Ministry of Agriculture, Animal Industry and Fisheries (Uganda), in partnership with Equity Bank (Uganda), has disbursed Shs 1.2 billion to oil palm farmers’ associations in Mayuge District, Bugiri District, and Namayingo District to support smallholder farmers under the National Oil Palm Project (NOPP).
The cheque was officially handed over during the project launch at Ikulwe Demonstration Farm in Mayuge. The initiative is funded through the International Fund for Agricultural Development, with Equity Bank acting as the fund manager.
The project targets smallholder farmers with land holdings of between one and two hectares. Beneficiaries with one hectare receive Shs 12.5 million, while those with two hectares receive double. The loan carries a 10% interest rate, payable over 10 years, with a four-year grace period before repayment begins to allow trees to mature.
Once repayments start, the bank will deduct 33% of monthly income from farmers’ oil palm gardens, leaving them 67% to meet household needs.
Catherine Psomgen, Equity Bank’s Director of Public Sector and Social Investments, said over Shs 1.235 billion has been extended to 896 farmers across the three districts in the last two years.
“We use modern banking systems to verify and ensure funds reach the rightful oil palm farmers promptly,” Psomgen said. “This enables them to weed their gardens, access seedlings and fertilizers, and ensure quality yields for better earnings.”
She added that farmers are also trained in financial literacy to help them use the funds strictly for oil palm production and avoid diverting resources to non-project activities.
Matia Byanuka, one of the beneficiaries, said the government support came at a critical time, as oil palm growing is expensive.
“I’ve already planted my two-hectare garden and look forward to harvesting in four years,” he said. “This support has turned my plan into a reality.”
Another farmer, Ali Stabilo, received Shs 2.5 million for bush clearing and said his garden is now ready for planting. At 64 years old and guardian to seven grandchildren, Ali believes oil palm farming will transform his household income.
“Previously, food crops and sugarcane farming gave me low returns,” he explained. “But with oil palm, I expect to earn about Shs 2 million monthly. This will help educate my grandchildren and secure a better future for them.”
Ali has dedicated five acres of land to oil palm and reserved three acres for food crops after undergoing two years of training with agricultural extension workers.
The National Oil Palm Project aims to promote commercial agriculture, improve household incomes, and boost the national oil palm industry through smallholder farmers. The government hopes that increased investment in oil palm farming will reduce dependence on imported edible oils, create jobs, and strengthen rural economies.
With hundreds of farmers benefiting from the initial disbursement, officials say more funding is expected to be released in the coming months to expand the project’s reach.
