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The Oil Palm Development Project is a public private partnership between the Government of Uganda, The International Fund for Agricultural Development (IFAD) and the private sector, specifically Oil Palm Uganda Limited (OPUL) and smallholder farmers. To link the farmers to OPUL, the Kalangala Oil Palm Growers Trust was set up, to work as an intermediary with OPUL, on behalf of the smallholder farmers and to provide technical support for smallholder oil palm development and financing.

Oil Palm Development Advance Financing Facility:

  • The oil palm farmers obtain from the project start up loans to enable them clear the land, pay for labour and follow set guidelines when planting and looking after their gardens.
  • The farmers are given a flexible period of 8 to 10 years over which to pay off the loans.
  • Loan repayments begin only when the farmer has started harvesting (i.e. 5 years after initial planting).
  • In Kalangala, initial planting started in 2005 and the farmers started harvesting in 2009/2010.
  • The project’s private sector partner Oil Palm Uganda Limited (OPUL) provides a ready market for the farmers who earn a price based on a formula that takes into account world prices so that the farmer proportionately gains when there is a rise in world prices.
  • 33% is deducted from the financial value of the sale of oil palm fruits until the loan is paid off.
  • The farmer therefore earns 67% of their net oil palm fruit sales until after loan repayment is completed, after which they will earn 100% for the rest of the oil palm trees’ 25 years of harvesting.
  • So far, none of the farmers registered with us has sold their land due to failure to re-pay the loan.
Land for Oil Palm Development:
  • The Government of Uganda avails land to the private sector partner, OPUL free of any encumbrances, on a lease basis. The government purchases the land from Mailo land owners on a willing buyer willing seller basis at a negotiated price.
  • If there are any squatters on the land, the land owner compensates them before the land is handed over to OPUL.
  • Where it is not possible for the occupants/community to leave the land in question, that specific piece of the land is then not utilised for the oil palm development, but left to benefit the community. Such cases have been handled in Bwendero, Mulabana, Kasekulo and Bumangi.
Environmental Protection:
  • Before the investment by OPUL started in December 2004, three Environmental Assessments were carried out, and the National Environment Management Authority (NEMA) issued a certificate for the investment, along with the environmental conditions which must be complied with;-
  • An Environmental Impact Management System (IMS) committee composed of one representative each from MAAIF, NEMA, OPUL, KOPGT, NFA, Kalangala District Local Government, PMA Donor sub-group, and a reputable national NGO is charged with ensuring compliance to these conditions.
  • All the stakeholders of the oil palm project are fully aware of the importance of the environment in Kalangala, especially the 200 metres lake environmental buffer zone and the need to conserve soil and water resources. Deliberate effort has been taken to increase their environmental awareness.
  • Before any oil palm is planted by the farmers or the nucleus plantation, suitability of the land is assessed to ensure the lake buffer zone, wetlands, cultural sites and other such areas are protected.
  • The private investor, OPUL has carried out enrichment planting of some of the 200 meter lake buffer areas that had been degraded by lumbering and charcoal burning. There are also joint efforts between the local Government and OPUL to police the lake buffer zone.
  • The Environmental Impact Management System has not registered any abnormalities in both the aquatic and human life in and around Kalangala district.
  • Fertilizers are applied to the oil palm trees in a circumference around the base of the tree (because of the high cost of fertilizer) and only the quantity required is applied. Given the limited amount and ways of applying fertilizer, and the 200 metre lake protective border, water quality tests done by NARO scientists at Kawanda confirm that no fertilizer is finding its way into the lake.
Tourism development:
  • Since 2004 the number of hotels on the island has increased from 5 to 20 today. This is as a result of the improved ferry service to Bugala Island. None of the gazetted forest reserves have been degazetted for oil palm growing. Protected forest areas are better preserved than they were 10 years ago, because with income from oil palm farmers are turning away from activities which mine natural resources, such as charcoal burning and wood extraction.
Oil palm growing has proved to be a profitable enterprise for the farmers that have taken it up and the project is unable to fulfill the very high demand from farmers wanting to join the enterprise as out-growers and smallholder farmers.In May this year on a visit to Kalangala District the President of IFAD and the Minister of Agriculture Animal Industry and Fisheries were not only informed by the LC5 Chairperson of Kalangala District and the Chairperson of the oil palm farmers Association but were able to see first hand and acknowledge that the oil palm development project has greatly improved the economy of Kalangala District.According to the UNDP Human Development Index for Uganda, in 2000, Kalangala was ranked the 71st poorest district in Uganda, out of 76. By 2007, Kalangala had improved to 7th position, which confirmed the tremendous livelihood benefits which have been brought to the entire district by oil palm development, even before harvesting started. Oil palm development has improved farm incomes and oil palm farmers are now able to improve their houses and send their children to school, while also saving in island SACCOs.
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