Assessment of marketing channels for crops, livestock and their products and inputs for agricultural production in south eastern Uganda Laker, C. D; Mugasi, S; Sabiiti, R; Nsubuga, D.K and Akena, F November 2003 Table of contents List of Acronyms 4 List of tables 5 Executive Summary 6 Introduction 10 Terms of reference 11 Methodology 12 Survey Area 12 Data Collection 12 Justification of data collection of the methodology 12 The Interviews 13 Secondary data 13 Analytical framework 14 SECTION ONE 15 1.0 Assessment of the availability and quality of markets 15 1.1 Introduction 15 1.2 The structure, conduct and performance of agricultural markets 15 1.2.1 Structure of agricultural markets 15 1.2.2 Conduct of Agricultural Markets 16 1.2.3 Performance of Agricultural Markets 17 1.3 The Main Agricultural Products by Area 19 1.3.1 Crops produced 19 1.3.2 Livestock Production 21 1.3.2.1 Livestock Products 21 1.3.2.2 Livestock Markets 22 1.3.3 Fish Production 22 1.4 Characteristics of Consumers and their preferences. 23 1.5 Seasonality Patterns of Agricultural Production 24 1.6 Marketing constraints 25 1.6.1 Primary and secondary level 25 1.6.2 Tertiary level 26 1.6 Conclusion 26 1.7 Recommendations 27 SECTION TWO 29 2.0 Demand and supply of agricultural inputs in South Eastern Uganda. 29 2.1 Introduction 29 2.2 Procurement Pathways for Agricultural Inputs 29 3.3 Supply of Agricultural Inputs 32 3.3.1 Crop inputs 32 2.3.2 Livestock inputs 35 2.4 Demand for Agricultural Inputs 38 2.4.1 Demand for Crop Inputs 38 2.4.2 Demand for Livestock Inputs 42 2.5 Constraints faced in procurement and supply of agricultural inputs 45 2.5.1 Farmer constraints 45 2.5.2 Stockists' constraints 46 SECTION THREE 50 3.0 Storage and Processing of Agricultural Products in South Eastern Uganda 50 3.1 Introduction 50 3.2 Storage and Processing Practices 50 3.2.1 Storage Practices 50 3.2.2 Processing Practices 51 3.3 Storage and Processing Infrastructure 54 3.3.1 Storage Infrastructure 54 3.3.2 Processing Infrastructure 56 3.4 Constraints in storage and processing of agricultural products 56 3.4.1 Storage constraints 56 3.4.2 Processing constraints 57 3.4.3 Constraints associated with fish storage and processing 58 3.5 Conclusion and Recommendations 58 3.5.1 Conclusion 58 3.5.2 Recommendations on storage and processing 59 SECTION 4 63 4.0 Institutional Framework for Marketing of Agricultural Produce/Products 63 4.1 Introduction 63 4.2 Institutional Involvement in Marketing of Agricultural Produce 63 4.2.1.1 Local Government Institutions 64 4.2.1.2 Central Government Institutions 67 4.3 Constraints in the formulation and implementation of strategies for improved agricultural marketing 75 4.3.1 Constraints facing the Districts 75 4.3.2 Constraints facing farmers associations and co-operative societies 76 4.3.3 Constraints facing the private sector 77 4.5 Conclusion 77 4.6 Recommendations. 78 General Concluding Remarks 79 References. 82 Annex 1 - Data Collection Instruments 83 Annex II. Annual national production figures 92 Annex III. Production Data disaggregated by District, Region and Year 97 Annex IV — Livestock numbers by type and district 110 List of Acronyms AGOA African Growth Opportunity Act BMU Beach Management Units CDO Cotton Development Organization COMESA Common Market for East and Southern Africa DFID Depai intent for International Development EAC East African Community FDG Focus Group Discussion FITCA Farming In Tsetse Controlled Areas IDEA Investment in Developing Export Agriculture IFAD International Fund for Agricultural Development IITA International Institute of Tropical Agriculture MAAIF Ministry of Agriculture Animal Industry and Fisheries MT Metric tons NAADS National Agricultural Advisory Services NARO National Agricultural Research Organisation NGO Non Governmental Organisation NRI Natural Resource Institute PMA Plan for Modernization of Agriculture PRIDE Promotion of Rural Initiatives and Development Enterprises RA Rapid Appraisal SAPS Structural Adjustment Programs SODIFA Soroti District Farmers Association SCP Structure Conduct and Performance UCDA Uganda Coffee Development Authority UOSPA Uganda Oil Seed Producers' Association UBOS Uganda Bureau of Statistics UIA Uganda Investment Authority UNCCI Uganda National Chamber of Commerce and Industry UBOS Uganda Bureau of Statistics UEPB Uganda Export Promotion Board UMA Uganda Manufacturers Association USAID United States Agency for International Development WFP World Food Programme List of tables Table 1.1 Main agricultural products/produce in southeastern Uganda, August, 2003. Table 1.2. Cassava Production Table 1.3. Maize Production Table 1.4. Sweet potato production Table 1.5 Finger Millet Production Table 1.6. Sorghum Production Table 1.7. Ground Nut Production Table 1.8 UBOS Crop Survey Module 1999/2000 Production of Cooking Banana by Region (MT) Table 2.1 Availability of different crop production inputs in southeastern Uganda, August 2003. Table 2.2 Availability of different livestock production inputs in six districts in southeastern Uganda, August 2003. Table 2.3 The demand and supply situation of main agricultural inputs in selected districts in South Eastern Uganda. (2003) Table 2.4 Level of inputs use as revealed during community focus group discussions (FGD) and meetings with district officials (DO) Table 2.5. Annual seed sales from 1997 — 2000 (metric tones) Table 2.6 Crop input sales for SODIFA for May 2003, Soroti District. Table 2.7 Crop input sales for Idha Tugye Farm Agency in Bugiri for July 2003. Table 2.8 Crop Input sales for July 2003 for MK Farm Supply Shop in Mayuge District. Table 2.9. Crop input sales for July, 2003 for Kamuli Agriculture Shop, Kamuli District Table 2.10 Fertilizer sales for July 2003, for Kamuli Farmers' Centre, Kamuli District. Table 2.11 Crop inputs stocked by Kintu Agro, August 2003, Mukono District. Table 2.12 Animal drug sales for July 2003 for SDB farm supplies, in Busia Town. Table 2.13 Livestock input sales for the Idha Tugye Faun Agency in Bugiri for July 2003 Table 2.14 Livestock Input sales July 2003 for Bunya Modern Farmer in Mayuge District. Table 2.15 Livestock Input sales for July 2003 for Kamuli Farmers Shop, Kamuli District. Table 4.1 District Farmers' Association and their membership, August 2003. Table 4.2 NGOs and CBOs operating in different districts, August 2003. Executive Summary This report is an output from a study conducted in August 2003. The FITCA Project is introducing a number of interventions, aimed at decreasing losses in productivity due to animal trypanosomosis, while at the same time increasing household incomes for the primary beneficiaries/stakeholders, the livestock keepers. It is therefore critical to assess the main constraints to marketing of agricultural produce in the region where the project is operational. This activity therefore assesses the demand and supply for agricultural inputs and produce (identifies the marketing and distribution channels for inputs (seeds, animal drugs, fertilizers etc), as well as the outlets for agricultural produce (live animals, milk, hides and skins, draft power, eggs etc) in the project area and, the institutional framework available at the district for promotion of agricultural marketing and the storage and agro-processing practices and infrastructure available at household and community levels. The report provides an assessment of marketing channels for crops, livestock and their products, and inputs for agricultural production in six districts of south eastern Uganda. It gives an overview of the main crop and livestock enterprises in the six districts, production levels and the current market situation, with specific reference to structure of the markets, constraints and opportunities. It also assesses the demand and supply of agricultural inputs, with specific emphasis on the procurement pathways, utilization of inputs by farmers and constraints faced in delivering these inputs. Also documented in the report is an assessment of processing and storage of agricultural produce in the region. Lastly, the report examines the strategies for marketing of agricultural products with a closer look at the institutional framework available at district level for the promotion of agricultural marketing. The study was largely qualitative, and the methodology used was based on rapid assessment techniques using both primary and secondary data. Primary data was collected through interviews with respondents at district and community level, while secondary data was obtained from literature review and analysis of available data. Data analysis is mainly descriptive with most of the data being presented in tables. Below is a summary of the findings. Crop production is the main economic activity in all the six districts studied, Maize and cassava are the most important food crops while cotton and coffee are the main cash crops. The region was the largest producer of major grains for the year 2000 in Uganda. Livestock production is mainly for subsistence consumption of milk and also provision of draft power, with limited trade outside the districts. Fish production is also an important economic activity in all districts except Soroti, with Lake Victoria being the main source. Fish farming is another economic activity but is severely constrained by high investment and maintenance costs. The structure, conduct and performance (SCP) of agricultural markets in the region are such that farmers do not get their deserved share of the marketing proceeds. Due to poor information flow, poor road networks and poor storage facilities, farmers have very limited trading opportunities. They are mainly price takers with no bargaining powers over their produce. The main recommendations include improvement of the rural road network, improve farm prices through improvement in quality and reduction of post harvest losses, encourage and facilitate formation of farmer groups as a way of reducing marketing transactions costs, strengthen marketing information systems, and provision of rural finance.