Will Government Mergers And Investments Truly Benefit Uganda’s Coffee Sector? – CoffeeTalk

Uganda’s coffee sector is a significant contributor to the country’s agricultural exports and income for millions of Ugandans. President Museveni has set a target of producing six million 60-kilogram bags of coffee annually to elevate the country’s position among leading global exporters. However, debates have intensified in recent years, focusing on key issues such as the involvement of foreign investors like Enrica Pinnetti and the proposed government rationalization plan to merge the Uganda Coffee Development Authority (UCDA) with other agencies.

The proposed merger of UCDA as part of a broader rationalization exercise has been at the center of debate. While government officials argue that merging agencies can streamline operations and reduce bureaucratic red tape, critics worry that the move could undermine the specialized support that UCDA provides to coffee farmers. UCDA has played a pivotal role in regulating, promoting, and developing the coffee sector in Uganda, providing technical assistance, quality standards, and market linkages. MPs should carefully consider whether dismantling this established institution will genuinely lead to efficiency gains or end up creating more confusion and reducing the sector’s overall effectiveness.

Coffee remains the lifeline of Uganda’s agricultural economy, supporting government revenue and directly sustaining over 1.7 million households. Any disruption in the regulatory framework or market structures could impact millions of livelihoods and dent government revenues. Uganda is the largest exporter of robusta coffee in Africa and the eighth largest producer worldwide. In comparison, Brazil leads the global market with over 60 million bags annually, followed by Vietnam with about 30 million bags.

The involvement of foreign investors like Pinnetti has raised concerns about the terms of agreements with investors and their long-term benefits to local farmers and the broader sector. A healthy debate is necessary as long as it remains focused on the key issues: How can foreign investments complement Uganda’s coffee growth strategies? Can these deals improve farmer income, enhance local processing, and ultimately drive up export revenues?

Lessons from successful coffee-exporting nations like Ethiopia and Colombia can be drawn from Uganda’s coffee industry. Moving beyond raw bean exports and focusing on value addition could significantly increase revenues, potentially double or triple earnings from coffee exports. MPs need to ask tough but necessary questions about the government’s plan to increase coffee production without compromising quality, the proposed UCDA merger, and safeguards in place to protect farmers’ interests.

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