Impacts of Covid-19 on the horticultural sector in Uganda

COLEACP’s surveys in the early months of the pandemic aimed to gather first-hand information on the impact of Covid-19 on operators of horticultural businesses, and assess how support from COLEACP and other partners could best be redirected as a response. These were not intended to be systematic surveys – respondents were self-selecting, and the operators taking part varying greatly in size and operation. But the results provide an illuminating qualitative snapshot of the key impacts of Covid-19 to date, and have been used to inform COLEACP’s and partner organisations’ priorities going forward.

Key points:

• 33% of respondents saw their orders reduced by more than 75%, 42% said orders were reduced by less than 50%, and 17% reported no impact.
• 70% of companies said cashflow challenges had affected their ability to cover overheads.
• 61% of respondents had employed fewer casual workers than usual, with 15% ceasing to employ them altogether due to the crisis.

In June, COLEACP conducted surveys to learn from our members and partners in the horticultural sector about the impacts of the current health and economic crisis throughout March–May.
The survey was carried out with the assistance of the Uganda Fruits and Vegetables Exporters and Producers Association (UFVEPA). Thirteen companies responded, and the main crops affected chillies, avocado, sweet potato and aubergine.

The markets affected by respondents are mainly international (EU and Middle East), with three companies reporting that local markets were also impacted. The majority reported reduced market demand, although two companies reported increased demand. The supply of fresh produce seemed not to be disturbed too much, but limited airfreight options, high cargo costs, disturbances to domestic logistics and limited market demand had a big negative impact.

Most companies reported reduced orders from existing supply contracts. 33% of respondents saw their orders reduced by more than 75%, and 8% by 50–75%. 42% saw orders reduced by less than 50%, and 17% reported no impact. Nine out of 13 companies reported big losses in revenue, but three companies had seen their revenue increase. There was no clear impact on prices, with about one third of respondents reporting increased prices and a quarter experiencing lower prices.

The majority of respondents (69%) were still identifying potential markets for their reduced market demand; some companies had begun processing produce. Many companies reported that produce went to waste, was sold at lower prices, was donated, dumped or used as manure in the garden. According to the respondents, no online sales platforms are available in Uganda for fruit and vegetables.

Cashflow challenges mostly affected the ability to cover overheads (70% of companies). Half of the respondents reported difficulties in covering payments to outgrowers, commitments to financial institutions (credit, loans, etc), and challenges in covering freight payments and inputs for new production cycles.

Half of the companies had taken no measures regarding permanent staff. Five companies had to lay off permanent staff (between 2 and 10 people per company), and four had reduced staff wages. Three companies had to close down the business. 61% of respondents had employed fewer casual workers than usual, with 15% ceasing to employ them altogether due to the crisis. Half of the companies reported that they were not able to guarantee a market for outgrowers, or were unable to pay them. 30% of the companies said that their outgrower base is scaling down the planting schedule. However, 20% of the companies reported an increased supply from outgrowers.

Companies did employ workforce protection measures (face masks; social distancing measures; etc.) and implement WHO recommendations at packhouse and production levels. Almost all companies extended these good practices to outgrowers.
Most of the companies reported receiving no support from the government. The only support mentioned was clearing of consignments and field inspections.

Suggestions for support include regular updates on export guidelines and market requirements; lobbying for access to finance; information on access to markets and facilitation of market linkages; technical training and digital learning.