The document discusses the agriculture sector in developing countries. It notes that agriculture contributes significantly to GDP, employment, and poverty reduction in many low-income countries. However, agriculture in Uganda is performing poorly due to factors such as lack of irrigation, poor technology, high investment risks, and weak infrastructure. The strategies proposed to improve performance include improving information sharing with farmers, promoting fertilizer use, controlling pests and diseases, and increasing access to agricultural finance.

1. Agriculture Sector
• It is made up of five sub-sectors, i.e. cash crops, food crops, livestock,
fishing, and forestry. Agriculture is largely private-sector driven.
• Government plays a complementary role by investing in areas that are
critical but where private individuals are either not interested or lack
capacity to make substantial investment e.g. research, irrigation,
infrastructure etc.
The agricultural sector continues to play a crucial role for
development, especially in low-income countries where the sector is
large both in terms of aggregate income and total labor force.

2. Agriculture Sector (Cont’)
 Agriculture contributes to both income growth and poverty reduction in
developing countries by generating income and employment in rural areas and
providing food at reasonable prices in urban areas. The sector matters greatly in
low-income countries where about 60 percent of the labor force is employed in
agriculture: it accounts for 25 percent of GDP.
 Agriculture is the main source of livelihood for 86 percent of these rural
households. Some 75 percent of poor people still live in rural areas and derive the
major part of their income from the agricultural sector and related activities.
 Agriculture provides food, income and jobs and hence can be an engine of
growth in agriculture-based developing countries and an effective tool to reduce
poverty in transforming countries.

3. Agriculture Sector (Cont’)
• In addition to labor and food supply, agriculture plays an active role in
economic growth through important production and consumption linkages.
• For instance, agriculture can provide raw materials to nonagricultural
production or demand inputs from the modern sector. On the consumption
side, a higher productivity in agriculture can increase the income of the
rural population, thereby creating demand for domestically produced
industrial output.
• Such linkage effects can increase employment opportunities in the rural
non-farm sector, thereby indirectly generating rural income. Moreover,
agricultural goods can be exported to earn foreign exchange in order to
import capital goods.

4. Roles played by Agricultural sector
Contributes to GDP
Creates employment opportunities
Provides market for industrial products
Provides raw materials for the Agro-based industries
Source of foreign exchange
Source of livelihood for many people i.e. in terms of both food and
income

5. Why is Agriculture Performing Poorly?
Absence of adequate irrigation infrastructure to mitigate the problem of seasonality. Uganda’s
weather patterns have become increasingly unpredictable yet government has not invested enough
in irrigation.
Crop disease and pests and vector attack which hamper production, most significantly the banana
wilt, cassava mosaic virus, and other diseases and pests.
Poor technology used at all levels – production, processing, storage, and distribution. Many
farmers cannot afford hybrid seeds, fertilizers, herbicides, extension services, tractors and other
machinery, irrigation equipment, modern processing, storage, and distribution equipments etc.
High risks and cost of investment: Agricultural production requires significant capital outlay
which many Ugandan farmers cannot afford. Yet banks do not want to provide credit to agricultural
investors because it is risky and costly to administer such loans.

6. Why is Agriculture Performing Poorly? (Cont’)
 Traditional and cultural attitudes: Many Ugandan farmers are reluctant to embrace modern methods of
farming. They are used to old practices which have become a tradition – use of hand hoes, recycling of
seed and animal breeds, dominance of women in production and men in marketing, etc.
 Poor infrastructure especially roads (mainly rural feeder roads), railway, electricity, storage facilities,
etc.
 High marketing margin: This is the difference between the producer price (received by the farmer) and
consumer price (paid by the consumer) of an agricultural produce. It affects both production and
demand.
 Weak value chains: Production, processing and marketing are not closely linked. There are lots of
distortions in Uganda’s agricultural value chains -- they are full of actors that do not add any value to the
chain but impose costs thereby building a burden on those who add value!

7. Why is Agriculture Performing Poorly? (Cont’)
Poor land tenure: Uganda’s fast growing population is worsening land
fragmentation especially in the fertile regions. This has rendered large-scale
commercial farming difficult.
Volatile prices for agricultural produce: This means any growth rates in the
sector may not be sustained.
Low education levels

8. Strategies to improve the performance of Agriculture
sector
Improving agricultural information system: To be done through the Agricultural
Technology and Agribusiness Advisory Services (ATAAS). This is intended to
improve sharing of information on research and extension among farmers.
Supporting private and public sector investments to enhance availability of
quality seed, planting, stocking, and breeding materials.
Promotion of the use of fertilizers to increase production per unit area.
Control of pests, vectors and diseases to reduce production losses in cattle,
coffee, cassava and bananas

9. Strategies to improve the performance of Agriculture
sector Cont’
Increasing access to finance: Broadening of awareness for agribusiness
enterprises about availability of agriculture finance and credit.
Proper regulation of fishing: Intensifying regulation and enforcement of
activities to address challenges in fisheries department
Increasing irrigation by availing newly rehabilitated schemes such as Agoro,
Mubuku and Doho