Unlocking Agriculture Finance and Insurance in Uganda : The Financial Sector's Role in Agricultural Transformation
As a key pillar of the Ugandan economy, the agriculture sector is a critical driver of economic growth and poverty alleviation. Uganda's agricultural sector is dominated by smallholders with low levels of productivity. The agriculture sector i...
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| Format: | Policy Note |
| Language: | English |
| Published: |
World Bank, Washington, DC
2019
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| Online Access: | http://documents.worldbank.org/curated/en/186951566901268406/Unlocking-Agriculture-Finance-and-Insurance-in-Uganda-The-Financial-Sectors-Role-in-Agricultural-Transformation http://hdl.handle.net/10986/32332 |
| Summary: | As a key pillar of the Ugandan economy,
the agriculture sector is a critical driver of economic
growth and poverty alleviation. Uganda's agricultural
sector is dominated by smallholders with low levels of
productivity. The agriculture sector is highly exposed to
co-variant risks, which include weather, biological,
infrastructure (post-harvest loss), price, and market risks.
This plethora of risks suppresses appetite for investment in
the sector. Despite the sector's contribution to the
economy, farmers' access to finance remains a major
constraint. Recognizing agriculture finance's critical
role in the agricultural transformation agenda, the
government of Uganda (GoU) is supporting several initiatives
to unlock agricultural finance. To manage the financial
impacts of production shocks, the GoU seeks to use
agricultural insurance to derisk rural lending and expand
access to rural credit for smallholders. In partnership with
private insurance companies, the GoU launched the Uganda
Agriculture Insurance Scheme (UAIS) as a five-year pilot in
July 2016. The objectives of the scheme are to ensure that
Ugandan farmers are protected against the effects of
agriculture risks, especially production risks; to increase
farmers' access to credit; and to make crops,
livestock, and aquaculture insurance affordable to
smallholder producers. The UAIS offers a range of crop,
livestock, poultry, and aquaculture insurance coverage to
Ugandan farmers, and is promoted by the GoU through the
provision of premium subsidies. The objective of the review
is to provide recommendations for enhancing the scalability
and sustainability of the GoU's approach to promoting
agriculture insurance in Uganda. |
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