Sustainable transformation of Uganda’s palm oil sector

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OPINION

By Alex Amanya

For years, palm oil production in Uganda has been mired in controversy. Early implementation efforts in Kalangala raised public concerns about environmental degradation, particularly deforestation and ecosystem disruption.

To this day, the term "oil palm" evokes mixed reactions across Uganda, largely due to those early missteps. But times have changed, and so must our perception.

The National Oil Palm Project (NOPP), now taking root in districts such as Buvuma, Mayuge, Kyotera, Mukono, and Buikwe, offers a compelling case for reimagining palm oil as a force for good. With environmental sustainability, smallholder empowerment, and inclusive development at its core, NOPP is fast becoming a model for how to develop high-risk agricultural value chains responsibly.

Crucially, NOPP was designed with the benefit of hindsight. It incorporates lessons from previous initiatives under the Vegetable Oil Development Projects (VODP1 and VODP2), integrating robust environmental and social safeguards. These include compliance with the International Fund for Agricultural Development’s (IFAD) Social, Environmental, and Climate Assessment Procedures (SECAP) and mandatory Environmental and Social Impact Assessments (ESIAs) approved by the National Environment Management Authority (NEMA).

This structured approach ensures potential risks are identified and addressed early. More importantly, sustainability frameworks such as the Roundtable on Sustainable Palm Oil (RSPO) and Best Management Practices (BMPs) have been adopted, signaling a shift from exploitation to restoration.

Already, over 500 hectares of degraded land have been rehabilitated under NOPP, with carbon assessments showing potential sequestration of more than 26,000 tCO₂eq annually. This opens the door for innovative carbon incentive schemes that reward communities for ecosystem conservation.

Beyond environmental safeguards, the most transformative feature of NOPP lies in its unwavering focus on smallholder inclusion. The project supports over 9,000 smallholder farmers, providing access to quality seedlings and extension services through IFAD-backed pre-financing with no upfront cost. The results are compelling: yields of 14–18 tons per hectare and annual incomes of up to shillings 13 million. For communities along the Lake Victoria crescent, oil palm is not only a profitable venture, but it’s a pathway to financial dignity.

Farmers are organised into more than 10 cooperatives, enabling collective bargaining, stronger market positioning, and inclusive decision-making, especially around pricing and resource allocation. The sector's standout innovation is its consultative farm-gate pricing mechanism. Rather than being dictated by processors, prices, currently shillings 858 per kilogram, are determined transparently by a multi-stakeholder committee including farmers, government agencies, processors, and civil society. This model fosters fairness and ownership across the value chain.

NOPP’s impact also extends to rural infrastructure. Over 85 kilometres of feeder roads have been constructed, and ferry services enhanced, connecting isolated communities like Buvuma to economic hubs. Improved accessibility has not only boosted farmer incomes but also enhanced service delivery and market access.

Still, challenges remain. Uganda lacks a comprehensive national policy to regulate the palm oil sector. This regulatory vacuum could expose the industry to risks as it scales. Yet, the structured, participatory coordination under NOPP has kept the sector thriving even in the absence of formal national regulation. It’s a testament to the power of inclusive governance and stakeholder alignment.

Other cash crop sectors like tea and sugarcane can draw lessons from NOPP. These historically entrenched industries often suffer from disorganisation and weak farmer integration. NOPP’s example shows what’s possible when a value chain is intentionally designed for equity, transparency, and sustainability.

Uganda stands at a crossroads. As climate change, rural poverty, and economic recovery dominate national priorities, we must embrace models that deliver a holistic impact. The National Oil Palm Project is not perfect, but it is proof that environmentally sensitive sectors can be reformed for the greater good.

The time has come to move beyond the stigma of past failures. With improved safeguards, farmer-centred support, and transparent systems, oil palm can drive rural prosperity and environmental regeneration. It also presents a powerful case for import substitution: Uganda currently spends over $300 million annually importing crude and refined palm oil. By strengthening local production, we can reclaim economic sovereignty.

To government agencies, civil society, investors, and environmental advocates: take a second look at Uganda’s palm oil sector. The transformation underway through NOPP is not just about palm oil, it is a good example and a blueprint for how sectors with high environmental and reputational risks can be sustainably developed in a manner that ensures social, economic and environmental sustainability for rural transformation, inclusive and national development. Notwithstanding, the national policy for the sector also needs to be finalised with key learnings from the implementation of the National Oil Palm Project embedded therein.

The writer is the Country Manager, Solidaridad Uganda Country Office