Private Sector Investment in a Changing Climate: Resilient rice value chain development in Uganda

The Private Sector Investment in a Changing Climate (PSI–Climate) initiative aims to explore how domestic private sector investments can support climate risk management along agricultural value chains.

The increased risk and uncertainty that result from the impacts of climate change creates challenges for all actors along agricultural value chains. The domestic private sector plays an important role in driving and shaping the development of agricultural value chains. Specifically, the private sector has the potential to direct their investments in ways that enable climate risk management by different value chain actors, simultaneously reducing risks to their own bottom line.

This initiative specifically focuses on rice value chains in Uganda, where rice is one of the priority crops for the government's efforts to achieve food security and improve household income. The initiative targets two main sets of actors: private sector actors (mostly domestic seed companies and commercial banks) in Uganda who are investing at one or several points along selected rice value chains, and public sector actors (i.e., relevant government ministries, departments). For private sector actors, PSI–Climate seeks to demonstrate how climate risk management can be supported along agricultural value chains and the consequent benefits to their own business goals and objectives. For public sector actors, it aims to identify a set of policy options that encourage climate risk management by small and medium-sized enterprises, domestic commercial banks and other actors along agricultural value chains.

The research focuses on two case studies. The first is on domestic private investments in new rice seeds in Northern Uganda in partnership with a domestic seed company, Equator Seeds. The second looks at investments in financial products with a commercial bank, the Centenary Bank, in Eastern Uganda. Data collection in both cases is based on focus group discussions, interviews and dialogue processes with key actors along the selected rice value chains, as well as engagement with relevant experts. IISD is implementing this project in collaboration with the Ministry of Finance, Planning and Economic Development and the Economic Policy Research Center (EPRC).

This project builds on IISD's previous work on building climate-resilient agricultural value chains.

Building the Climate Resilience of Agriculture Value Chains in Uganda through Stakeholder Dialogues

To date, relatively little has been done to support climate adaptation along agricultural value chains beyond the production level.

IISD collaborated with the Uganda Ministry of Trade, Industry and Cooperatives, Makerere University and the Climate and Development Knowledge Network on this innovative pilot initiative that aimed to address this gap by exploring how to take a more integrated approach to climate adaptation using a value chain approach. The initiative aimed to support the identification and management of climate impacts along the coffee value chain in Uganda. The analysis of climate impacts and responses along the value chain was based on a qualitative and participatory approach using Climate Dialogue Theatres—a method that uses drama to elucidate value chain actor perceptions of climate impacts and responses, and to promote adult learning on climate adaptation.

The project showed that climate hazards such as droughts, floods and changing rainfall patterns already negatively affect all actors along the coffee value chain, but in different ways and to different extents. Coffee farmers and processors generally tend to be more vulnerable to climate hazards than traders, middlemen and exporters, due to their limited diversification, weak organizational capacities and the unfavourable policy environment. Most actors are already making some effort to minimize the negative impacts of climate hazards on their activities, but not all responses are sustainable. Furthermore, there is evidence that a lack of communication and trust between and among actors along the value chain particularly hampers climate adaptation.

The study recommends three win-win solutions along the coffee value chain:

  • To improve networking and partnerships among key actors for climate adaptation by strengthening existing platforms and structures at all levels and exploring the role of incentives (e.g., standards).
  • To develop new, flexible financial products to support climate-resilient and inclusive agro-value chains through capacity building and innovative public-private partnerships.
  • To increase investments in climate-resilient infrastructure such as roads, irrigation systems, storage facilities and telecommunications.

This work is one of a larger group of IISD projects focusing on climate change adaptation along agricultural value chains.

Report

Supporting Implementation of the Mining Policy Framework in Member States of the Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development Uganda: Assessment of implementation readiness

April 22, 2015

The growing demand for non-renewable mineral resources is among the world’s greatest sustainability challenges.

But for many countries it can also present a significant opportunity for growth and development. While grappling with the important question of how to meet the resource needs of a growing population in a way that takes into consideration the needs of future generations, it is easy to overlook the role that mining and its benefits can play in a nation’s long-term social and economic development; with mining can come employment and skill development, investments in education, the construction of infrastructure, and the generation of much-needed revenue. The presence of a strong legal and policy framework is needed to maximize these benefits, a framework that promotes the development benefits of mining while upholding strong environmental and social standards. The Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development (IGF) is working to advance such policies and good governance practices through its Mining Policy Framework (MPF).

With support from the Canadian International Development Agency (CIDA), the International Institute for Sustainable Development (IISD) is working with selected member states of the IGF to help them operationalize practices consistent with the MPF. As a first step, IISD conducted an assessment of national law, policy and administrative frameworks for mining and minerals development and management in three IGF member states relative to the six themes of the MPF. The assessments measure the readiness of the member states to implement the MPF through these existing government measures. This report presents the assessment for Uganda, with a view to: helping the government target their efforts in implementing the MPF; informing capacity-building efforts; and allowing for monitoring of progress over time.

Report details

Topic
Investment Law & Policy
Mining
Region
Uganda
Impact area
Sustainable Economies
Publisher
IISD
Copyright
IISD, 2015
Report

Promoting an Integrated Approach to Climate Adaptation: Lessons from the coffee value chain in Uganda

March 18, 2014

Relatively little has been done to date to support climate adaptation along entire value chains.

Yet to secure sustainable investments in value chain development, decision-makers at all levels in the public and private sectors need to ensure that climate risks are managed not just at the production level, but also throughout the entire value chain, from production to marketing. This is particularly relevant for commodity-dependent developing countries, such as Uganda.

The International Institute for Sustainable Development collaborated with the Uganda Ministry of Trade, Industry and Cooperatives, Makerere University and the Climate and Development Knowledge Network during a six-month period in 2013 to provide a platform for dialogue on climate risk management among actors along the coffee value chain. This innovative new pilot initiative demonstrates how to take a more integrated approach to climate adaptation.

The analysis of climate impacts and responses along the value chain was based on a qualitative and participatory approach using Climate Dialogue Theatres—a method that uses drama to elucidate value chain actor perceptions of climate impacts and responses, and to promote adult learning on climate adaptation. The process mobilized a total of 80 participants representing farm input suppliers, coffee farmers, traders, processors, exporters and service providers from Rakai district (southwest) and Kampala.

The initiative shows that climate hazards such as droughts, floods and changing rainfall patterns already negatively affect all actors along the coffee value chain, but in different ways and to different extents. Coffee farmers and processors generally tend to be more vulnerable to climate hazards than traders, middlemen and exporters, due to their limited diversification, weak organizational capacities and the unfavourable policy environment. Most actors are already making some efforts to minimize the negative impacts of climate hazards on their activities, but not all responses are sustainable. The study also provides evidence that a lack of communication and trust between and among actors along the value chain particularly hampers climate adaptation.

The study recommends three win-win solutions along the coffee value chain: to improve networking and partnerships among key actors for climate adaptation by strengthening existing platforms and structures at all levels and exploring the role of incentives (e.g., standards); to develop new, flexible financial products to support climate-resilient and inclusive agro-value chains through capacity building and innovative public-private partnerships; and to increase investments in climate-resilient infrastructures such as roads, irrigation systems, storage facilities and telecommunications.

Report

Climate Risk Management for Sustainable Crop Production in Uganda: Rakai and Kapchorwa Districts

February 7, 2013

Agriculture is the backbone of the Ugandan economy. Most of it is rain-fed and relies on limited external inputs, making the country very sensitive to climate variability and change.

The impacts of floods and droughts on maize, beans and coffee production already threaten rural livelihoods. Temperatures in Uganda have been steadily increasing since 1960, and climate hazards such as floods and droughts have become more frequent and intense, a trend expected to continue. Ugandan smallholder farmers already know, and in some cases apply, various global best practices to reduce climate risks. But much remains to be done to improve these local responses. Adopting small-scale irrigation, conservation agriculture measures, optimum crop diversification and intercropping techniques, and watershed-scale approaches to crop production could contribute to offsetting the negative impacts of climate change. Further efforts could disseminate culturally acceptable and affordable stress-resistant crop varieties, promote appropriate storage systems, improve road infrastructure and flood control structures, and enhance the role of information and communication technologies for accurate, reliable and timely climate information. Combining local and scientific knowledge for improved local weather forecasts and early-warning systems and for optimum use of agroforestry, for example, could provide innovative and practical solutions.

Guide

CRiSTAL Stories: CRiSTAL helps farmers adapt to drought on the slopes of Mount Elgon, Uganda

November 23, 2012

In this CRiSTAL Stories brief, Julie Karami-Dekens and Sophie Kutegeka document how the application of the Community-Based Risk Screening Tool - Adaptation and Livelihoods (CRiSTAL) framework in Sansaza parish, Eastern Uganda.

This led to the development of a community-driven water gravity flow scheme for irrigation to help people adapt to prolonged dry spells—a trend that may increase in the context of climate change. Other outcomes of the CRiSTAL process include: the development of a common understanding of climate issues, increased cohesion among local actors, and increased support for climate adaptation in the area from external agencies.

Guide details

Topic
Climate Change Adaptation
Food and Agriculture
Region
Uganda
Impact area
Climate
Publisher
IISD
Copyright
IISD, 2012
Report

Report on the Fifth Annual Forum of Developing Country Investment Negotiators - Investment and Sustainable Development: Developing Country Choices for a Better Future - October 17-19, 2011 - Kampala, Uganda

February 1, 2012

This is a meeting report of the Fifth Annual Forum of Developing Country Investment Negotiators, which was co-hosted by the Government of Uganda, the International Institute for Sustainable Development and the South Centre.

The Agenda can be found here (PDF - 476 KB).

Report details

Topic
Investment Law & Policy
Region
Uganda
Impact area
Sustainable Economies
Publisher
IISD
Copyright
IISD, 2012