KAMPALA— In Uganda, farmers grow the nation’s food, drive rural economies, and form the largest share of the labour force—yet they are also among the most vulnerable. According to a new report by the Economic Policy Research Centre (EPRC), titled “Social Insurance for Farmers: Is a Contributory Social Insurance Scheme for Uganda’s Farmers Feasible?”, the people who produce the country’s most essential resource—food—are left out of the very systems meant to protect livelihoods from illness, old age, and financial shocks.
The irony is striking: while agriculture employs over 61 percent of the country’s workforce, just 0.8 percent of agricultural workers are enrolled in any retirement scheme, and only 1.2 percent have health insurance. Without these safety nets, farmers are often one illness, drought, or family funeral away from financial ruin.
The Cost of Being Left Behind
Imagine losing a harvest due to drought or falling sick during the planting season with no money for treatment. In the absence of formal protection, farmers are forced to sell livestock, take expensive loans, or even pull children out of school to cope. These desperate choices weaken households over time and entrench poverty across generations.
The EPRC’s April 2025 report paints a grim picture of exclusion—but it also offers ideas for change.
What’s Holding Farmers Back?
Uganda’s current legal framework simply wasn’t designed with informal workers in mind. Laws like the NSSF Act, the Pensions Act, and the Employment Act largely focus on formal employers and salaried workers. While a 2022 amendment allowed voluntary contributions from self-employed individuals, it hasn’t been put into practice—there are no clear systems to enforce or guide implementation.
Many farmers don’t qualify as “employees” under existing definitions. And without appropriate legal structures, agricultural buyers like tea or coffee factories can’t act as intermediaries to help collect and remit social insurance contributions. As a result, pension and health systems remain distant and inaccessible.
Monthly Payments Don’t Work on a Farmer’s Calendar
On average, an agricultural household earns just Shs 782,914 a year—about Shs 65,000 a month. That’s not enough to support regular pension contributions, especially in a sector where income is seasonal, unpredictable, and heavily tied to weather patterns.
Men earn more than women, largely because they own more land and grow cash crops. Income also rises with land size and livestock ownership. Any viable scheme must take these realities into account: expecting uniform, monthly contributions is both unfair and unworkable.
Could Farmers Pay Through Their Cooperatives?
One of the more exciting ideas in the report is to use cooperatives and buyers as intermediaries. These organizations already interact with farmers through contract farming and out-grower schemes. For instance, tea factories could deduct a small percentage of a farmer’s payment during harvest season and remit it toward social insurance.
This model has worked in places like Costa Rica, where cooperatives act as collection points for informal sector contributions, and in Ghana, where the government deducts 5 percent from cocoa sales for farmers’ pensions. In the Philippines, flexible contribution rates are offered to self-employed rural workers, while Sri Lanka allows farmers to make lump-sum payments once or twice a year.
Uganda’s Parish Development Model (PDM)—which is building organized SACCOs and digitized payment structures at the local level—could also be used to simplify collection and boost enrolment.
Why It’s Still So Hard
While the ideas are promising, turning them into reality won’t be easy.
Uganda still lacks low-cost digital systems suited for low-literacy rural users. Collecting contributions from individual farmers remains expensive: informal schemes spend nearly 25 percent of what they collect just to operate—double the cost of formal schemes like NSSF.
Financial literacy is low. Trust is even lower, especially among older farmers who’ve never interacted with formal insurance systems. Informal schemes like MAZIMA or KACITA exist, but they’re fragmented, poorly governed, and hard to scale.
Even if a good model is found, it would require changes in the law, better digital infrastructure, and political commitment to reach those who need it most.
Start Where It’s Easiest—Then Grow
The EPRC recommends beginning with organised, higher-income farmers—those in tea, banana, dairy, coffee, and sugarcane. These groups already receive regular income, belong to cooperatives, and could be used to test collection systems and trust-building mechanisms.
Incentives could also help. Farmers might be more willing to contribute if schemes offer short-term withdrawals during emergencies, matching contributions (as seen in Rwanda’s Ejoheza program), or family health benefits.
Legal updates are also crucial. Definitions of employment must change to reflect rural realities, and cooperative structures should be formally recognised in contribution models.
What’s at Stake
Failing to protect farmers has ripple effects across the entire economy. Without pensions or health insurance, rural Ugandans remain locked in cycles of poverty. Their productivity suffers, their children’s futures are limited, and national goals for inclusive growth remain unmet.
But the reverse is also true: building a farmer-friendly social insurance system could be one of Uganda’s most powerful tools for resilience, poverty reduction, and inclusive development.
As the EPRC puts it, “It is not about whether Uganda can afford to include farmers in social protection—it’s about whether Uganda can afford not to.”
The time to act is now.
