improve production and productivity.
e) Pineapples: Pineapples in Kenya are mainly grown in Thika, Malindi and Kisii.
However, during the cold season, there is limited harvest of pineapple especially
June to September. It is this window that Kenya imports pineapple from Uganda.
The taste of pineapple from Kisii region is similar to that of Uganda which means
that traders who buy pineapple from the region prefer to purchase Uganda
fruits…. Homabay County is promoting planting of pineapple which may allow
year round supply from Kenya as the weather is hot and new smallholder
irrigation may grow the region market share. However, it is not yet clear how new
plantings will impact the market as the scale is still small.
f) Water Melon: Water Melons in Kenya are grown by medium scale farmers as
production requires scale and investments. Production is limited in the months
June to September due to the cold weather and susceptibility of diseases making
it expensive for the producers to grow during this season and the costs from
Uganda lower. Medium scale farmers prefer contract production and as water
melons are controlled by a select number of traders who dictate prices and
sourcing trends, smaller wholesalers who cannot engage in contract production
opt to buy from Uganda where volumes are sufficient. We found trading relations
outside the shortage window among emerging wholesalers not connected to
wholesale markets who import from Uganda year round. These traders are few
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and mainly supply into hotels and institutions making them less visible than the
traders in wholesale markets.
PART III: FRESH FRUITS AND VEGETABLES WITH PROMISE FOR EXPORT
As described above, a list was developed of FFVs which (a) currently were not yet
being exported from Uganda, or (b) were being exported but in small volumes, and (c)
which might have promise for increased export from Uganda. This list was developed
through several methods. First, 11 members of the Project Management Committee of
the STDF/PG/543 /RNE Project were requested by email to suggest FFVs for
consideration; 2 members responded, offering 9 ideas of FFVs to consider. Secondly,
the same question was included in a Questionnaire given to exporters and other experts
in export of FFVs as part of an SPS Diagnostic Mapping Study conducted in March-May
2019; of these, 9 replied and another 32 ideas for FFVs to consider were added this
way, making a total of 41 suggested FFVs. Then the list of persons who had made
suggestions of FFVs, and a list of proposed follow up questions were sent to PMC for
input, (however no further input was received.) Third, follow up questions were sent by
email to the 12 persons which had to that point suggested FFVs; the questions were
“What are your reasons for suggesting this particular fresh fruit or vegetable for
increased export from Uganda?” and “What particular markets do you think there are for
this fresh fruit or vegetable?” Four persons replied by providing more information on the
FFVs they had suggested. Fourth, this list of 41 FFVs was supplemented by (a) desk
research done by UAA to identify additional FFVs with market demand in high value
markets of EU, Germany, Finland, Saudi Arabia, and China; and (b) by market research
done by Kilimo Trust Uganda for this study, of FFV exports from neighboring Kenya and
Ethiopia, commissioned to provide input to this study. In these ways an additional 26
FFVs were identified through these means, bringing the resulting list to 72 FFVs to be
evaluated.
III-A. Criteria for Evaluating Promise for Successful
Ongoing Export sales
Six criteria were used to evaluate the 57 FFVs which had been identified; each of these
six criteria is explained below.
1. Manageability of regulatory, quality and market requirements for the FFV (both
SPS and other requirements)
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2. Ability to produce the FFV at the scale needed to meet projected ongoing market
demands
3. Ability to produce the FFV at the consistency needed to meet projected ongoing
market demands
4. Existence of value chain structure and linkages for the FFV conducive to a
market-based approach
5. Regional competitiveness in price and delivery of the FFV
6. Interest by private sector to invest in production and export of the FFV
In addition, a factor affecting all FFVs virtually equally was the status of both
government and private sector policies, self-regulating mechanisms and infrastructure
to support the FFV export sector.
III-A-1. Manageability of regulatory, quality and market requirements
The manageability of market requirements is a major consideration in selecting FFVs to
export. Instead of starting with an FFV and looking for a market, the wise exporter starts
by identifying a market and understanding what the requirements are to export to that
market, including the specific varieties of FFVs desired by that market and other
preferences such as size, appearance, organic origin, etc. Different markets, such as
the conventional market in the EU or the Middle East, may prefer varieties which are
different from those commonly grown in Uganda. For example, the EU conventional
market prefers commonly traded avocado varieties like Hass or Fuerte rather than the
jumbo varieties (Semil, etc.) more commonly grown in Uganda. Likewise, even though
Uganda is the 3rd largest producer of sweet potatoes in Africa (Kabirizi, 2019), there is
very little market in the EU for the varieties of sweet potatoes grown in Uganda while the
market is strong for varieties like American Covington and Spanish Beauregard (CBI,
“Sweet potatoes” 2019) . Ethnic markets in the EU are easier to grow for, since the
varieties desired are often those already grown in Uganda. But for all export markets,
meeting sanitary and phytosanitary standards for the exported FFV is a basic necessity,
as experienced exporters in Uganda know well. Consequently, understanding the SPS
challenges of an FFV, including likely pest and disease problems, is an important
consideration in choosing an FFV to export. Increasingly, to reach high value markets
such as the conventional market in the EU the exported FFV must meet standards
beyond successfully managing SPS issues like pests and diseases. There is a strong
preference in the EU conventional market is for FFVs grown to meet GlobalGAP
standards, so in order to compete with others exporting to that market, meeting
GlobalGAP standards is virtually a requirement though not technically a legal one for
exporting to that market. Organic market standards are even harder to meet, requiring a
more limited range of inputs allowed to be used, and requiring more inspections and
periodic certification all of which bear a higher cost, though the price received for
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organic FFVs that meet all these requirements can be significantly higher and for some
will justify the higher cost of production.
III-A-2. Ability to produce at the scale needed to meet projected ongoing market demands
Even if the FFV desired by the market can be produced within the required SPS and
other standards, it must be produced in the volume desired by the market. For the
conventional markets, and even sometimes for ethnic and other specialty markets, the
volumes desired by the market are often larger than the exporter can supply. Those
FFVs which are annual plants are somewhat easier to produce in volume since the
acreage required is less than for tree fruits which require larger acreage to supply the
volume required. Yet most tree fruit production in Uganda is still by smallholder farmers,
so the problem of assembling sufficient volume of tree fruit meeting required standards
is one of aggregating fruit from many smallholder farmers, often geographically
dispersed; this increases the logistical difficulty and expense of the task, as well as
making quality control more difficult given the multiple sites and actors involved in
production. Yet despite these difficulties, Kilimo Trust reports that 80% of fresh produce
exports from Kenya are produced by smallholder farmers; and two largest fruit exports
from Kenya are tree fruits: namely avocado (29,397 MT per year) and mango (12,174
MT per year) in the decade between 2008 and 2017 (International Trade Centre,
“Kenya” 2019.) See section III-A-4 below for the results of a study on how this works in
Kenya, with possible application for Uganda.
III-A-3. Ability to produce at the consistency needed to meet projected ongoing market
demands
Almost all FFV production in Uganda is rain-fed, meaning that despite a favorable
equatorial climate, the production of fresh fruits and vegetable production for export is
almost completely dependent on the two rainy seasons per year. Yet export markets
(ethnic and specialty as well as conventional) often prefer a steady year-round supply of
FFVs, so Uganda is a competitive disadvantage with other sources of FFVs which can
produce year-round because of public and private sector investment in irrigation (see
Table 4 for comparison with Kenya and Ethiopia. )
III-A-4. Existence of value chain structure and linkages conducive to a market-based
approach
A strong value chain structure, with clear linkages, can not only reduce the transactional
costs of FFV production but can assure that FFVs can be produced, handled and
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exported on time and in accordance with the standards required by export markets. As
Tables 2 and 3 below indicate, few FFVs exported from Uganda have a well-developed
value chain structure with linkages such as exist for coffee, sugar cane and a few other
major crops in Uganda. As mentioned in III-A-2 above, this is complicated by the
logistical tasks required for exporting any FFV, for example tree fruits, which are
primarily produced by a large number of smallholder farmers in dispersed locations. As
mentioned above, given that 80% of fresh produce exports from Kenya are produced by
smallholder farmers according to recent research (Kilimo Trust, 2019), it is worth taking
a closer look at how this works in Kenya, since it may be very valuable to Uganda‟s
similar situation with smallholder farmers.
Small holder farmer participation in the Kenya FFV export value chain.
Fredrick Odhiambo Ajwang (The Open University, Milton Keynes, England) has recently
published a research study on the involvement, coordination, and regulation of
smallholder farmers in the Kenyan fresh fruits and vegetables export value chain
(Ajwang, 2018). He notes that as recently as 2006, 60% of Kenyan smallholder farmers
in the Kenyan FFV export value chain dropped out of producing for export. He notes
three reasons why the FFV export value chain is difficult for smallholder farmers to enter
and difficult for them to stay in:
1) Moral hazard: According to Ajwang, the main moral hazard problem is that even
when smallholder farmers have a contract, the temptation is great to engage in
side selling when market prices for what they are growing are higher than
contract. Often this is precipitated by middlemen who gain the trust of
smallholder farmers by telling them of changing prices, and then come offering to
buy when prices are higher than contract. In some cases competing exporters, in
order to top up volume to the level needed to meet a market order, hire
middlemen to approach the farmer offering a higher price than the one for which
they have a contract. Ajwang adds that this is especially the case with farmers
who are producing FFVs that meet GlobalGAP standards being demanded by
buyers.
2) Information impactedness: Ajwang explains that this a problem that results from
information asymmetry, when the exporter has more information on markets and
prices than do smallholder farmers, which makes the latter suspicious of the
intentions of the exporter, and open to influence from middlemen who are willing
to share such information (though they do it in a way that advantages them.)
Ajwang reports one farmer as saying, “The problem is that the exporter is not
telling the truth when the price changes so I also do the same and work with the
middlemen. If the exporter was to come and tell me „the prices for French beans
have gone up by KES 15 but we will deal with this when we are renewing the
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contract‟ I will not deal with the middlemen. So my problem is that the exporter is
not honest, so why should I be?”
3) Unenforceable contracts: Kenya has no systems in place for enforcing contracts
because of three reasons. First, according to Ajwang, Kenya has weak legal
institutions capable of governing and enforcing contract law; second, even if
contract law was in place and strong, the perishability of produce would make it
difficult for one party to sue the other and get the case resolved in time. Third,
written contracts can often be difficult to govern because the “distance and
uncertainty associated with international trade may amplify transaction costs
attached to monitoring, make formal contracts difficult to write and enforce.
Kenyan exporters have addressed the moral hazard problem in two ways. First, by
developing their own nucleus farms (“integrating backward”), many exporters were able
to ensure a predictable supply of produce at a low production price. This not only
provided stability for their export business, but also as they sought to buy produce from
smallholder farmers to top-up their volume, they were able to afford to accept higher
transaction costs including better prices for smallholder farmers. Second, some of the
exporters chose to outsource much of the management of the smallholder farmers
network, beyond the supply of training and inputs, by hiring one of the larger supplying
farmers as a “lead farmer” to manage the smallholder farmers and ensure that quality
standards were met.
At least some Kenyan exporters have addressed the mistrust resulting from information
asymmetry and impactedness by disclosing information on markets and prices and
agreeing to adjust the original contracted price at a later date. Ajwang quotes one
farmer as saying, “I don’t want to deal with the middleman, and for the last 6 months I
have kept off them because the current buyer (exporter) is good. We talk and he tells
me when prices are going up and we agree that at the end of the contract he will adjust
the prices up to cater for this. So even if the middleman comes and gives me KES 10
more for my (French) beans I turn him down. Why would I want to jeopardise my
relationship with the exporter who is good?”
Finally, given the unenforceability of written contracts, Kenyan exporters have worked to
develop high quality “relational contracts” with smallholder farmers, in part through
improving communication with the smallholder farmers in their network, showing they
listen and respond to their concerns, as well as disclosing market and price information
and being flexible on adjusting prices, as mentioned above. These exporters have
realized that though the cost of relating to smallholder farmers this way is higher in the
short term, it is not as high as the cost of being unable to provide a stable supply of
produce to the export market, and consequently developing a negative reputation (with
long-range implications for their business.) Likewise, smallholder farmers realize that
24
even though they have less flexibility when they are committed to a contract (even a
relational contract), they are better off in the long run by participating in an export
market than in a non-export market, because the contract provides more market
security. As one farmer told Ajwang, “When you have tried the export market, with all its
problems, you realise that it is better than the local one. There are so many middlemen
in the local market who buys the produce at their own prices and there is nobody to
protect you. Actually, in the local market you are not sure if there will be a buyer and
you have to go out there to look for them”.
In addition to securing the more reliable participation of smallholder farmers in the
Kenyan FFV export market, exporters increased their success in other way according to
Ajwang. One key way was organizing themselves for self-regulation to meet the
stringent market standards of the EU. (The fact that 5 of the largest exporters also
“integrated forward”, developing their own import company in the EU, no doubt
contributed to their immediate awareness of formal and informal EU market
requirements.) Among the recommendations at the end of his study, Ajwang calls for
increased funding for government bodies providing regulation including the adding of
capacity for contract enforcement and the strengthening of licensing including licensing
of middlemen who Ajwang suggests should be de-registered if they persuade farmers to
break their contract. Finally, he recommends tying the farmer-exporter contracts to the
European supply-demand cycle (i.e. Oct – April when demand is high during the cold
months in the northern Hemisphere) rather than contracting for one year as currently
done.
III-A-5. Regional competitiveness in price and delivery of the FFV
Another recent study “The Uganda Vegetables and Fruit Sector: Competitiveness and
Investment Opportunities” was commissioned by ISSD Uganda and carried out by
Wageningen Economic Research. One of the two main objectives of the study was “to
assess competitiveness of Ugandan producers of vegetables and fruits and to
recommend specific intervention strategies for Uganda.” The authors of the study
developed a holistic definition of competitiveness as: “the medium to long-run ability of a
firm or significant part of the firms in an industry to increase productivity and/or lower
costs in a sustainable way, and deliver goods and services at the time, place, form, and
quality sought by the targeted customer segment(s) at prices as good as or lower than
those of other potential suppliers whilst earning a reasonable profit and paying at least
opportunity cost of resources employed” (Dijkxhoorn, Youri et al., 2019 ).
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The same study suggested that several factors reduce Uganda‟s competitiveness in
export of FFVs: “Interviewed importers in the EU mention many challenges in the export
value chain, including a lack of cold storage, lack of traceability and certification, lack of
monitoring at farm level of chemical use, lack of adequate packing material among
others. In the case of beans and peas, the climatic conditions are not favorable (USAID,
2002). In the case of fresh tropical fruits, due to their weight, they are generally shipped
by sea and the distance to the nearest seaport is further away compared to countries
like Kenya and Tanzania…. At present, there is no commercial farmer in Uganda that is
producing fresh vegetables up to the standards of major European supermarkets.
Foreign supermarket requirements regarding quality, traceability, and food safety are
increasing and this leaves only space for serious and professional production of fresh
produce. In Uganda there is no producer nor exporter that has Global GAP certification.”
(Dijkxhoorn, Youri et al., 2019).
Recommendations by the Wageningen Economic Research study for improving the
competitiveness of the fruit and vegetable sector are almost all nonspecific, and a
familiar repetition of the findings of many studies which have been done of agricultural
value chains in Uganda:
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Interventions could be focused to improve quality of selected fruits and
vegetables at various stages of the value chain
Increase regulation and enforcement on the sales of agrochemicals and seeds
by agro-input dealers by ensuring that only licensed agro-dealers sell authentic
agrochemicals and that agro-input dealers sell quality seed (e.g. Ban
counterfeits)
Recruit extension workers equipped with knowledge and skills in fruits and
vegetables and facilitate them to undertake their work
[Develop] public private partnership in research and development in the
horticulture sector
Improve Good Agricultural Practices among the entire value chain
Increase training of agro-input dealers on quality specifications of the inputs and
their use and safe chemical handling
Improve sustainable and responsible pest control at farm level (e.g. Adoption of
Integrated Pest Management; IPM) and more awareness among traders
Support the training of farmers on doing farming as a business
Data should be periodically collected on fruits and vegetables sub sector
Support uptake of climate smart innovations, including irrigation and water
harvesting
Improve access to finance for farmers and other VC actor[s]
Improve the current export inspections and procedures to be aligned with
international standards.
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Recruit more inspectors and facilitate them to undertake inspections at the
production sites, pack houses and airports.
Regulate exporters of fruits and vegetables and put in place deterrent penalties
in cases of non-compliance by the exporters.
Improve infrastructure such as cold chain facilities, packing materials and pack
houses to increase product quality.
Support the established of well-equipped testing laboratories to do (random) test
on MRLs before products are shipped.
Improve the branding of produce from Uganda by improving packing materials
Encourage and provide incentives for private sector to invest [in] vegetables and
fruits.
Provide farmer friendly credit with flexible repayment terms to farmers of fruits
and vegetables. (Dijkxhoorn, Youri et al., 2019).
III-A-6. Interest by Ugandan exporters to invest in production and export of the
recommended FFVs
In the Wageningen Economic Research study the authors state “We estimate that there
are about 7-10 serious exporters supplying international market supplemented with
many opportunistic so called „brief case‟ exporters. The more serious exporters often
have [their] own production fields, have additional out growers, supply out growers with
technical support and assistance and have [their] own packing facilities. The „brief case‟
exporters often buy the produce on the open market or make informal agreements with
farmers without providing any support.” A panel of experts for the SPS Diagnostic
Mapping study conducted in April and May 2019 (key officials from the Ministry of
Agriculture, Ministry of Trade, Uganda Export Promotion Board, and representatives of
2 of the 4 exporter associations), while agreeing with the reality -- and problem -- of
“brief case exporters”, reviewed a list of 292 actual exporters compiled by the Uganda
Export Promotion Board and identified 31 they considered serious exporters. For this
study, the initial list of 72 FFVs was reduced after eliminating 34 from consideration
either because pest and disease risks are very high, and/or there was not an apparent
high demand for them in high value markets in the EU, Middle East or China. The
remaining list of 38 FFVs was sent to these 31 exporters with the request to indicate
which of the listed FFVs they might have interest in exporting in the future.
Of the 31 exporters contacted for this study, 16 (52%) of the replied; some indicated
which FFVs they were already exporting. The full results are shown in Table 2 and
Table 3 below (in Sections III-B and III-C respectively.) Of those FFVs already being
exported, avocado was the most popular with 75% of exporters replying indicating their
interest; following that were apple bananas 69%, pineapple 63%, okra 50%, garden
27
eggs 50%, “hot pepper” (Scotch Bonnet and Habanero) 50%, passion fruit 44%, chilies
(Birdseye) 40%, local varieties of Sweet Potatoes, White skin (Tanzania) and Red Skin
40%, snap beans 31%, peanuts (groundnuts) 20%. Of those “new” FFVs not yet being
exported, or being exported by only one or two exporters, jackfruit was the most popular
with 69%; following that were eggplant (aubergine) 56%, vanilla 50%, Sweet potatoes
(Beau-regard and Covington varieties) 50%, tamarind 50%, rosemary 38%, guava 38%,
baby corn 31%, cape gooseberry 31%, snow peas 31%, and tree tomato/tamarillo
(Cyphomandra betacea) 31%.
.
III-A-7. Status of both government and private sector policies, self-regulating mechanisms
and infrastructure to support the sector & recommendations
Kilimo Trust Uganda was subcontracted to conduct research for this market study in
order to “assess what fresh fruits and vegetables are being traded in Kenya and
Ethiopia that might have potential for Uganda, and what the policies, systems, selfregulating environment and infrastructure are in those countries that support the trade of
these FFVs.” UAA added information in these same categories for Uganda (see
Appendix A for a detailed matrix comparing these sectors of the enabling environment
for the three countries.) Based on this analysis, UAA and Kilimo Trust developed
recommendations on how a better enabling environment can be created in Uganda.
Public Sector: Based on their analysis of the experience of Kenya and Ethiopia, the
Kilimo Trust research suggested 5 ways the public sector can enable the successful
development of the FFV export value chain:
1. Developing “Political good will” (p 38 1), which includes
(a)” implementing liberal policies about local and foreign investment”. The Kilimo
research points out the example of the Ethiopian government, which in order to attract
investment into the horticulture sector has offered investors the following: a 30-year free
lease on land, free boreholes for irrigation as well as electricity connection from main
grids Investors in horticulture hubs have zero tax privilege on exports. Investors are
exempted from income tax for 8-10 years and from duties and other taxes on imports of
machinery, construction materials, spare parts, raw materials and vehicles.
However, it should be mentioned that in the case of Uganda, as the Wageningen
Economic Research study notes, the liberalization that took place in Uganda during the
1980s and 1990s “included new „business-friendly‟ laws (e.g. regarding investment and
profit expatriation),” and that “The level of FDI [Foreign Direct Investment] inflows as a
share of the GDP in Uganda is [at the present time] relatively high compared to
neighbouring countries,” In Uganda the FDI as a share of GDP is at 4.8%, compared to
28
0.9% for Kenya, 3.2% for Rwanda, and 2.2% Tanzania. As the study likewise notes,
land is available for investment purposes.
(b).” prioritization of the horticulture subsector” by means of developing horticulturerelated institutions, policies, and incentives:
i) “setting up institutions which target the horticulture sub sector including horticulturespecific regulatory institutions” (e.g. equivalent to the Horticultural Crops Directorate
within the agriculture ministry in Kenya, and to the Ethiopian Horticulture & Agriculture
Investment Authority, etc.) and
ii) “developing horticulture-specific policies for development of the horticulture
subsector”, such as
-- Kenya‟s National Horticulture Policy which has the purpose to facilitate
increased production of high-quality horticultural produce, enhance provision of
the sub-sector‟s support services like finances, insurance and technical advisory
service, promote value addition and increase domestic and external trade,
develop and improve infrastructure to support the horticultural industry
particularly in major production areas; and promote horticultural investment in the
Arid and Semi-Arid Lands
-- Ethiopia‟s National Horticulture Development and Marketing Strategy which
aims at employing new technologies to commercialize the horticulture sector and
maximize the export revenue as well as enhancing irrigation development,
strengthening mechanized commercial farming to enhance production and
productivity. (Kilimo Trust 2019)
iii) “developing incentives on making accessible affordable land, and offering tax rebates
[exemption] for producers” of export FFVs (p 39 2.c) (GoE has done this with a 30-year
free lease on land, free boreholes for irrigation as well as electricity connection from
main grids Investors in horticulture hubs have zero tax privilege on exports. They are
exempted from income tax for 8-10 years and from duties and other taxes on imports of
machinery, construction materials, spare parts, raw materials and vehicles)
2. Developing “strong mechanisms and institutions for enforcing quality and standards
(p 38, 5) leading to export market [value chains] which are “stringent and dynamic” (p
39, d). This can be done both in private and public sector; in the public sector it means
strengthening the institutions and their policies and activities, including enforcement
activities, in the Ministries of Agriculture and Trade.
3. Provide incentives to private sector to catalyze farmer organizations, including
-providing conducive infrastructure in rural areas where strategic FFVs are grown (p39
e.1.) This could include
- storage facilities, as Ethiopia has done by establishing Rural Transformation Centers,
intermediate infrastructures placed close to farming areas where farmers receive
29
agricultural inputs, deliver their produce so it can be sorted, stored, and sometimes
undergo primary processing before onward transport to an Integrated Agro Industrial
Parks
- cold chain infrastructure, as Kenya has done by constructing 8 cold storage facilities in
some selected major production areas
- irrigation schemes, as Ethiopia has done by harnessing technology to expand
irrigation to farmers who traditionally relied on rainfall; the result has been that the area
under irrigation increased by almost 52% between 2002 and 2014
- improvement on key roads important for marketing FFVs, as both Kenya and Ethiopia
have done on projects such as Lamu Port-South Sudan-Ethiopia Transport Corridor
(LAPSSET) that involves building of railway, electricity, roads and the Lamu Port.
4. “Providing [less] formidable and [less] bureaucratic regulatory framework for
registration of, and for contracting for, farmer based institutions.”
5. Investment in agricultural research and extension of horticulture and FFVs, including
new crops and varieties; disease control; cost-efficient post-harvest handling; reducing/
eliminating pesticide residues; and preventing the spread of horticulture pests.”
Public Private Partnerships: The Kilimo Trust research suggested 3 areas of
development of Public Private Partnerships (PPP) to enable the successful
development of the FFV export value chain: for Product and Market diversification, for
funding of research and extension (p 39 f.1.iv)
3. PPPs for Investment in development of the FFV export value chain (p39 c.2.a)
Private sector: Based on an analysis of the experience of Kenya and Ethiopia, the
Kilimo Trust research suggested 2 main ways the private sector in Uganda can enable
the successful development of the FFV export value chain:
1. Organize “the respective industries (p 38, 3) in the form of strong private [sector]
bodies that address sector-wide externalities and coordination problems” (p 39, f.1) and
“which will develop strong mechanisms and institutions for enforcing quality and
standards (p 38, 5) leading to export market [value chains] which are “stringent and
dynamic” (p 39, d). This will include
(a) development of a domesticated stringent quality system such as GlobalGAP
(b) facilitating the exchange of market information
(c) It will also include development of common code of practice such as Kenya
Horticulture Standard KS1758 part II: FRUITS & VEGETABLES “which acts as a Code
of Conduct for the horticulture industry developed by Kenya Bureau of Standards in
collaboration with the Kenya Horticultural Council. It streamlines the industry in terms of
30
food safety standards, introduces efficiency in the production systems and ensures
traceability of horticultural produce.”
2. Exporters should “find modalities to support value chain functions to allow
smallholder farmers to supply quality which is acceptable in export markets (p 39, e)
through contract farming and formal and informal relationships with marketing
cooperatives and farmer associations.”
III-B Currently Exported Fresh Fruits and Vegetables with
Promise for Export
Of all the FFVs currently being exported, the strongest interest by the private sector
(exporters) was for Avocados, Apple Bananas, Pineapple, Okra, Garden Eggs
(Solanum aethiopicum), Hot pepper (Mostly Habanero, sometimes Scotch Bonnet),
Passion Fruit, Chilies (capsicum), Sweet Potatoes (east African varieties), and Peanuts
(groundnuts.). Table 2 below lists these FFVs in order of interest by exporters, and
details ability and constraints to meeting criteria for each.
31
TABLE 2: EVALUATING POTENTIAL FFVs CURRENTLY EXPORTED
Fresh Fruit
or
Vegetable
Manageability of SPS standards/
requirements (pests&diseases)
Ability to meet other
market requirements
(variety, etc.)
Ability to
produce
at scale
desired by
market
Ability to
produce at
consistency
desired by
market
Existence of
supporting
value
chain/other
infrastructure
Competitiveness
in price,
delivery
Interest by
private
sector
(percentage
of exporters
interested)
Avocado
Moderately manageable:
diseases include fungal (anthracnose,
colletrotrichum, leaf rust, root rot, scab,
cercospora leaf spot); pests include fruit flies,
white flies, thrips, scale, False Coddling Moth,
systates weevils, coconut bugs, stink bugs,
spider mites, cacao-mosquito (Helopeltis
schoutedeni) (Bakirya, 2016)
Not difficult for exporters to sell to
ethnic/ specialty market for
Jumbo:, though usually no
distinction made among hundreds
of Jumbo varieties.
Moderately
difficult for
ethnic/
specialty
market for
Jumbo: given
few medium
to large
orchards
Moderately
difficult for
ethnic/
specialty
market for
Jumbo: given
lack of
attention to
production
practices
No developed
value chain
infrastructure
besides one or
two outgrower
networks and a
loosely
organized
national
platform.
Hence
exporters buy
from brokers
who
accumulate
fruit from many
smallholder
farmers.
Ethnic/
specialty
market for
Jumbo: not
difficult
75%
In the conventional market, the EU
import value of avocados almost
tripled in the period between 2013
and 2017 (CBI, “Avocado”, 2018).
This upward trend is driven by
consumer demand for ready-to-eat
and health food. It creates
opportunities for producers and
exporters, especially for the Hass
avocado variety. (Dijkxhoorn, Youri
et al., 2019 ) But it is very difficult
for Ugandan exporters to serve
commodity market for Haas,
Fuerte and other commercial
varieties: Though there has been
some planting recently of
commercially traded varieties, they
are not yet producing fruit and the
quantities planted are not large
compared to the requirements of
the conventional market, unless
used to top up production in
neighboring Kenya. To reach
conventional markets directly
would require planting on a larger
32
Very difficult
for
commodity
market for
Haas, Fuerte
and other
commercial
varieties,
requiring
large
acreage,
large
investment
in planting
commerciall
y traded
varieties
Very difficult
for
commodity
market for
Haas, Fuerte
and other
commercial
varieties
because
requires large
investment in
irrigation for
orchards to
stagger
production
Commodity
market for
commercial
varieties:
difficult,
given high
competition
from Kenyan
production
which is well
organized
and has
lower
shipping
costs
Apple
bananas
Moderately manageable.
The major diseases limiting banana
productivity are: Panama disease (Fusarium
wilt), black Sigatoka, leaf speckle, banana
bunchy top virus and banana streak virus
diseases. Other diseases include Yellow
Sigatoka; Matooke wilt. Minor diseases
include bacterial pseudostem rot and
bacterial corm rot .Fungal diseases include
cordan leaf spot, canana leaf freckle,
deightoniella leaf spot, banana rust, fruit
freckle, cigar end rot diseases, crown rot ,
anthracnose. Viral diseases include banana
mosaic (cucumber mosaic cucumovirus)
(Tushemereirwe and Bagabe, 1999.)
Pineapple
Easily Manageable. Pineapples rarely suffer
from pests when good growth conditions are
prevalent. The following diseases and pests
occur especially in systems which lack
diversification.: pineapple wilt virus, Mealy
bugs, Pineapple top and root rot, Root-knot
nematodes, Thrips, White leaf spot, Yellow
spot virus (Infonet Biovision, “Pineapple”)
scale and waiting 4 years to
produce
Not difficult. The study done for
ISSD by Wageningen Economic
Research found that “Apple
bananas can be grown in most
districts of the country and there is
potential for increased production
through establishment of
specialised farmers to produce the
crop. Apple bananas have a high
local demand and command a
good price in the European market
to be air freighted” (Wageningen
Economic Research, 2019)
Difficult. The MD2 variety has now
replaced Smooth Cayenne
pineapples as the preferred variety
in every major market. Over 80%
of all European imports are MD2.
(CBI, “Pineapple” 2018). Uganda
produces Smooth Cayenne variety,
which has some small demand for
catering and specialist markets;
but it, does not ship well and
normally grows bigger than what is
required on the (EU) export
market. (Dijkxhoorn, Youri et al.,
2019). Substantial planting of MD2
would be required to meet EU
major markets.
33
Not difficult
Not difficult
Loosely
organized value
chain, mostly
around
varieties other
than apple
bananas
Moderately
difficult;
though
production
costs are
lower than
competition,
delivery
costs are
higher given
heaviness of
the fresh
product, and
the landlocked status
of Uganda
69%
Not difficult
if substantial
replanting is
done.
Not difficult if
substantial
replanting is
done.
Loosely
organized value
chain. Most
sold to brokers
who collect the
fruits from the
garden.
Majority is
produced for
the local
market by
smallholder
famers; a small
share is
exported,
mainly to
Kenya, some
Middle East
and EU.
Processing
sometimes
done by
exporters in
form of dried
fruit slices.
(Dijkxhoorn,
Youri et al.,
2019 )
Moderately
difficult;
though
production
costs are
lower than
competition,
delivery
costs are
higher given
heaviness of
the fresh
product, and
the landlocked status
of Uganda
63%
Okra
Easily manageable
Generally resistant to pests and disease, but
large scale production can encourage crickets,
flea beetles, cotton bollworm and
powdery mildew. (ECHO, 2019)
Not difficult, but not conventional
market. “In the European market,
okra is considered an ethnic
vegetable and is consumed mostly
by African, Asian, and Caribbean
communities. Okra is shipped to
the EU by air.” (CBI, “Okra”)
Not difficult
Garden
eggs
(Solanum
aethiopicum/gilo)
Moderately manageable.
susceptible to fewer diseases than eggplant:
wilt , collar rot , root-knot nematodes, chilli
veinal mosaic virus (ChiVMV) spread by the
green peach aphid (Myzus persicae); Spider
mites; grasshoppers, fruit and flower borers,
leaf hoppers and caterpillars (Selepa docilis)
(PlantUse, 2015)
Difficult to manage. In Uganda the most
difficult pest to manage has been False
Coddling Moth; pests can also include aphids,
armyworms, flea beetles, leaf miners, leaf
rollers, pepper beetles, pepper weevils, thrips,
tomato fruit worms, spider mites. Most
common diseases are: anthracnose, leaf spot,
wilt, mosaic virus, phytophthora blight
(Nsabiyera, et al 2012)
Not difficult, but not conventional
market. A 2007 study in Ghana
found that “The main market is the
European Union, largely the United
Kingdom. Users of garden egg in
these countries tend to be
consumers of African origin,
African restaurants and
expatriates.” (Horna et al, 2007)
Not difficult
“Hot
pepper”
(Scotch
Bonnet,
Habanero,
Capsicum
chinense)
34
No developed
value chain
infrastructure
Not difficult.
Production
costs low,
lightweight
for shipping.
50%
Not difficult
Moderately
difficult: “Due
to the
perishable
nature of
okra,
harvesting
must take
place on the
day of, or on
the day
preceding
shipment.”
(CBI, “Okra”)
Not difficult
No developed
value chain
infrastructure
Not difficult.
Production
costs low,
lightweight
for shipping.
50%
Not difficult
Not difficult
Consolidated
by buying
agents and
transported to
urban markets.
Most is directly
sold to
exporters
targeting EU
Exporters sort
peppers and
prepare for
export. A small
percentage sold
to
supermarkets,
and for
processing into
chili sauce,
powder for
domestic
markets.
Not difficult.
Production
costs low,
lightweight
for shipping.
50%
Passion
fruit
Chillis
(Mostly
African
Bird’s Eye
Chili,
Capsicum
frutescens)
Moderately manageable.
Diseases include: brown spot disease,
woodiness disease, fusarium wilt. Pests
include: Mealy bugs, passion vine mite, fruit
flies, aphids, The control of pests, which
attack the passion fruit, involves two basic
problems, (1) The destruction of insects which
attack the plants.
(2) The preservation of the insects whose
function in pollination is of vital importance to
fruit plant.
The problem is complicated because both
beneficial and destructive insects are so
closely associated with the plant. The
injurious insects must therefore be eliminated
without destroying the beneficial ones. An
approach to this problem is the proper timing
of spray applications (Oxfarm Organic)
Difficult to manage. In Uganda the most
difficult pest to manage has been False
Coddling Moth; pests can also include aphids,
armyworms, flea beetles, leaf miners, leaf
rollers, pepper beetles, pepper weevils, thrips,
tomato fruit worms, spider mites. Most
common diseases are: anthracnose, leaf spot,
wilt, mosaic virus, phytophthora blight (V.
Nsabiyera, M. Ochwo-Ssemakula And P.
Sseruwagi 2012)
Not difficult.
The high levels of vitamin A and C
make passion fruit a healthy fruit,
leading to growing demand
in Europe. The main importing
markets of exotic fruit from nonEuropean countries are France,
Belgium and Netherlands.
According to trade data estimates,
Germany and France remain the
principal final destination
markets ….. The United Kingdom
follows as third largest final
destination market. (CBI, “Exotic”)
Not difficult
Not difficult
Not difficult
Not difficult
Not difficult
35
(Dijkxhoorn,
Youri et al.,
2019 )
No developed
value chain
infrastructure
Consolidated
by buying
agents and
transported to
urban markets.
Most is directly
sold to
exporters
targeting EU
Exporters sort
peppers and
prepare for
export. A small
percentage sold
to
supermarkets,
and for
processing into
chilli sauce,
powder for
domestic
markets.
(Dijkxhoorn,
Not difficult.
Production
costs low,
lightweight
for shipping.
44%
Not difficult.
Production
costs low,
lightweight
for shipping.
40%
Youri et al.,
2019 )
Loosely
organized value
chain, mostly
around
varieties other
than apple
bananas
Sweet
Potatoes,
White skin
(Tanzania)
and Red
Skin (?)
Moderately manageable:
Pests and diseases include aphids, Beet
armyworm, Black rot, Diplodia black storage
rot, Domestic and wild animals, Eriophyd
mites, Fusarium wilt, Mild mottle
virus, Millipedes, Rats, Root-knot
nematodes, Sweet potato butterfly, Sweet
potato hornworm or hawk moth, Sweet
potato moth, Sweet potato virus
complex, Sweet potato
weevil, Termites, Tortoiseshell
beetles, Whiteflies (Anderson, date?)
Not difficult, but smaller ethnic
market, not conventional market
Not difficult
Not difficult
Snap beans
Difficult. DISEASES: Common blight,
Fusarium root rot; Rust); Anthracnose; bean
common mosaic virus; Angular leaf spot ; Halo
blight; Powdery mildew; Root-knot
nematodes. PESTS: African bollworm ,
Aphids, Bean flies, Bean rust, Bean seed flies,
Bugs , Cutworms, Flower or blister beetles,
Flower thrips, Foliage beetles, Leafhoppers,
Leaf mining flies (leaf miners), Spider mites,
Storage pests, Stripped bean weevil,
Whiteflies. (Infonet Biovision, “Beans”)
Not difficult
Not difficult
No developed
value chain
infrastructure
Peanuts
(Groundnuts)
Not difficult. Diseases: Aspergillus crown
rot, Bacterial wilt, Damping-off
diseases, Groundnut blight, Groundnut
hopper, Groundnut rosette disease,
Pests: Aphids, Leaf spots, Leafmining
caterpillars, Milipedes, Root-knot
nematodes, Rust, Spider mites, Storage
pests, Termites, Thrips, White grubs (Infonet
Biovision, “Groundnut”)
Moderately difficult.
Bobby beans (also known as green
beans, string beans, snap beans)
and fine beans are two varieties of
Phaseolus vulgaris. Fine beans
(Haricots verts, French for "green
beans") are a variety of green
beans which are longer, thinner,
crisper, and more tender than
regular green beans. (CBI,
“Beans”2019)
Not difficult, though the variety
predominantly grown in Uganda
(Valencia – Red Beauty) is not
among the main varieties sought in
the EU, which are Runner, Spanish,
Hsuji and Virginia (large kernel
type typically found in gourmet
snacks). (CBI, “Groundnuts”, 2018)
Not difficult
Not difficult
No developed
value chain
infrastructure
36
Moderately
difficult;
production
costs lower
than
competition,
but delivery
costs higher
given weight
of fresh
product, and
land-locked
status of
Uganda
Not difficult.
Production
costs low,
lightweight
for shipping.
40%
Not difficult.
Production
costs low,
lightweight
for shipping.
20%
31%
As stated above, almost all of Uganda‟s current exports of FFVs to Europe go to ethnic
markets in Europe. As the study done by Wageningen Economic Research states,
“The ethnic market in Europe is informal and certification is not required. Many of
the importers are relatively small. They supply ethnic wholesale traders and
grocery shops with an assortment for the ethnic communities…. The
conventional market demands high-quality and „safe sourcing‟. The main
difference between the two markets is the final consumer. Supermarket
customers expect transparent information about the sourcing and a high-quality
product. To cater for these needs, supermarkets require suppliers‟ adherence to
stringent global standards that include certification of social and environmental
standards and/or Global GAP The latter is the private sector standard most used
by European retailers. Although attaining Global GAP is not a legal requirement
nowadays, it is widely regarded as the minimum standard for exporters to be able
to supply to the main supermarket retailers in Europe. Besides Global GAP,
many supermarkets demand compliance to specific certification. Nevertheless, if
an exporter can achieve Global GAP, then supermarket-specific standards are
often not a problem. One of the key facets of private sector standards is the
ability to trace the history of a product throughout the supply chain from field to
the consumer.” (Dijkxhoorn, Youri et al., 2019).
In other words, if Ugandan exporters want to expand exports of currently exported FFVs
into conventional markets, they will have to meet stricter criteria including meeting
Global GAP standards, and producing larger volumes (since the ethnic markets
currently served are smaller and regularly take smaller volumes.)
III-C Fresh Fruits and Vegetables with Promise not
Currently Exported
Suggestions for “new” FFVs for export were suggested by PMC members, by exporters
and others in Uganda with expertise in export, by the research from Kilimo Trust of FFV
exports from Kenya and Ethiopia, and by desk research by UAA of FFVs with promising
high value markets in the EU, Middle East, and China. According to self-reporting by
Ugandan exporters, the FFVs in the following list are not currently being exported by
more than one exporter. When exporters were surveyed about their interest in the
“new” FFVs in the following list, the strongest interest was expressed for jackfruit,
eggplant (aubergine), vanilla, sweet potatoes (Beauregard, Covington varieties),
tamarind, rosemary, guava, baby corn, Cape gooseberry, snow peas, tree tomato.
Table 3 below lists these FFVs in order of interest by exporters, and details ability and
constraints to meeting criteria for each.
37
TABLE 3: EVALUATING “NEW” FFVs NOT YET EXPORTED, OR EXPORTED IN SMALL VOLUME
(of the following FFVs, either only one or none of the exporters surveyed is exporting)
Fresh Fruit
or
Vegetable
Manageability of SPS standards/
requirements (pests&diseases)
Ability to meet other
market requirements
(variety, etc.)
Ability to
produce at
scale desired
by market
Ability to
produce at
consistency
desired by
market
Existence of
suppor-ting
value
chain/other
infrastructure
Competitiveness
in price,
delivery
Interest by
private
sector
(percentage
of exporters
interested)
Jackfruit
Moderately manageable:
Insects belonging to the Aphididae,
Ateyrodidae, Cercophidae, Coccidae and
Fulgoridae families feed on the sap. Other
Insect pests affecting the tree include
Anomala spp., Batocera rubus, Dacus
umbrosus, Daphania caesalis, Ferrisisa
virgata, Leucopholis irrorata, Melicodes spp.,
Melicodes tenebrosa, Nasutitermes
luzonicus, Nipaecoccus filamentosus,
Phytorus lineolatus, Planococcus lilacinus,
Pulvinaria psidii and Thosea sinensis. Several
fungi attack different parts of the tree.
Organisms that cause disease include
Cercospora artocapi, Chanephora
cucurbitarum, Fusarium spp., Nectria
cinnabarina, Pellicularia salmonicolor,
Phomopsis artocapina and Rhizophus
nigricans. The white fly is a minor pest.
(Orwa, 2009)
Moderately Manageable:
Diseases and Pests are mainly Anthracnose,
Aphids, Bacterial wilt, Budworm, Cotton
leafhoppers or jassids, Cutworms, Early
blight, Eggplant lace bug, Epilachna beetles,
Fusarium wilt, Late blight, Mole crickets,
Phytophthora fruit rot, Powdery mildew,
Root-knot nematodes, Shoot and fruit borer,
Spider mites, Thrips, Whiteflies (Infonet
Biovision “Eggplant”)
Not difficult, however fresh
jackfruits are only found in
Europe in very small quantities
in specialized or ethnic retail (CBI,
“Exotic”)
Moderately
difficult for
ethnic/ specialty
market ,given no
medium to large
orchards
Unknown
No developed
value chain
infrastructure
Not difficult
for ethnic/
specialty
market
69%
Not difficult. The slender Ravaya
is the preferred export variety.
The EU and UK account for 50.6%
of all eggplant imported. (Tridge,
2019)
Not difficult
Not difficult
No developed
value chain
infrastructure
Unknown
56%
Eggplant
(aubergine)
38
Vanilla
Vanilla plants are, in general, free from any
major pests and disease incidence. Among
insect pests, beetles, ash gray weevil,
caterpillar, earwigs, snails, slugs.
The major fungal diseases reported
in vanilla are root rot, stem rot, stem blight,
fruit rot, shedding of beans and shoot tip
rot. Pathogenic fungi like Phytophthora,
Fusarium and Sclerotium mainly cause
these diseases. (Kerala, 2019)
Not difficult. There is a big
opportunity on the European
market for suppliers from all
countries of
origin who can deliver highquality vanilla. Structural
problems in the world’s leading
supplier, Madagascar, has
created a vast shortage of supply,
providing room for
others. A special opportunity
exists for suppliers who apply
sustainable practices or
who hold organic or Fairtrade
certification. (CBI, “Vanilla” 2018)
Not difficult
Not difficult
No developed
value chain
infrastructure
besides
several
outgrower
networks
Not difficult.
Production
costs low,
lightweight
for shipping.
50%
Sweet
potatoes
(Beauregard,
Covington)
Moderately manageable:
Pests and diseases include aphids, Beet
armyworm, Black rot, Diplodia black storage
rot, Domestic and wild animals, Eriophyd
mites, Fusarium wilt, Mild mottle
virus, Millipedes, Rats, Root-knot
nematodes, Sweet potato butterfly, Sweet
potato hornworm or hawk moth, Sweet
potato moth, Sweet potato virus
complex, Sweet potato
weevil, Termites, Tortoiseshell
beetles, Whiteflies (Anderson, date?)
Beauregard especially susceptible to white
grub, soil pox. Covington susceptible to
fusarium, root knot nematodes. (Anderson,
date?)
Moderately difficult. Varieties
desired by EU market are
different than varieties grown so
substantial planting of desired
varieties needed. (CBI, “Sweet
Potatoes” 2018)
Not difficult if
substantial
replanting is
done.
Not difficult if
substantial
replanting is
done.
No developed
value chain
infrastructure
50%
Tamarind
Easily manageable
Seldom affected by pests and diseases. Most
serious pests of the tamarind are scale
insects, mealy-bugs, and seed beetles. are
attacked by the bruchid beetle. Rarely
diseases include leaf spot, powdery mildews,
a sooty mould, stem disease, stem, root and
wood rot, stem canker, a bark parasite and a
bacterial leaf-spot. (Infonet Biovision,
“Tamarind” 2019)
Not difficult, however fresh
tamarinds are only found in
Europe in very small quantities
in specialised or ethnic retail.
(CBI, “Exotic” 2019)
Not difficult
Not difficult
No developed
value chain
infrastructure
Moderately
difficult;
though
production
costs are
likely to be
lower than
competition,
delivery
costs are
higher given
heaviness of
the fresh
product, and
the landlocked status
of Uganda
Not difficult.
Production
costs low,
lightweight
for shipping.
39
50%
Rosemary
Moderately manageable: Pests: Rosemary
beetle (Chrysolina americana), Root rot
nematode (Meloidogyne spp.), leafhopper
Eupteryx decemnotata, spider mites,
mealybugs, whiteflies and thrips. Diseases:
web blight caused by Rhizoctonia solani and
Sclerotinia sclerotiorum; powdery mildew,
root rot (Directorate, “Rosemary” 2012)
Guava
Moderately manageable:
Diseases: wilt following infection by various
soil fungi, and root rot caused by
Phytophthora spp; also anthracnose
(Glomerella cingulata), Blossom-end rot; G.
cingulata or Botryodiplodia theobromae;
Fruit canker; Pests: fruit flies, scales,
mealy bugs, thrips, Leaf-eating caterpillars
and beetles (Rojas-Sandoval et al, 2019)
Baby corn
(maize)
Moderately manageable. The pests and
diseases of maize are well known to farmers
and exporters in Uganda. However, some
pests and diseases may be avoided because
for baby corn, the maize is harvested at an
early stage. “Baby corn is the immature ears
of fully grown standard cultivars of either
sweet corn or field corn.
Cape
gooseberry
Moderately manageable. Pests:
cutworms, Agrotis spp., Red spider mite,
potato tuber moth
Diseases: powdery mildew; soft brown scale;
root rots and viruses; tomato spotted wilt
virus; (Parker, 2019)
Not difficult
Western Europe is a stable and
growing market for fresh herbs
with relatively stable prices.
Eastern Europe is a more volatile
market, but suitable as a spot
market and less demanding in
terms of packaging standards.
The Mediterranean kitchen,
including Spain and Italy, uses
much oregano, parsley, basil and
rosemary.(CBI, “Herbs” 2019)
Not difficult, but very small
market. “Guava is still rather
unknown in Europe. Its main
consumers are mostly people
from countries in Central and
South America...specifically in
Paris." Spanish producer is
sending one pallet per week to 2
cities in Spain (Fresh Plaza,
“Guava” 2017) Seasonal, niche
market in Finland exists
(Finnpartnership, 2018)
Not difficult. “There is no
difference in taste when
comparing the sweet baby corn
and field baby corn varieties, as
the ears are harvested before the
sugars have had an opportunity
to accumulate. Small kernel size,
straight row kernel alignment and
tapered tips are typical
characteristics of high-quality
baby corn. Baby corn, which is
available in white and yellow
varieties, often has an ear size of
9 to 10 cm long and is
approximately 1.5 cm wide. (CBI,
“Baby vegetables” 2016)
Not difficult.
Netherlands and Germany made
purchases of this fruit for more
than 11 million dollars between
January and May of 2018. The
United States acquired just over
40
Not difficult
Not difficult
No developed
value chain
infrastructure
Not difficult.
Production
costs low,
lightweight
for shipping.
38%
Moderately
difficult for
ethnic/ specialty
market ,given no
medium to large
orchards
presently exist in
Uganda
Moderately
difficult,
because
requires large
investment in
irrigation for
orchards to
stagger
production
No developed
value chain
infrastructure
Unknown
38%
Not difficult
Not difficult
No developed
value chain
infrastructure
Not difficult.
Production
costs low,
lightweight
for shipping.
31%
Not difficult
Not difficult
No developed
value chain
infrastructure
Not difficult.
Production
costs low,
lightweight
for shipping.
31%
Snow peas
Pests & Diseases: African bollworm , Aphids,
Ascochyta blight, Cutworms, Downy mildew,
Fusarium wilt, Leafmining flies (leafminers),
Pea blue butterfly, Powdery mildew, Rootknot nematodes, Spider mites, Storage
pests, Thrips, Virus diseases (Infonet
Biovision, “Peas “,2019)
Tree
tomato
(tamarillo)
(Cyphomandra
betacea)
Moderately difficult:
tree tomato worm, the larva of the pyraustid
moth Neoleucinodes elegantalis. Aphids
transmit cucumber mosaic virus and potato
virus ‘Y’. Phytophthora blights (P. palmivora
and P. infestans); anthracnose, powdery
mildew ; verticillium wilt (Orwa,
“Cyphomandra betacea” 2019)
1.4 million dollars and Canada
almost 700,000 dollars. (Fresh
Plaza, “Columbia” 2019) Other
markets are UK and Belgium
(Fresh Plaza, “Netherlands “2019)
Difficult, highly competitive:
Europe imported around 30
thousand tonnes of fresh peas in
2017, which were
mainly sugar snaps and snow
peas (mangetout) from
developing countries. The
market for sugar snaps and snow
peas is competitive and much
more focused on
quality than the common peas
and beans, especially in the retail
channel. Buyer
requirements are becoming
stricter each year, especially with
regard to pesticide residues and
other contaminants. For these
specific peas, especially sugar
snaps, opportunities for
developing countries can be
found all year round. (CBI,
“Beans, Peas”, 2019 )
One Ugandan exporter reports
his impression that there is good
demand in EU markets, based on
visits to trade fairs, supermarkets
and food stores in Europe, and
trade information reports from
CBI and fruit plaza. Another
Ugandan export expert reports
her assessment that there is good
potential to EU, United Arab
Emirates-Dubai, China, and South
Africa
41
Not difficult
Not difficult
No developed
value chain
infrastructure
Not difficult.
Production
costs low,
lightweight
for shipping.
31%
Not difficult
Not difficult
No developed
value chain
infrastructure
Not difficult.
Production
costs low,
lightweight
for shipping.
31%
Just as for currently exported FFVs (see III-B above), for these new FFVs as well , if
Ugandan exporters decide to export to conventional markets rather than less
demanding ethnic markets in the EU, they will have to meet stricter criteria including
meeting Global GAP standards, and producing larger volumes. Of the FFVs listed
above which have promise for export but are not currently exported, 3 would find their
main market in the EU ethnic market, not the conventional market (jackfruit, tamarind,
guava); for 5 the market would be the conventional, not the ethnic market (aubergine,
snow peas, rosemary, baby corn, and the Beauregard and Covington varieties of sweet
potatoes); and for three it might be possible for exporters to begin by serving the smaller
(and easier to serve) ethnic market but eventually switch to the conventional market
(vanilla, tree tomato, cape gooseberry.)
PART IV. CONCLUSIONS AND RECOMMENDATIONS
IV-A Conclusions
Conclusion 1. The markets which Ugandan exporters of FFVs are currently supplying in
the EU, are mainly the ethnic markets in the EU. These ethnic markets are limited in
size, though they have less stringent requirements (i.e. meeting basic SPS standards is
required of course, but meeting GlobalGAP standards is not.) However, if Ugandan
exporters want to reach beyond these limited markets to larger conventional or high
value specialty markets, there must be increases beyond current practice in Uganda
both in scale of production and in quality of produce, to meet the GlobalGAP level
requirements which have become a de facto requirement for high value markets
internationally. As a recent market study of FFVs in Uganda found, farmers in Uganda
“must improve overall agronomic practices, including sustainable pest control, water
use, and efficient pre- and post-harvest practices…this requires training, as well as
investments in advancing Uganda‟s currently low-cost low-output vegetables and fruits
sector.” (Dijkxhoorn et al, 2019.)
Conclusion 2. There are many opportunities for Uganda to increase exports of FFVs
which have manageable pest and diseases and demand in high value markets. Some of
these opportunities are for FFVs currently being exported on a smaller scale from
Uganda but which could be scaled up, for example: apple bananas, cayenne
pineapples, okra, garden eggs, hot peppers and chillies, passion fruit, snap beans,
groundnuts, jackfruit, eggplant, vanilla, tamarind, guava, baby maize, snow peas, tree
tomatoes. Some of the opportunities are for export of “new” varieties of FFVs which are
42
already being produced in Uganda, for example Hass and Fuerte avocado, Spanish
Beauregard and American Covington sweet potatoes, MD2 pineapples. And some of
these opportunities are for export of FFVs which are produced in Uganda but not mainly
as export crops (rosemary, cape gooseberry, tree tomatoes.)
Conclusion 3. Some of the opportunities for FFV export are for supplying niche markets
which are smaller and therefore on a more manageable scale, though high quality is still
important for these markets. And some FFVs can be produced initially for these niche
markets (including but not limited to ethnic markets), but if production capacity in
Uganda can be built up over time, may offer the possibility of transition to larger
conventional markets (e.g. vanilla, rosemary, okra, possibly tree tomatoes).
Conclusion 4. In addition to the international market for exports, “the regional market is
providing opportunities. The demand for fruit and vegetable has increased in the last
decade and is likely to increase.” ((Dijkxhoorn et al, 2019.) Some of the potential
regional market may be due to the need that FFV-exporting neighbors like Kenya and
Ethiopia may have to top up national production, as UAA has heard anecdotally from
the avocado sector in Uganda.
Conclusion 5. As mentioned in Conclusion #1 above, increasing scale in production is
key reaching more high value markets with the required greater volumes. One important
way to increase scale is to organize smallholder producers in an ongoing network to
produce for export markets. In Kenya, 80% of all fresh produce exports are produced by
smallholder farmers, and the experience and example of the arrangements worked out
between Kenyan FFV exporters and Kenyan small holder farmers offers very important
lessons which can benefit Ugandan FFV exporters and smallholder farmers.
Conclusion 6. While some parts of an enabling environment provided by the public
sector for FFV exports are present or under development in Uganda (for example the
new National SPS Policy, the new National Extension Policy and Strategy, the
increased hiring of extension workers, the Agriculture Credit Facility, tax incentives for
imports of agricultural equipment and inputs, planned agro-industrial parks, almost
completed new hydroelectric power projects), an examination of Ethiopia and Kenya
suggest that other very important parts are missing in Uganda. This includes “a specific
national horticulture policy/strategy…a government institution set up to drive
development of the industry.... [and] incentives to catalyze the growth of the horticulture
industry.” (Kilimo Trust, 2019.) Similarly, another recent market study of FFV in Uganda
noted the lack of “regulations regarding the quality of inputs, [and] phytosanitary
protocols during production and transport” and found that “the government of Uganda
has failed to support the sector in a conducive way. The actors in the sector feel
43
neglected. Supportive policies and policy implementation is missing and there is only
limited data available on the horticulture sector.” (Dijkxhoorn et al, 2019.) In Ethiopia,
the incentives include tax holidays, access to land and finance for investment, and
“public infrastructure in government selected horticulture hubs.” (Kilimo Trust, 2019.) In
addition, the “governments of Ethiopia and Kenya have invested heavily in infrastructure
development meant to drive growth of agricultural value chains and the horticulture subsectors have been directly targeted… these [infrastructure investments] are such as
rural roads and electricity connectivity, airports, cold chain facilities in horticulture hubs
(in the case of Ethiopia) and at airports such as communication infrastructure.” (Kilimo
Trust, 2019.) Of course, both nations have national airlines which fly to areas which are
markets for the FFVs produced in those nations.
Conclusion 7. Uganda‟s exporter associations are not yet strong enough, as they are in
Kenya and Ethiopia, to provide members with the amount of guidance needed on
supplying high-value export markets with their stringent requirements. As a recent
market study points out, “the Uganda export sector has a poor image in the EU market
and supplying the conventional EU retail market is not feasible due to a lack of tracking
and tracing, certification, volumes and a lack of seriousness of many exporters.
Additional challenges include… limited market understanding – specifically on buyer
requirements in exports markets.”
IV-B Recommendations
Recommendation 1. In considering exporting any of the “promising” FFVs listed in
Table 2 and Table 3 above, or considering any FFV, an export business should first
identify which market they intend to supply: whether that market is the more volumelimited but less stringent ethnic market in the EU, a volume-limited but more stringent
specialty food market of another kind (e.g. organic, etc.), or the much larger and more
stringent conventional market of the EU, Middle East, or another high value destination.
The implications of this decision, which the exporter needs to understand clearly, are
whether the market is so limited that it has little room for the export business to grow; or
so stringent that the export business will have to make a substantial investment of
resources (and time) to develop production and handling able to meet the larger volume
and more consistent supply demanded while at the same time also meeting more
stringent standards like GlobalGAP.
Recommendation 2. If an export business in Uganda hopes to scale up their export
volume, they need to evaluate the pathway they will use to scale up, and understand
that this varies greatly with the FFV. To scale up the production of tree fruits in Uganda
44
for export, they will almost certainly need to have a strategy of aggregating the
production of many smallholder farmers, rather than acquiring themselves the massive
acreage needed to plant enough trees which then produce the requisite volume of tree
fruit. On the other hand, the production of herbs and small vegetables may not need a
large -- or even any -- smallholder outgrower network, since a medium to large acreage
may be sufficient for sustained production of the volume needed. FFVs other than tree
fruits and herbs/small vegetables will fall into a category in between these two, so that
some form of smallholder farmer aggregation is likely to be needed (as it is in Kenya, for
example) to meet export market demand. The exporter should bear in mind that the
larger the number of smallholder farmers who are involved, the larger the number of
different sources of production that must meet quality standards; thus the more effort
and expense needed to maintain quality control to meet export standards.
Recommendation 3. Based on an analysis of the experience of Kenya and Ethiopia by
the Kilimo Trust research, the public sector in Uganda needs to develop “political good
will”, which includes “implementing liberal policies about local and foreign investment”.
The Ethiopian government, in order to attract investment into the horticulture sector has
offered investors the following: a 30-year free lease on land, free boreholes for irrigation
as well as electricity connection from main grids Investors in horticulture hubs have zero
tax privilege on exports. Investors are exempted from income tax for 8-10 years and
from duties and other taxes on imports of machinery, construction materials, spare
parts, raw materials and vehicles. (Kilimo Trust, 2019.) However, it should be
mentioned that in the case of Uganda, as the Wageningen study notes, the liberalization
that took place in Uganda during the 1980s and 1990s “included new „business-friendly‟
laws (e.g. regarding investment and profit expatriation),” and that “The level of FDI
[Foreign Direct Investment] inflows as a share of the GDP in Uganda is [at the present
time] relatively high compared to neighbouring countries.” (Dijkxhoorn et al, 2019.) In
Uganda the FDI as a share of GDP is at 4.8%, compared to 0.9% for Kenya, 3.2% for
Rwanda, and 2.2% Tanzania.
Developing “political good will‟ also includes “prioritization of the horticulture subsector”
by means of developing horticulture-related institutions, policies, and incentives. This
includes an institutional prioritization, that is “setting up institutions which target the
horticulture sub sector including horticulture-specific regulatory institutions” {e.g.
equivalent to the Horticultural Crops Directorate within the agriculture ministry in Kenya,
and to the Ethiopian Horticulture & Agriculture Investment Authority, etc.} and publicprivate partnership in Kenya in establishment of a Practical Training Centre to impact
special skills to actors along horticultural value chains. It also includes a policy
prioritization that is, “developing horticulture-specific policies for development of the
horticulture subsector”, such as
-- Kenya‟s National Horticulture Policy which has the purpose to facilitate
increased production of high-quality horticultural produce, enhance provision of
45
the sub-sector‟s support services like finances, insurance and technical advisory
service, promote value addition and increase domestic and external trade,
develop and improve infrastructure to support the horticultural industry
particularly in major production areas; and promote horticultural investment in the
Arid and Semi-Arid Lands
-- Ethiopia‟s National Horticulture Development and Marketing Strategy which
aims at employing new technologies to commercialize the horticulture sector and
maximize the export revenue as well as enhancing irrigation development,
strengthening mechanized commercial farming to enhance production and
productivity. (Kilimo Trust 2019); and
-- The Kilimo Trust research also suggests policy prioritization should include
“Providing [less] formidable and [less] bureaucratic regulatory framework for
registration of, and for contracting for, farmer based institutions;” and “investment
in agricultural research and extension of horticulture and FFVs, including new
crops and varieties; disease control; cost-efficient post-harvest handling;
reducing/ eliminating pesticide residues; and preventing the spread of horticulture
pests.”
Thirdly, prioritization should include incentive prioritization, that is “developing
incentives on making accessible affordable land, and offering tax rebates [exemption]
for producers” of export FFVs. (GoE has done this with a 30-year free lease on land,
free boreholes for irrigation as well as electricity connection from main grids Investors in
horticulture hubs have zero tax privilege on exports. They are exempted from income
tax for 8-10 years and from duties and other taxes on imports of machinery,
construction materials, spare parts, raw materials and vehicles)
Recommendation 4. Another recommendation based on the experience of Kenya and
Ethiopia by the Kilimo Trust research is the need for development of “strong
mechanisms and institutions for enforcing quality and standards leading to export
market [value chains] which are stringent and dynamic”. This development is needed
both in private and public sectors; in the public sector it means strengthening the
institutions and their policies and activities, including enforcement activities, in the
Ministries of Agriculture and Trade. As the study on successful inclusion of smallholder
farmers in Kenya recommends, it should also include improved enforcement of
contracts between farmers and exporters (Ajwang, 2018.)
Recommendation 5. The experience of Kenya and Ethiopia also suggest that the public
sector should provide incentives to private sector to catalyze farmer organizations,
including providing conducive infrastructure in rural areas where strategic FFVs are
grown. (Kilimo Trust, 2019.) This could include
46




storage facilities, as Ethiopia has done by establishing Rural Transformation
Centers, which are intermediate infrastructures placed close to farming areas
where farmers receive agricultural inputs, as well as deliver their produce so it
can be sorted, stored, and sometimes undergo primary processing before
onward transport to an Integrated Agro Industrial Parks;
cold chain infrastructure, as Kenya has done by constructing 8 cold storage
facilities in some selected major production areas;
irrigation schemes, as Ethiopia has done by harnessing technology to expand
irrigation to farmers who traditionally relied on rainfall; the result has been that
the area under irrigation increased by almost 52% between 2002 and 2014; and
improvement on key roads important for marketing FFVs, as both Kenya and
Ethiopia have done on projects such as Lamu Port-South Sudan-Ethiopia
Transport Corridor (LAPSSET) that involves building of railway, electricity, roads
and the Lamu Port.
Recommendation 6. An analysis of the self-regulating environment in the FFV export
private sector in Kenya and Ethiopia suggests that Uganda needs stronger private
sector bodies, exporter associations among others, “that address sector-wide
externalities and coordination problems” and “which will develop strong mechanisms
and institutions for enforcing quality and standards leading to export market [value
chains] which are “stringent and dynamic”. This will include
 development of a domesticated stringent quality system such as GlobalGAP,
facilitating the exchange of market information, and provide marketing and
technical support. It will also include
 development of common code of practice such as Kenya Horticulture Standard
KS1758 part II: FRUITS & VEGETABLES “which acts as a Code of Conduct for
the horticulture industry developed by Kenya Bureau of Standards in
collaboration with the Kenya Horticultural Council. It streamlines the industry in
terms of food safety standards, introduces efficiency in the production systems
and ensures traceability of horticultural produce.”
 In addition, exporter associations can assist export businesses in finding
“modalities to support value chain functions to allow SHF [smallholder farmers] to
supply quality which is acceptable in export markets through contract farming
and formal and informal relationships with marketing cooperatives and farmer
associations.” (Kilimo Trust, 2019.)
 Clearly one of the most important pathways to this improved relationship
between exporters and smallholder suppliers, is the application of the lessons
from the successful ongoing business interaction between Kenyan exporters and
smallholder farmers. These lessons, which exporter associations are in a key
position to promote, include the willingness of the exporter to provide improved
47
transparency and communication about price and other matters; enter into
relational contracts with smallholders which include flexibility to the price needs
and other needs of smallholder farmers; and outsourcing management of
smallholder outgrower networks to model outgrower farmers. In the Kenya
experience, the key to making this innovative arrangement work was that both
exporters and smallholder farmers realized that it was in their long-term
advantage. For exporters, it was the realization that the higher short-term cost of
this arrangement was less than the longer-term cost of getting a negative
reputation because of the inability to provide a stable supply to a high value
export market. For farmers, it was the realization that providing for the export
market under (relational) contract was more reliable season after season that
producing for local markets. (Ajwang, 2018.)
48
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