With government funding under pressure and donor support declining, Uganda’s agricultural research agency wants to generate more income from its factories, machinery and other facilities.
For years, Uganda has invested billions of shillings in agricultural research facilities designed to develop better seeds, improve livestock production and help farmers increase their yields. But some of these facilities can do much more than serve research needs.
Now, the National Agricultural Research Organization (NARO) wants private investors to help turn that unused capacity into income, opening a new chapter in how Uganda finances agricultural research.
The proposal could see private companies working with NARO to commercially operate dairy processing plants, animal feed mills, garages and accommodation facilities, generating revenue that would help sustain research while contributing to the national economy.
At stake is a question facing many publicly funded institutions: how can they earn more from existing investments without abandoning the public services they were established to provide?
NARO Director General Dr Yona Baguma raised the issue during a top management meeting at Speke Resort Munyonyo on Wednesday, where officials reviewed project concept notes and feasibility studies for potential public-private partnerships (PPPs).
“NARO has several facilities whose capacity we need to harness to generate revenue for sustainable agricultural research and also make a contribution to the national coffers,” Baguma said.
Under the proposed arrangements, private investors would contribute financing, technology, expertise and management capabilities to help NARO make better commercial use of its existing infrastructure.
The organization hopes the partnerships will create additional income streams while allowing its scientists to continue developing technologies and innovations for Uganda’s agricultural sector.
Facilities targeted for commercialization
The identified facilities include the dairy processing plant and livestock feed mill at the National Livestock Resources Research Institute (NaLIRRI), and the fish feed mill at the National Fisheries Resources Research Institute (NaFIRRI) in Kajjansi.
Others include the feed sorting facility at Mbarara Zonal Agricultural Research and Development Institute, and automotive garages at the National Semi-arid Resources Research Institute (NaSARRI), NaLIRRI and the National Crops Resources Research Institute (NaCRRI).
Hostel facilities at NaFIRRI in Jinja and Mukono Zonal Agricultural Research and Development Institute are also being considered.
The idea is to make better use of equipment and infrastructure that may not be required continuously for scientific research.
For example, a feed mill might operate for limited periods to support research trials. Under a commercial partnership, its additional production capacity could potentially be used to manufacture animal feed for the wider market.
Such arrangements could create income for NARO while making greater use of machinery already acquired through public investment.
However, the proposed projects remain at the assessment stage, and the organization has not disclosed how much revenue it expects them to generate.
Why NARO needs more money
Although the government remains NARO’s principal funder, Baguma said declining development partner support has made it necessary to diversify the organization’s income sources.
He acknowledged that government funding had increased substantially over the past decade, with NARO’s annual budget rising from Shs 61 billion to Shs 223 billion.
That represents an increase of Shs 162 billion, or approximately 266 per cent.
Nevertheless, Baguma argued that additional financing is necessary to sustain agricultural research and make better use of existing investments.
“Over the last 30 years, we have done a lot as NARO, but we must continue finding ways of securing resources for sustainable research. We need to add value to the facilities we have and make them work for us,” he said.
NARO already has experience generating income from its scientific innovations.
According to Baguma, licensing improved crop varieties to private seed companies now generates more than Shs 1 billion.
He also cited NARO’s seed hubs, particularly the coffee seed hub, which produced products valued at more than Shs 20 billion during the last financial year.
Separately, investment in an anti-tick vaccine manufacturing facility has resulted in vaccine stock valued at more than Shs 20 billion.
These figures demonstrate the potential commercial value of agricultural research, although the reported values of seed products and vaccine stocks should not be confused with money already earned from sales.
The significance lies in whether commercially developed innovations become more widely available and affordable for farmers.
“These investments are intended to make NARO more self-sustaining. We must invest our brains and make the right decisions,” Baguma said.
Government backs alternative financing
Jim Mugunga, executive director of the Public-Private Partnership Unit at the Ministry of Finance, Planning and Economic Development, welcomed NARO’s approach.
He said increasing demands on government resources made it necessary for public institutions to seek alternative financing arrangements.
“No country can fund everything it needs to do entirely through its national budget. Government has therefore been encouraging institutions to identify opportunities where private sector partnerships can bring in the strength, technology, innovation and financial resources needed to expand service delivery,” Mugunga said.
He argued that research institutions could generate commercial returns from facilities without compromising their scientific responsibilities.
Mugunga cited feed processing equipment and improved pasture production as examples of activities where commercial demand could exceed the quantities required for research.
He also linked the initiative to the government’s Tenfold Growth Strategy and Parish Development Model, which seek to increase economic activity and improve household incomes.
The PPP Unit pledged to work with the Ministry of Finance, Operation Wealth Creation and the Ministry of Agriculture, Animal Industry and Fisheries to develop viable partnerships.
The next step will be to determine which proposed investments are commercially feasible and how the partnerships should be structured.