Lessons learned and recommendations for future developments of oil palm in Kalangala and Buvuma, Uganda

Lessons learned and recommendations for future developments of oil palm in Kalangala and Buvuma, Uganda

Uganda - 24 July, 2019

The Government of Uganda had the best intentions when oil palm was established. The aim was to reduce poverty among the Lake Victoria island populations of Kalangala and Buvuma districts, and contribute to import substitution through domestic production of palm oil. However, the implementation strategy fell short on a number of aspects, leading to multiple negative impacts on the intended beneficiaries as well as on the environment. It is thus crucial to acknowledge and better understand these impacts, mitigate them, and prevent their reoccurrence in the other suggested oil palm expansion hubs.

Since the time oil palm harvests started in 2010, experiences showed that increased production of oil palm benefited the national economy through import substitution and associated foreign exchange savings, with many associated local economic benefits. However, another side of the story also became apparent, of negative impacts.

The forested landscapes have not survived the harshness of oil palm. On Bugala island in Kalangala, the area of fully stocked tropical high forests declined from 58% to 20% since the year 2000, while oil palm increased from 0% to 28% over the same period. In Buvuma the situation is different, with mainly subsistence farmland acquired for oil palm plantations.

The oil palm production has negatively impacted agriculture and fisheries, which were (in Kalangala) or still are (in Buvuma) the backbone of rural livelihoods. This has had serious implications on local communities and consequences for sensitive ecosystems, and resulting in food insecurity, for example in Kalangala where food is now imported from the mainland. If Buvuma is to meet the projected land requirements, the current area under agriculture will be reduced by 50%, which will contribute to poverty and food insecurity and cause migration.

Migration in itself brings in social injustices. For example, in Kalangala, the mis-match between the provision of social services such as health, water and sanitation and the increasing population became obvious. Already, the migration of mainly men between the islands and the mainland and increased income, and the parallel increase in prostitution has exuberated the wrath of HIV/AIDS. In Buvuma there has already been major changes in the population due to land acquisition, even before any plantations have been established. Large out-migrations have already happened, while newcomers arrive in search of new opportunities.

The out migrations happened as a result of rushed land acquisition process, and yet land is key resource in production. At least 80% of landlords in Kalangala who sold their land did not do so under conditions of free, prior and informed consent, while in Buvuma, the Uganda Land Commission skipped some required processes in land acquisition, and compensated squatters on public land without first taking the necessary steps.

As a result, women, youth and the elderly have been displaced during land acquisition and further marginalised. Currently, Oil Palm Uganda Limited (OPUL) employs about 1300 staff (35% female) in Kalangala but only 7% are natives to the district, and of the registered 1,810 oil palm outgrowers, only 37% are female and they have smaller landholdings compared to men.

This comes as a result of investment policy that looks at financing only one crop over others. Such selective financing priority is discriminatory. Oil palm is not always the best or only option to improve household incomes for the majority of farmers. The results of gross margin analysis for crop enterprises showed that cassava, beans, sweet potatoes, rice and coffee would also be viable alternatives in Buvuma, while in Kalangala, oil palm competes with passion fruit, tomato and coffee as high value alternatives. These ought to have been considered in crop alternatives in addition to investments in non-crop alternatives. Additionally, the provision of government finance through short term loans makes smallholder farmers more vulnerable to the sole private sector player.

The current outgrower model does not allow for alternative food crops and intercropping, making it difficult to diversify farming and income options. Therefore, the economic forecasts show that oil palm is profitable to both the single company and the smallholder, but only in the short term. Projections in the medium and long-term reveal declines in economic returns to smallholder farmers as ecosystem services are lost, alongside growing demands to ensure food security as the area of land available for growing food crops becomes limiting.

Following these findings and lessons, some key recommendations to the government and implementing partners are:

  1. Strict adherence to Environmental and Social Impact Assessment recommendations, to avert negative impacts;
  2. Implementing effective land use plans;
  3. Implementing financing investment options that emphasize diversity of alternatives;
  4. Ensuring legal representation to those living on the land, and prompt issuance of certificates of occupancy by relevant government agencies;
  5. Implementing an effective communication strategy and
  6. Conducting a comprehensive Gender Impact Assessment prior to investment of such a huge magnitude.

The lessons and recommendations presented here are the result of a study commissioned by Tropenbos International together with Ecological Trends Alliance to build knowledge and provide an increased understanding regarding the impacts of oil palm expansion on the environment and local livelihoods, and from this, draw out the implications and offer recommendations for future developments. The results have been collected in a report that presents five research papers and summarized in separate policy briefs.