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In light of the COVID-19 pandemic, Feed the Future Uganda Inclusive Agricultural Markets (FtF IAM) provides a combination of tailored interventions: improving the health and hygiene practices in the marketplaces and food supply chains to prevent the spread of COVID19, business advisory services, input discounts, and risk capital awards to smallholder farmers and key agribusinesses at strategic points in the value chains, making them more resilient and rebound to position the agribusiness sector for long-term growth.

IMPROVING THE HEALTH AND HYGIENE PRACTICES IN THE MARKETPLACE PLACES TO PREVENT THE SPREAD OF COVID-19

FtF IAM has identified and supports food market and trader associations within the Feed the Future 38 districts across four regions: Southern, Eastern, Northern, and the Karamoja sub-region of Uganda, to improve sanitation and observe standard operating procedures (SOPs) at local food markets for the benefit and safety of traders, customers and farmers.

Areas of Focus

City food markets in Lamwo, Amuru, Gulu, Nwoya, Omoro, Oyam, Kole, and Lira to:

  • Acquisition and production of small-scale equipment and products needed to protect market traders and customers that support the implementation of COVID-19 prevention measures.
  • Messaging campaigns and communications materials for traders and customers.
  • Supporting management to improve processes for adhering to COVID-19 SOPs
  • Improving sanitation and conditions for traders, considering the unique needs of men, women, and youth that are required to keep everyone safe and healthy.
  • Supporting traders to maintain strong relationships with farmer suppliers and where, possible, adopt ICT solutions to improve contact-free trade, logistics, and payments.

TACKLING THE COVID-19 ECONOMIC IMPACT ON BUSINESSES

Background

The emergence of the COVID 19 pandemic in March 2020, caused the Ugandan Authorities to roll out a series of mitigation control measures such as movement restrictions, curfews, and social distancing aimed at curbing the spread of the virus. These efforts severely disrupted agri-food supply chains in Uganda including implications on its agricultural markets, increase in the agro-input prices due to higher production and transportation costs, reduction in business demand due to reduced purchasing power among the smallholder farmers, low demand, and temporary closures heavily impacted cash flows and access to finance among others. Considering the economic impacts of the COVID-19 pandemic on businesses, farmers, and their input, supply chain, and market networks, FtF IAM is providing capacity-building assistance and seed capital to agribusiness firms to revamp their systems and structures.
FtF IAM has set up a Market Resilience Facility—composed of performance-based grants, subcontracts, and
technical assistance—to provide targeted support to agribusinesses and market actors.
This support helps agribusinesses recover from the secondary effects of COVID-19 and become more
resilient by:
• Supporting business adaptations through advisory services;
• Facilitating access to finance and promotions for inputs and technologies; and
• Scaling the use of digital platforms and management technologies.

INSIDE FtF IAM’S MARKET RESILIENCE FACILITY
• Offers capacity building and risk capital for farmers, firms, and organizations whose ability to engage in
the market has been affected by the COVID-19 pandemic
• Builds local capacity to support farmers and agribusinesses with seed capital in the form of pay-for results awards that reward performance and avoid distorting the market.

IMPACT OF COVID-19 ON UGANDA’S AGRIBUSINESS ACTORS

A study conducted by FtF IAM in August 2020 revealed that most farmers had experienced a decline in input availability and increases in cost due to higher production and transportation costs, likely due to the public transportation ban. COVID-19 reduced farmers’ access to markets impacting their incomes and purchasing power to invest in seasonal inputs. This has resulted in a reduction in farm production areas and farm productivity. Most agribusiness firms reported a reduction in demand, reflecting the reduced purchasing power of smallholder farmers. In addition, most businesses experienced a reduction in the supply of required product raw materials. Businesses and farmers have equally reported difficulty in accessing financing for their operations, due to increased requirements by financial institutions. The reduced access to finance represents a significant challenge to businesses and farmers that need extra resources to position them to be able to respond to challenges posed by COVID-19-induced disruptions. These factors combined (e.g., increased input, labor, and transport costs, expensive and/or inaccessible financing), have put significant pressure on the viability and profitability of Ugandan farmers and business firms operating in the country.

EXPECTED RESULTS

Expected results under this intervention are:

  • To reach 5,000 – 10,000 farmers with input discounts across the 5-6 awards.
  • To provide twenty-five (25) agribusiness companies with average support of $50,000 in combined performance-based financial and technical assistance awards.
  • Revolving Seed Capital fund valued at US$500,000 operationalized and managed efficiently to retain and grow initial investment. The Activity also seeks to crowd in additional funds from donors who buy into the model.
  • Five- ten exporters diversifying into new markets, upgrading quality and processes required: other processors learning from these partners and exploring similar market opportunities.
  • A minimum of four marketplaces (one in each of the four regions) supported to upgrade sanitation facilities and implement related protocols for COVID-19 compliance. Additional reach may be achieved if the Activity identifies strong partners with the capacity to support more than one market in a region.

 

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