kalangala
Kalangala district is located in southern central Uganda and is comprised of a series of islands situated on Lake Victoria. The estimated population in 2016 was 56,900 individuals, with the majority of residents located on Bugala Island, the largest island accounting for 63.2 per cent of total dry land in the district. Historically, the primary income-generating activities on the islands have consisted of fishing, tourism, and agriculture. Since the inception of the oil palm project in 2005, in the form of a private-public partnership between the government of Uganda and BIDCO Uganda Limited (operating as Oil Palm Uganda Limited, or OPUL), cultivation of oil palm has steadily become a key economic activity within the district. Under the umbrella of the VDOP, the promotion of oil palm production has been seen as a strategic effort to address high poverty rates and reduce Uganda’s dependency on oil imports 2 fishing. A 1% (108.7 acre) expansion in oil palm plantations raises total cash income in Kalangala by 242 million UGX and total real income by 210.1 million UGX. A 10% increase in oil palm productivity increases total cash income in Kalangala by nearly 5 billion UGX annually, with nearly half of the income gain going to non-oil-palm-producing households.
Our simulations reveal that the entire Kalangala economy is now vulnerable to oil palm price shocks. Market linkages magnify the impacts of both positive and negative price shocks. Positive price shocks stimulate production, employment, and incomes throughout Kalangala. Negative shocks, on the other hand, have a disproportionately large negative impact on local incomes. Both positive and negative price shocks affect employment much more in non-palm-producing households than in palm farmer or palm worker households. This analysis underlines the importance of using an economy-wide approach to evaluate the impacts of development programs. The relative geographical isolation of Kalangala District helps shape the local economic impacts of oil palm. Barriers to trade, including reliance on ferries and long transportation times, effectively trap a good proportion of the economic spillover effects of palm development in Kalangala. Virtually all wages paid and most household purchases are within the local economy of Kalangala. This helps explain why the impacts on total Kalangala income far exceed the direct benefits of the project.
Kalangala district is located in southern central Uganda and is comprised of a series of islands situated on Lake Victoria. The estimated population in 2016 was 56,900 individuals, with the vast majority of residents located on Bugala Island, the largest island accounting for 63.2 percent of total dry land in the district. Historically, the primary income-generating activities on the islands have consisted of fishing, tourism, and agriculture. Since the inception of the oil palm project in 2005, in the form of a private-public partnership between the government of Uganda and BIDCO Uganda Limited (operating as Oil Palm Uganda Limited, or OPUL), cultivation of oil palm has steadily become a key economic activity within the district. Under the umbrella of the VDOP, promotion of oil palm production has been seen as a strategic effort to address high poverty rates and reduce Uganda’s dependency on oil imports by increasing domestic production. At the time of the survey, roughly 10,000 hectares of palm oil had been planted, with 6,500 hectares operated by OPUL in the form of a nucleus estate. The remaining 3,500 hectares belong to 1,800 individual smallholders whom sell their fresh fruit bunches (FFBs) to one of two local mills operated by OPUL. As part of the project, the government of Uganda and IFAD established the KOPGT, which enables farmers to access credit; current loans total 13 million USD to smallholder growers.
In addition to loans and extension services, KOPGT also acts as an intermediary between smallholders and OPUL by collecting FFBs from individual farmers and processing payments. It is evident that the livelihoods of local residents have been transformed as a result of the oil palm project. While the number of smallholder growers is relatively small, oil palm production and processing activities provide jobs for more than 3,000 workers, including employment with plantations, mills, and refining. Previous surveys indicate that the largest source of income on Bugala Island was the sale of palm oil, at 30% of total income (MOA, 2017). In addition, the project has drastically improved transportation and utility services on Bugala Island, developing over 250 kilometers of roads and providing continuous electricity to the majority of villages.