Commodity Revenue Management: Coffee and Cotton in Uganda

The document examines Uganda's shift from a state-monopolized commodity system to a liberalized market for coffee and cotton. It details the impact of price volatility and political instability on smallholder farmers, the role of the Coffee Marketing Board and Lint Marketing Board, and the subsequent adoption of diversification, vertical integration, and risk management tools like warehouse receipts and commodity exchanges to stabilize rural incomes.

• Uganda's dependence on coffee as a primary export source decreased significantly from over 95% in the 1980s to approximately 20% by 2006, as the country diversified into non-traditional exports such as fish, maize, and beans.
• The liberalization of the coffee and cotton sectors significantly increased the share of market value received by farmers; coffee farmers' share of the free on rail/truck price rose from 20% before liberalization to as high as 85% at its peak, while cotton growers' share increased from 12% in 1983 to over 60%.
• Coffee wilt disease has severely impacted Ugandan production, causing an estimated 45% reduction in the crop and killing approximately 14 million trees, resulting in an annual export revenue loss of US$42.8 million based on 2003–04 prices.
• Uganda has pursued vertical integration to capture higher value from its commodities, such as exporting organic cotton clothing to the U.S. under the African Growth and Opportunity Act (AGOA) and selling branded 'Good African Coffee' in U.K. supermarkets.
• To manage price volatility, some cotton cooperatives, including the Lango Cooperative Union and North Bukedi Cotton Company, have utilized futures and options markets and currency forward rates, although the New York Board of Trade is noted as an ineffective hedging mechanism for non-U.S. cotton.
• The Ugandan government implemented the Strategic Export Programme (SEP) between 2001 and 2004, investing over 70 billion Uganda shillings (approx. US$40 million) to stimulate value-adding investments, including wet-processing facilities for coffee and de-linting machines for cotton.
• Uganda utilized the European Union's Stabex compensatory finance scheme to stabilize export earnings, receiving €175 million in payments across 1990, 1991, 1993, 1995, and 1999, though it has not yet qualified for the subsequent FLEX scheme.

APA

Masiga, M., & Ruhweza, A. (2007). Commodity Revenue Management: Coffee and Cotton in Uganda. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/trade_price_case_coffee_cotton.pdf

Chicago

Masiga, Moses, and Alice Ruhweza. Commodity Revenue Management: Coffee and Cotton in Uganda. International Institute for Sustainable Development, 2007. https://www.iisd.org/system/files/publications/trade_price_case_coffee_cotton.pdf.

Wikipedia

{{cite report |last1=Masiga |first1=Moses |last2=Ruhweza |first2=Alice |title=Commodity Revenue Management: Coffee and Cotton in Uganda |publisher=International Institute for Sustainable Development |date=May 2007 |url=https://www.iisd.org/system/files/publications/trade_price_case_coffee_cotton.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{masiga2007commodity, author = {Masiga, Moses and Ruhweza, Alice}, title = {{Commodity Revenue Management: Coffee and Cotton in Uganda}}, institution = {International Institute for Sustainable Development}, year = {2007}, month = may, url = {https://www.iisd.org/system/files/publications/trade_price_case_coffee_cotton.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }