For years, governments across Africa have emphasized the need to empower small-scale farmers—who are the region’s primary producers—by providing financial support and other resources to enhance agricultural production, achieve food security, and drive economic growth.
However, Uganda is also addressing the financial hurdles faced by large-scale agricultural producers, recognizing their significant potential to enhance farm productivity and promote agro-industrialization with adequate support.
In line with this vision, the country’s Ministry of Finance yesterday unveiled an innovative Financing Scheme for Private Large-Scale Commercial Farmers. The initiative aims to boost agricultural production and advance Uganda’s agro-industrialization agenda.
In a ceremony that was led by Hon. Matia Kasaija, the country’s finance minister, the government continued to express its commitment to transforming the sector and ensuring food security for the nation by addressing the financial challenges faced by farmers.
The initiative aims to deliver timely, affordable, and accessible financial resources to farmers, underscoring their essential role in driving the country’s economic transformation.
Through this program, government-owned financial institutions such as Pride Microfinance, Post Bank, and Housing Finance Bank will contribute a principal sum of Sh176 billion to bolster agricultural production.
“Today is a landmark moment in our shared mission to boost agricultural productivity, enhance food security, and improve the livelihoods of our commercial farmers,” Kasaija said.
He observed that unpredictable weather, rising input costs, and limited access to technology have significantly increased challenges for farmers, particularly in securing financial support. The new financing scheme, he explained, is designed to remove one of the most significant obstacles that has long stifled the growth of large-scale farming.
“Grain production is labor-intensive and demands considerable investments in land preparation, seeds, fertilizers, irrigation, equipment, and more. Yet, for years, many farmers have struggled to access the capital necessary to scale their operations, embrace modern technologies, and ensure consistent production,” he remarked.
Safeguarding food and animal feed production
The scheme’s launch aligns with the government’s intensified efforts to safeguard food and animal feed production. Kasaija pointed to the Ministry of Agriculture, Animal Industry, and Fisheries’ May 2022 warning about an imminent food insecurity crisis, which called for urgent action.
In response, the government has endorsed a series of strategic initiatives, including subsidized loans for private large-scale commercial farmers.
Uganda’s agricultural sector accounts for over 24% of the country’s GDP and provides employment for approximately 70% of the population.
The program is designed for private large-scale farmers cultivating at least 50 acres and will operate for an initial six-year period.
It aims to facilitate the production of 132,600 metric tons of crops, including maize, beans, soybeans, and sorghum, alongside animal feed production, across a total of 114,661 acres.
“This Ministry has conducted numerous stakeholder engagements to finalize this financing mechanism aimed at empowering private large-scale commercial farmers to enhance food and animal feed security across the country,” Kasaija stated.
He underscored the critical role of partnerships with financial institutions, including Pride Microfinance, Post Bank, and Housing Finance, in turning this vision into reality.
Funds strictly for production
On his side, Agriculture Minister Frank Tumwebaze emphasized the funds are strictly for agricultural production, not trading.
The ministry will work closely with district-level stakeholders to identify eligible farmers and ensure the program effectively reaches its intended beneficiaries.
“This initiative will strengthen food and feed security while empowering farmers to scale up and commercialize their operations,” said Tumwebaze.
Ramathan Ggoobi, the Permanent Secretary to the Treasury (PSST), emphasized the program’s alignment with Uganda’s Tenfold Growth Strategy, which seeks to expand the GDP from $50 billion in the 2022/23 fiscal year to $500 billion by 2040.
