Growth and Performance of the Ugandan Dairy Sector: Elites, Conflict, and Bargaining

The dairy sector is one of the only agricultural sectors in Uganda that has enjoyed sustained high growth since the late 1980s. Milk and the cold dairy chain developed especially in the South-Western part of the country. Some farmers have since adopted improved breeds and better livestock management. However, the biggest percentage of the milk is sold unprocessed. This paper explains why this sector has experienced significant growth in the last decade. We argue that the dairy sector has relatively been successful in the South-Western region due to the involvement of the ruling elites who wanted to build a support base in their home area. In addition, the elites had special interest in dairy farming, since key elite members owned dairy cattle themselves hence have played key role in promoting the dairy sector. Liberalisation enhanced the competitiveness of the dairy sector business, which has since attracted a big number of middlemen including processors, leading to a significant increase in milk production. As milk production grew, there was need to regulate the sector. Regulation has been relatively successful and an agency called the Dairy Development Authority (DDA) established to promote efficiency in marketing of milk. With the existence of DDA, to a considerable extent there has been an improved organization of dairy farmers and traders and also the quality and safety of milk enhanced amidst conflicts.