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Development of Inclusive Markets in Agriculture and Trade

Status: On going

Funder: UNDP Uganda

Background


The United Nations Development Program (UNDP) and the Government of Uganda (GOU) are supporting the Development of Inclusive Markets in Agriculture and Trade (DIMAT) in Uganda. The DIMAT project aims to address most of the challenges cited in Uganda’s agriculture Development Strategy Investment Plan (DSIP), through contributing to its Programme 2 “Market Access and Value Addition”. By building on inclusive business approaches, the implementation strategy involves adoption of a business linkage approach.

This four year project (2011-2014) will utilize south-south approaches and solutions in implementation of activities. Project interventions will involve analysis and mapping of strategic value chains, linking producer groups with the market, provision of customized business development services, strengthening cooperatives and farmer groups, providing customized agricultural services support, introduction of innovative financing products and appropriate technologies and implementing the Business Call to Action (BCtA) through engaging the corporate private sector to develop and implement sustainable innovative business ideas that profitably involve as many small and medium enterprises as possible in their supply chains. The implementing partner (IP) of DIMAT is Enterprise Uganda (EU) with Kilimo Trust and the Private Sector Development Companies (PSDC) in Uganda, being responsible parties (RPs).

Planned Results
Four results areas are planned for DIMAT.

Result 1: Business Linkages, Established and Operationalized
Based on inclusiveness, potential for creating high income impact, sustainability of the interventions as a result of market demand, potential for up scaling up the interventions and in partnership with key stakeholders, this output aims to establish at least 20 fully functional business linkages between smallholder producers and market leaders. Contracts will used as indicators to measuring the strength of a linkage. This is as a result of the actual and perceived risks related to the development of joint ventures and market power imbalances. Contract negotiation assistance will be offered to safeguard interests of all parties and to offer the weaker parties alternative market options.

Result 2: Capacity of Smallholder Producer Groups and Business Support Associations’, Strengthened
A carefully customized demand-led approach to the provision of business services, marketing, market research, produce bulking, creation and/or strengthening of group governance structures, access to technology, brokering of business deals and development of market linkages will be employed in order to address business and market development needs. Producer Groups and Cooperatives offer an important avenue for achieving increased economies of scale and building capacity through training, extension and dissemination of market information. This will therefore be used as the main outreach method for building the capacity of producers as well as contract negotiation.

Result 3: Innovative Pro-poor Business Concepts, Developed and Operationalized
DIMAT project will engage the corporate private sector to promote innovative pro-poor business models - including those which create mutually beneficial business linkages between micro and small local producers with large local and international enterprises - and will promote advocacy for the use and alignment of Corporate Social Responsibility (CSR) resources in ways that contribute to the development of inclusive markets. This will be a unique platform for private sector corporations to commit themselves to support the acceleration of income generation through inclusive and sustainable core business activities.

Result 4: MSME’s Access to Assets for Productive use (Finance, Market Information and Technology), Increased
Products currently on offer in Uganda’s financial markets are largely of a short term nature and financial institutions are wary of agriculture sector financing due to the real and perceived risks associated with the sector. Quite apart from the intermediation gaps affecting the whole sector, the project will pilot products that have worked in other countries and sectors in parallel with the technical competencies and management capacities of the user groups. This will ensure business linkage development initiatives are not stymied. Pilot mechanisms to access various products e.g. patient capital, contract financing, subsidy arrangements (e.g. consider replication of the Uganda Saw Log project), guarantee schemes and returnable grants (e.g. consider replication of the Kilimo Trust’s ‘Empowering Farmers through Innovative Marketing System’ technology project), with the objective of facilitating asset acquisition and funding of other agribusiness activities will pursued.

To download the DIMAT brochure, click here

Results So Far
To access the DIMAT fact sheet for the period July, 2013 – June 2014, click here.

UNDP Uganda: as the source of funds, UNDP Uganda (http://www.undp.or.ug/)is an important partner in ensuring success of the project.
Small and medium producer groups in rice, beans and cassava: the producer groups are important in the linkage formation for the form the supply side of the value chains.
Market off-takers: these include big private companies buying rice, beans and cassava either for processing, trading or exporting.
Corporate companies: one of the approaches being used by DIMAT is Business Call to Action (http://www.businesscalltoaction.org/). Such companies are important partners for they are willing to invest in concepts that will help meet the objectives of the project.
Government of Uganda: Through Enterprise Uganda, which is a public-private partnership organization and is Implementing partner of DIMAT

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Contacts

Kilimo Trust Head Quarters
Plot 42 Princess Anne Drive, Bugolobi, Kampala Uganda
Telephone: +256 392 264 980/1/2
Email: admin@kilimotrust.org

Kilimo Trust Tanzania
Plot 455, Avocado Street, Kawe
P.O.BOX 106217
Dar-es-Salaam, Tanzania
Tel: +255 22 278 1299
Email: admintz@kilimotrust.org