Minister of Finance, Matia Kasaija, expressed optimism during the signing ceremony on Wednesday at Speke Resort Munyonyo emphasizing that the scheme is a vital step in addressing the financial challenges faced by farmers.
“Today marks a significant milestone in our collective efforts to enhance agricultural productivity, improve food security, and strengthen the livelihoods of our commercial farmers,” Kasaija said, acknowledging that the agricultural sector is facing numerous challenges.
He noted that unpredictable weather, rising input costs, and limited access to technology have compounded difficulties for farmers, especially when it comes to accessing financial support. The new financing scheme, he explained, aims to eliminate one of the biggest barriers that has long hindered the growth of large-scale farming.
“Grain production is labour-intensive, requiring substantial investments in land preparation, seeds, fertilizers, irrigation, equipment, and more. But for too long, many farmers have faced barriers in accessing the capital they need to scale their operations, adopt modern technologies, and ensure consistent production,” he added.
The new scheme comes at a time when the government is doubling down on efforts to secure food and animal feed production. Kasaija highlighted the warning issued by the Ministry of Agriculture, Animal Industry, and Fisheries in May 2022 about the looming threat of food insecurity, urging for immediate action. In response, the government has approved a series of strategic interventions, including the provision of subsidized loans to private large-scale commercial farmers.
These loans will support the production of key crops such as maize, beans, soya beans, and sorghum, as well as animal feeds, across a proposed 114,661 acres of land.
“This Ministry has held several engagements with stakeholders to finalize this financing mechanism to support private large-scale commercial farmers to boost food and animal feed security in the country,” Kasaija shared, emphasizing the importance of collaboration with financial institutions such as Pride Microfinance, Post Bank, and Housing Finance to make this vision a reality.
The scheme, which is set to run for an initial period of six years, will provide a principal amount of Shs.176 billion, with the government covering an additional Shs.40 billion annually to support interest payments. This funding will enable farmers to access the necessary capital to purchase modern farming equipment, expand their land, and increase yields.
Underlining the long-term impact of the scheme, Kasaija remarked, “This is your opportunity to take your operations to the next level. With the right financial support, you can access better equipment, expand your land, and improve your yields.”
However, he also stressed that the scheme’s success hinges not just on funding but on the strategic partnership between the government, financial institutions, and farmers themselves.
The Permanent Secretary of the Ministry of Finance, Ramathan Ggoobi, echoed this sentiment, emphasizing that the scheme is a critical component of Uganda’s broader economic vision. “With the forthcoming transition to NDP IV, our target is increasing the share of agricultural exports from US$2.45 billion (35%) in FY 2024/25 to US$4.76 billion (48%) in 2029/30,” Ggoobi stated. “Maize, one of the commodities under this scheme, should contribute US$335.3 million.”
Ggoobi also reiterated the importance of agro-industrialization as a key anchor of Uganda’s growth strategy, intending to grow Uganda’s GDP from US$50 billion in FY2022/23 to US$500 billion by 2040. “The scheme will support the government’s Tenfold growth strategy, which aims to commercialize and formalize farming, leading to a fivefold growth of agro-industrial exports with an estimated value of US$20 billion,” he noted.
As Uganda continues to pursue its agricultural transformation agenda, the launch of the financing scheme is seen as a crucial step toward bridging the gap in funding for farmers and ensuring that the sector thrives sustainably.
“Together, we will work towards a future where Ugandan farmers are equipped with the tools, resources, and support they need to succeed and build a sustainable agricultural sector,” Ggoobi said, reaffirming the government’s unwavering commitment to empowering farmers and driving agro-industrialization.
Ministry of Agriculture FrankTumwebaze cautioned that the said the money is not for trading but production. “Minister of Agriculture, animal industry & fisheries, will share profiled large scale farmers with Ministry of Finance and the financial institutions in all districts of Uganda.”
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