To grow global coffee share, Uganda must reorganise through cooperatives
In 2024, Uganda’s coffee exports totalled US$ 1.63 billion, representing roughly 2.16 percent of global coffee exports, which stood at US$ 75.55 billion
By Aggrey Ategyeka
BUSHENYI, April 22, 2026 — Uganda’s coffee sector is not merely an agricultural activity. It is a strategic pillar of the national economy. Coffee remains one of the country’s leading export commodities, contributing between 20 and 30 percent of total export earnings and supporting millions of households. In recent years, export revenues have significantly increased due to improved global prices and volumes, demonstrating the sector’s immense potential. However, despite this growth, the ordinary Ugandan farmer continues to earn relatively little from coffee compared to the final export value.
In 2024, Uganda’s coffee exports totalled US$ 1.63 billion, representing roughly 2.16 percent of global coffee exports, which stood at US$ 75.55 billion. This positions the country as a modest but significant African supplier in the world market. More notably, coffee accounted for about 20.3 percent of Uganda’s total exports, which reached US$ 8.04 billion. This underscores its role as a critical source of foreign exchange and rural livelihoods. While this concentration highlights Uganda’s reliance on a single agricultural commodity, exposing it to price volatility and climate risks, it also signals room for growth through value addition, quality improvements, and market diversification to increase its global market share beyond 2 percent.
One of the fundamental challenges lies in the structure of the coffee value chain. Smallholder farmers dominate production, operating individually with limited bargaining power, poor access to markets, and minimal control over pricing. Meanwhile, a few large exporting firms capture a significant share of the value. This imbalance raises an important question in international trade: does firm size affect export performance?
Evidence from global trade theory confirms that firm size matters. Larger firms are more likely to export because they benefit from economies of scale, better access to finance, improved technology, and the ability to meet international standards. In Uganda, this is evident where a small number of exporters dominate the coffee export market. However, replacing smallholder farmers with large firms is neither practical nor desirable. Instead, the solution lies in aggregation: bringing farmers together into strong, functional cooperatives.
Cooperatives provide a mechanism through which small farmers can collectively operate as a large firm. By organising into production and marketing cooperatives, farmers can bulk their coffee, standardize quality, and negotiate better prices. This collective approach enhances their competitiveness in international markets while ensuring that value remains within rural communities.
Beyond aggregation, cooperatives are essential for value addition. Uganda largely exports raw or semi processed coffee, which fetches lower prices on the global market. Yet international buyers, particularly in specialty markets, demand high quality coffee characterised by large bean size, higher weight, uniformity, and proper moisture content. These quality attributes are not accidental. They result from good agronomic practices, proper harvesting, and professional processing.
For example, larger and denser coffee beans are preferred because they roast more evenly and produce better flavour profiles. Achieving such quality requires coordinated efforts in production, harvesting, and post-harvest handling. These tasks are difficult for individual farmers but feasible within cooperative systems. Through shared investments in processing facilities such as washing stations, drying yards, and storage infrastructure, cooperatives can significantly improve the quality and value of coffee.
The role of regulation is equally critical. The Ministry of Agriculture, Animal Industry and Fisheries [MAAIF] through its former Uganda Coffee Development Authority [UCDA] has played a significant role in improving coffee quality and export performance through standards enforcement and market development. With ongoing institutional rationalisation, there is an opportunity to strengthen coordination between regulatory bodies and producer organisations. In this arrangement, the ministry can focus on quality assurance, certification, and market access, while cooperatives handle production, bulking, and primary processing through its extension workers and establish support clinics across the country.
This integrated value chain approach, linking farmers, cooperatives, processors, and exporters, can transform Uganda’s coffee sector. It ensures traceability, enhances quality control, and positions Ugandan coffee competitively in premium international markets. Moreover, it contributes to the formalization of rural enterprises, as cooperative structures promote registration, compliance, and access to financial and technical support.
Policy direction must therefore shift deliberately towards strengthening cooperative based production systems. Government programmes such as the Parish Development Model, which currently emphasise financial inclusion through Parish Development Model Savings and Credit Cooperative Organisations [PDM SACCOs] under pillar three, should be leveraged to support production and marketing cooperatives. Investments in infrastructure, capacity building, and governance systems are essential to ensure that cooperatives are effective and sustainable. The production and marketing committees under PDM pillar one must be made functional and active. Furthermore, agricultural insurance deserves urgent attention.
However, it is important to acknowledge the risks. Many cooperatives in the past have failed due to weak governance, mismanagement, and political interference. Addressing these challenges requires strong accountability mechanisms, regular audits, and continuous training of cooperative leaders. Transparency and member participation must be at the core of cooperative operations.
Thus, Uganda’s coffee sector holds enormous potential to drive economic growth, increase export earnings, and improve rural livelihoods. However, unlocking this potential requires a shift from fragmented individual production to organized collective enterprise. Firm size matters in exports, but Uganda can achieve scale not by replacing farmers, but by organising them into strong cooperatives.
With effective regulation, improved quality standards, and coordinated value chain development, Uganda can transition from a low value exporter of raw coffee to a high value global coffee brand. The future of Uganda’s coffee lies not in isolated efforts, but in the strength of collective action.
The writer is writer is student of International Trade Policy and Trade Law and a Principal Commercial Officer for Bushenyi-Ishaka Municipal Council.
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