#sfrome Challenges and Opportunities of engaging in a private-public partnership: The Oil Palm experience (69)

By Marieclaire Colaiacomo

The Vegetable Oil Palm Project in Uganda is now in its second phase and it is always fascinating to get a feel for just how far IFAD has stretched to touch the rural poor. This is the largest public-private partnership IFAD has ever seen and the most successful to date. Marian Bradley, CPM for UGANDA at IFAD guided us through a visual presentation today which was nothing short of spectacular.

Once importers of palm oil from Malaysia over 8000 km away, Uganda with the aid of BIDCO (private oil company) and the brokerage of IFAD who provided the financing, introduced oil palm on the island of Bugala through a unique public private partnership. IFAD acted as facilitator and mediator to ensure that the interests of the Borrower and smallholders were protected in this tripartite agreement between the Government, the private sector and farmers. It wasn’t easy Marian tells us. And the first phase was very challenging, the results have enticed smallholders who have seen their incomes increased threefold since starting to cultivate oil palm and now for the second phase farmers are anxious to join the project.

An international effort. Seedlings are imported from Costa Rica, expertise from Malaysia with financing from the private sector and IFAD – a perfect combination based on a technically solid and economically safe investment.

Establishing of the farmers trust has taken time, and there have been many field level technical challenges, like termite hills, poor soil fertility and micro-nutrient deficiencies and fertilizer scarcity at times!

How did IFAD manage? Through the establishment of a Trust that guaranteed smallholders the required protection and calculation of a fair market price for their produce. Farmers now have bank accounts, can cover their medical expenses and send their children to school!

IFAD and the way forward. To create opportunities for smallholders we need to create trust and linkages with Governments and private sector and we can only achieve this if we understand the industry we wish to operate in and the specific socio-economic and political context we find country-by-country.