1. OIL PALM COMPONENT

2. ENHANCING FARMERS 'COOPERATIVES
A CASE STUDY OF THE OIL PALM COMPONENT OF Ministry of agriculture and IFAD
Presented by Kabuye Kyofa
Oil palm Coordinator
Tel:
At the “Coop Research Seminar” - Feb 3, 2016, Washington DC

3. BACKGROUND The Project is a country’s strategic effort to;
GoU is investing in domestic production and processing of vegetable oils since 1998
The Project is a country’s strategic effort to;
Address the high poverty levels,
Reduce high importation of vegetable oils (85 -90% ), by increasing its domestic production
Improving health of the population through increased vegetable oil intake
Its an Import –substitution project

4. PROJECT HIGHLIGHTS
Project area Kalangala, Buvuma and Eastern, Northern and West Nile (52 districts)
Crops of emphasis- Oil Palm in Kalangala and Buvuma and mainland areas
sunflower; soybeans; simsim; Groundnuts in the Eastern, Mid West –Masindi, West Nile and Northern Uganda Region

5. OIL PALM COMPONENT
Developed through a PPP between Government of Uganda, BIDCO Uganda Limited (BIDCO) and farmers.
6,500 ha nucleus estate under Oil Palm Uganda Limited (OPUL), a company incorporated by BIDCO to implement the project in Kalangala.
Smallholder Farmers are targeting to develop 4,700ha on their owned farms
Government and IFAD established a Business Development Service center- Kalangala Oil Palm Growers Trust ( KOPGT) through which farmers are accessing credit facility, inputs extension services and mill
Through KOPGT farmers supported with loans worth USD 13.0 million for maintenance of their gardens, purchase of fertilizers, purchase of farm tools
Farmers formed an association Kalangala Oil Palm Growers Association for mobilization and advocacy

6. IMPLEMENTATION ARRANGEMENT
It’s a PPP-Public Private Partnership implemented through;
A Value chain approach, addressing the challenges encountered by different players along the value chain.
Clear roles and responsibilities for all the stakeholders involved with agreements in place,

7. MODEL FOR ENHANCED OIL PALM DEVELOPMENT IN KALANGALA
Negotiation for appropriate pricing mechanism
Assist in business plan development
Technical advisory & capacity building services
Production credit provision
Production input credit access
Smallholder Farmers L
KOPGT
(Farmer institution)
FFBs to KOPGT
Delivery of ffb’s collected from farmers
Payment to farmer after loan deductions for inputs supplied
Payment to Farmer Trust for ffb’s supplied
VODP2
Supply of fertilisers for smallholder farmers
Land acquisition & availability
Conduct environmental impact assessment
Advocacy on social issues (HIV/AIDS, Gender, etc.)
OPUL
(Estate + Processor)
Bulk supply of crude palm oil for refining
BIDCO
(Refinery)
MARKET
(Regional and Local Consumers)

8. ROLE OF KOPGT
Extension service : monitoring, organize field plantings; trainings, environmental compliance; liaise with research
Provision of Transport services to the farmers
Provision of financial services; extension of credit and loan recovery
Marketing services: Markets farmers produce/ Fresh fruit bunches to the Palm Oil Mill
Representation to the external and internal committees and boards
Service cost panel –procurement committee of the farmers
Pricing committee- determines the price of FFB
Holding of 10% shares in OPUL

9. KOPGT(CONTD…)
Mobilization and identification of farmers to participate in the smallholder scheme (criteria includes land, willingness to grow oil palm)
Monitoring and supervision of farmer practices
Provision of inputs: Seedlings, Fertilizers and farm tools

10. ROLE OF OPUL-PRIVATE COMPANY
Provision of technical advise BDS staff
Provision of quality seedlings
Provision of quality fertilizers and farm tools
Provision of market for farmers’ produce
Construction and maintenance of roads around the nucleus estate
Laboratory tests to assess nutrition levels of palm trees

11. ROLE OF DISTRICT LOCAL GOVERNMENT
Technical backstopping to farmers (beyond oil palm – food crops, home economics
Monitoring and supervision of the activities implemented by OPUL, KOPGT and the farmers
Construction of farm roads
Monitoring of the environment buffer, ensuring re-planting of trees in destroyed buffer zones

12. ROLE OF MINISTRY Provision of funds to the BDS for farmer loans
Negotiation of appropriate pricing mechanism
Business plan development for BDS to be sustainable
Technical advisory and capacity building services
Monitoring and supervision, documentation and knowledge management

13. IMPACT OF THE PROJECT
Kalangala 5th poorest in 1990s, now 3rd richest district in Uganda
Jobs created for about 3,000 people (plantations, mill, refinery)
1,770 households receiving project services (634 women)
600 farmers harvesting; each earning average of USD 130 per acre per month
Farmers who were first introduced to banking services by the project, have now set up their own Ssese Oil Palm Growers SACCO, where they save, access loans and other financial services.
Under environmental management, according to the newly launched Global Forest Watch March 2014, “Kalangala is one of the few places in the country with intensive forest gain since Kalangala contains considerable tropical forest carbon stocks and has a very high percentage of tree cover”. Global Forest Watch is a project by the World Resources Institute and provides near real time global information on deforestation based on landsat data and other analysis of forest change.

14. PROJECT IMPACTS contd…
250 kms of farm roads constructed on the island
Attracted another PPP for infrastructure development; Ferry services, Road, water supply and Electricity
Farmers have built better houses, new schools established, health centers constructed
Kalangala district transformed into one of the top tourist destinations in Uganda
Agro-tourism to see 10,000 hectares of Oil Palm and the white sand beaches.
15 beaches
2 Resort hotels

15. Qtn: How do we Strengthen the BDS??
The BDS is still owned by GOU and IFAD and farmers have minimum ownership
Discussions of devolving the powers are on going
The idea of new generation was born from here
The Business development service center is in place
Need to make the trust more accountable to farmers
Transforms into a business entity owned by the farmers
Farmers effectively participate in the affairs of the organisation

16. OPPORTUNITY FOR THE NGCs STRATEGY
Provides a more business oriented perspective
Improves the governance and leadership skills through trainings and coaching
Controls the monopsony influence and make the majority / suppliers more powerful in decision making
Creation of a one stop center for the investment ventures –life cycle
Many investment models similar to Oil Palm is ongoing in the country and being advocated to be built on the cooperative basis.

17. End
THANKS FOR LISTENING !

18. . .
Marketing of the farmers fruits by KOPGT