Case studies of lead firm governance systems in the context commercialization of smallholder agriculture in Uganda

Abstract

[INTRODUCTION] The study is set in the context of: (a) overall weak farmer-buyer relations in most parts of Uganda’s agro-sector which affect the development prospects of small holder farmers (SHFs), and (b) a growing interest by the private and public sector, including the Government of Uganda (GOU) and development agencies in the contribution of value chain (VC) analysis and support interventions to economic development in the country. This study analyzes the governance of domestic value chains (DVCs) in the agricultural sector in Uganda. It focuses at exploring how agricultural produce buyers set up, coordinate and monitor - that is govern - the DVCs with their supplying farmers. Particularly how buyers govern the latter’s activities and performance and thus the division of labour in the DVC. Governance in this context constitutes for instance: (i) setting the requirements for farmers in terms of product quantity, quality and delivery, or production processes, (ii) monitoring compliance, and (iii) assisting farmers to meet the set requirements. This study focuses on such governance systems of various buyers which operate a DVC with SHFs. The buyers are called lead firms (LFs) of the DVC. The research was concerned with: the rationale and functioning of the business relation between the LF and SHFs, related benefits and costs as well as lessons-learnt, farmers’ upgrading as well as opportunities and challenges which will have to be addressed by the VC actors or call for assistance from for instance GOU and respective support institutions