World Bank hails investment in Ugandan farming

Reuters | Friday August 14, 2009

  • Investment increases scale, output of African farms
  • Guidelines needed to stop poor farmers losing land
  • Rich nations pledged $20 billion investment
  • Middle East importers invest in Africa to secure food

By Lesley Wroughton

BUGIRI, Uganda, Aug 14 (Reuters) - At the Tilda rice processing plant in rural Uganda near the Kenyan border, Indian investors are providing a livelihood and market for more than 1,000 farmers who sell their crops for cash to the mill.

World Bank President Robert Zoellick visited the operation on Thursday to see how investments like Tilda's, supported by loans from the World Bank, can help the country move toward commercial farming and greater food security.

"This is evidence of Uganda's great potential to become a food basket for the region," Zoellick told a small gathering of Tilda employees. "There is a great interest in the world about expanding agricultural production," he added.

The plant produces about 20,000 tonnes of rice a year, some 20 percent of Uganda's output, grown on land owned by the local farmers. It is mainly for domestic consumption but some is exported to neighbouring states.

By expanding irrigation from the nearby freshwater lake, Tilda hopes to quadruple production over the next few years.

Uganda boasts 47 percent of all the arable land in east Africa, giving it huge agricultural promise. But like much of the continent, it has been hamstrung by a lack of investment and financing to take subsistence farming to a larger scale.


The U.N. Food and Agriculture Organization (FAO) estimates that a third of sub-Saharan Africans are undernourished, compared with about 6 percent in North Africa and 15 percent in Asia. Some 60 percent of the undernourished are in east Africa.

The food price crisis in 2007 and 2008, when global commodity prices hit record levels, drew attention to the chronic underinvestment in farming in developing countries, where governments dealt with the crisis by imposing export bans to keep prices down as the poor struggled to feed themselves.

While the crisis has eased, prices are volatile and still higher than ever before, prompting governments in the Middle East and Asia that rely on food imports to look at securing future supplies by buying or leasing African farmland.

A group of Saudi-based investors announced earlier this monthy a seven-year plan to develop and plant 700,000 hectares to produce 7 million tonnes of rice in countries like Uganda.

Industrialized nations last month pledged $20 billion to invest in agriculture in developing countries, but still need to work out the details of how it will be spent. The World Bank could be put in charge of managing the money for donors.

Still, there are fears that the growing land grab will force poor rural Africans off land they have farmed for generations. The World Bank and other international institutions are drawing up guidelines to ensure such abuses do not happen.


Ugandan President Yoweri Museveni sees the need for increased farm production not only as a food security issue but also as a way to provide rural families with income.

"The majority of the population farms the traditional way," Museveni said after talks with Zoellick on Thursday.

To change practices and boost crops, he added, investments were needed in irrigation and in research and technology to improve yields, and fertilizers and seeds.

"This should be done by the private sector, but the private sector is not coming forth so we're looking at public-private partnerships," Museveni said.

Still, to become a competitive food producer, landlocked nations like Uganda have to depend on neighbours like Kenya for access to the sea and export markets, requiring investment in transport, including better roads and railways.

At the Malaba border post not far from the Tilda plant, Zoellick saw how the Kenyan and Ugandan governments are working together to reduce bureaucratic red tape, cutting waiting time for trucks to cross the border to one hour from four days and increasing trade between the two countries.

Encouraged, Zoellick said the World Bank would consider helping to finance the rehabilitation of the existing railway line between the Ugandan capital Kampala and Kenya's Mombasa port, and a railway extension to south Sudan and Tanzania to drive regional integration further. (Editing by Daniel Wallis and Tim Pearce)

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