Uganda’s coffee sector in turmoil as UCDA faces dissolution

UGANDA – Uganda’s coffee industry is at a turning point as the government moves to dissolve the Uganda Coffee Development Authority (UCDA), sparking heated debates in Parliament and across the country. 

The decision is part of the Rationalisation of Agencies and Public Expenditure (RAPEX) initiative, which aims to streamline government agencies to cut costs and improve efficiency.

The UCDA, established to oversee Uganda’s coffee sector, has played a critical role in its growth and stability for decades. 

Its responsibilities include certifying coffee quality, registering marketers, managing data, monitoring global price trends, and promoting Ugandan coffee on the international stage.

Farmers and exporters have long credited the authority with strengthening Uganda’s global coffee presence.

Controversial proposal

Under RAPEX, the government intends to merge the UCDA into the Ministry of Agriculture, Animal Industry, and Fisheries (MAAIF). 

The ICT Minister has argued that the merger will streamline operations, enhance efficiency, and encourage value addition without causing major job losses. Proponents believe this consolidation could position Uganda as a more competitive player in the global coffee market.

However, the decision has faced resistance from multiple stakeholders. Critics, including Muhammad Muwanga Kivumbi, head of the Buganda Parliamentary Caucus, argue that the UCDA’s independence and specialized expertise have been critical to the industry’s success. 

Kivumbi has expressed concerns that MAAIF’s track record in managing other agricultural sectors, such as fisheries, raises doubts about its ability to oversee the coffee sector effectively.

Adding to the controversy is Section 5 of the Coffee Amendment Bill, which proposes replacing the UCDA’s marketing structure with an auction system. 

Kivumbi has labelled this a “satanic clause,” warning that it could lower farm gate prices and adversely affect small-scale farmers’ earnings.

Fears of market vulnerability

The UCDA has been instrumental in aligning coffee policies with Uganda’s economic objectives, advising the government on pricing and fostering expertise in coffee processing. 

Stakeholders fear that dismantling its systems could leave Uganda’s coffee farmers vulnerable to market fluctuations and reduce the country’s visibility on the global stage. 

Critics argue that the proposed merger lacks sufficient safeguards to protect farmers’ interests or maintain Uganda’s competitive edge in the coffee trade.

Some opponents have also raised concerns about the government’s industrial agreements, suggesting they might negatively impact the coffee sector. These fears reflect broader anxieties about the future of Uganda’s coffee market under the new structure.

Pivotal industry at a crossroads

Coffee is one of Uganda’s most valuable exports, contributing US$872 million (UGX 3.3 trillion) in the 2021/2022 financial year, according to the UCDA. 

The sector supports over 1.7 million households and employs a significant portion of the population. Any disruption to its structure could have far-reaching implications for the economy.

The proposed changes come at a time when Uganda is seeking to boost coffee production and quality to meet rising global demand. Some stakeholders worry that dismantling the UCDA’s established frameworks could hinder these efforts and erode the sector’s gains.