A History of Ugandan Coffee: Between State and Market

In the 1970s, getting coffee out of Uganda could cost you your life. Idi Amin declared coffee smuggling treason, punishable by firing squad, and some smugglers were executed (The Continent). Even so, about a quarter of the crop slipped across the borders, where it sold for far more than the state would pay.

Those smuggled sacks say a lot about Ugandan coffee. For much of the 20th century, the state decided who could buy coffee, what farmers were paid and how it left the country. In the early 1990s, Uganda threw the market open. Today it is Africa's largest coffee exporter, and it is still arguing over how much the state should be involved.

From estate crop to state monopoly

Coffee arrived in Uganda in 1900 as an arabica crop grown on estates, and it struggled. The seeds, originally imported from Malawi, performed poorly and disease spread. Robusta, grown by smallholders at lower altitudes, took over instead, and by 1958 coffee had overtaken cotton as Uganda's main export crop.

Under British rule, coffee became a cash crop centred on the Buganda kingdom, giving households there a large income advantage over the rest of the country. As the crop grew more valuable, the state's grip tightened (Baffes, World Bank):

• 1930: a Coffee Industry Board is set up to handle quality control.

• 1953: the Board gains the power to set prices.

• 1959: renamed the Coffee Marketing Board, it starts buying coffee.

• 1962: after independence, it takes full control of the robusta industry.

• 1969: a new coffee act under Milton Obote hands it every part of the industry, including a monopoly on exports.

That system stayed almost unchanged for the next two decades.

Coffee, power and politics

Under the Board, farmers got a thin slice of what their coffee earned. Before 1990 they usually received less than 30% of the export price, and in some years of the 1970s and early 1980s as little as 15%. Coffee had to travel on the state railway, so none could be sold outside official channels, and exchange rate controls took a further cut.

Coffee was also used as a political tool. In 1963, Prime Minister Milton Obote refused demands to raise the price paid to Buganda's coffee farmers, as tensions with the kingdom grew. Between 1981 and 1985, according to Daily Monitor columnist Karoli Ssemogerere, Obote used coffee receipts to fund his war against the National Resistance Army and other armed groups.

The 1970s were the hardest decade. Output halved between 1972 and 1977 amid civil strife. When frost wiped out much of Brazil's harvest and world prices soared, Amin's government was too busy holding on to power to benefit, and public institutions such as the Coffee Marketing Board fell apart. Smugglers sold their coffee abroad at far higher prices, and those who weren't caught became millionaires.

Yet coffee survived where other crops didn't. After Amin seized foreign-owned tea factories and cotton ginneries, both industries collapsed. Coffee held on, World Bank economist John Baffes argues, because smuggling gave farmers a fair price for part of their crop, it needs few bought-in inputs, and unlike tea it doesn't have to be processed within hours of picking.

Opening up the market, 1990–1996

Yoweri Museveni took power in 1986, and breaking the state's monopoly on coffee exports became his government's first big move in the sector. Ezra Suruma, a former deputy governor of the central bank, later called it one of the "most daring and far-reaching economic measures" of the NRM government.

It happened in stages (Baffes). Reform began in 1990. In January 1991, the Board was split in two: a trading company, Coffee Marketing Board Ltd, and a new regulator, the Uganda Coffee Development Authority (UCDA), funded by a 1% levy on coffee exports. In 1992, the exchange rate was unified, and the trading company gradually sold its assets and withdrew. For the first time in decades, the state was no longer buying and selling Uganda's coffee.

There was one wobble. An export tax worth 17% of coffee earnings returned in the second half of 1994, was cut in 1995 and scrapped in July 1996.

The boom years

The early results were striking. Farmers' share of the export price doubled, from under 30% to around 70%, and they were paid promptly. Within four years, more than 70 exporters were active, alongside thousands of small traders. Helped by a world price boom, exports topped 4 million bags in both 1995 and 1996, a record at the time, and several studies found that poverty fell in coffee-growing areas.

Critics claimed quality had suffered, but Baffes found little sign of it in what was exported. Ugandan robusta held its price against the world benchmark, the share of low-grade beans fell, and coffee sent back for reprocessing dropped 87% between 1997/98 and 2003/04.

For specialty coffee, the change opened doors. Climpson & Sons names liberalisation as one of the main reasons Ugandan coffee has risen in specialty, as exporters became involved in Mount Elgon and, more recently, the Rwenzoris. Rwenzori's natural-processed arabica, known as DRUGAR (DRy UGandan ARabica), once had a reputation as one of the lowest-quality, lowest-value arabicas, trading around 40 cents below the C-price.

A 2025 UNIDO report on Uganda's coffee value chain finds that farmers now keep about 75% of the export price. That is less than in Brazil and Vietnam (over 90%), but more than in Ethiopia (61%) and Tanzania (68%), where the state plays a bigger part in marketing.

What was lost

Not everything improved. Farmers now feel the full force of world prices, falling as well as rising. The 2025 UNIDO report, though broadly positive about reform, also records real costs:

• Cooperatives collapsed after 1991. Only 10–20% of farmers now belong to one, and even members sell around 60% of their coffee to middlemen.

• Middlemen filled the gap. Around 10,000 small traders buy most of the crop. They pay cash on the spot, but often lend against future harvests on poor terms.

• Care goes unrewarded. Almost no traders separate good coffee from bad, so a farmer who takes extra care is rarely paid more for it.

• Support dried up. Government advice to farmers dwindled, and only about 20% of farmers take part in any support programme.

• Traceability is hard. One shipment can hold coffee from hundreds of farms, which makes the EU's deforestation rules difficult to meet.

Writing in 2006, Baffes saw the middlemen differently. With 500,000 growers each producing five or six bags, someone had to gather the coffee, and traders were simply doing the job cooperatives and the Board once did. He did find a quality problem, but further up the chain: industry representatives told him foreign matter in coffee reaching exporters' warehouses had risen from about 5% to over 10%, which they blamed mostly on middlemen rather than farmers.

One story from his paper sums it up. An exporter noticed that a particular truck only ever delivered when it rained. It turned out to have hidden water tanks: weighed full on arrival, then quietly emptied onto the wet ground before the second weighing.

After the boom, production slipped. It fell when prices dropped in 1997 and kept falling after they recovered, to an expected 2.5 million bags in 2005/06 (Baffes). Baffes blamed problems with little to do with how the market was run: coffee wilt disease had infected about half of Uganda's robusta area, killing an estimated 136 million trees, and only 50–60% of seedlings from a state replanting programme survived. The International Growth Centre also points to low yields on small farms and high transport and processing costs.

The state never really left

Even in a liberalised market, the state stayed busy. It registers farmers, licenses nurseries and processors, enforces quality standards, funds research and has handed out millions of free seedlings. The 2025 UNIDO report even recommends more state involvement, from coffee-specific loans to government-backed advisers in every parish.

In 2024, the line moved again. Parliament voted on 6 November 2024 to abolish UCDA and hand its work to the Ministry of Agriculture, and Museveni signed the law on 20 December. The government called it cost-cutting, part of a wider drive to trim duplicated agencies.

The vote was anything but calm. Security was heavy around Parliament, and two MPs came to blows during the debate (The Continent). Critics, including the Buganda kingdom's prime minister, Charles Peter Mayiga, questioned the government's motives. Coffee still matters enormously to Buganda: according to The Continent, Baganda farmers grow up to a third of Uganda's coffee.

This wasn't a return to the Coffee Marketing Board. The ministry took over a regulator's work, not the buying and selling of coffee. But more than 30 years after liberalisation, the boundary between state and market is still being redrawn.

The debate today

The 2024 law reopened an old question: how much of Uganda's coffee sector should the state run? Both sides draw on the same history.

The case for the market

• Farmers keep more. Their share of the export price rose from under 30% to around 70% after reform (Baffes), and today sits at about 75%, higher than in Ethiopia or Tanzania (UNIDO).

• The sector has grown. Uganda exported 8.8 million bags worth US$2.4 billion between April 2025 and March 2026, roughly double its mid-1990s record.

• Certification opens doors. A 2024 USDA report says Fairtrade, Rainforest Alliance and organic certification have promoted fair pricing and market access in Uganda. Baffes was more cautious, finding farm-gate organic premiums of only about 4–17% in the early 2000s.

• State control had a poor record. Under the Board, farmers sometimes received as little as 15% of the export price.

The case for more state involvement

• Farmers carry the risk. An open market leaves farmers exposed when prices fall. Then again, the Board didn't protect them in the past: they missed out on the high prices of the 1970s.

• Growth hasn't fully reached farmers. Ssemogerere calculates that, adjusted for inflation, Uganda earned more from coffee in 1975 and 1990 than in the year to June 2024. He reports farmers' complaints that they grow "far more" for a smaller share of the retail price, with foreign firms holding much of the coffee. Even so, he questions whether that justifies abolishing UCDA, and his figures predate the record exports of 2025/26.

• A few big exporters dominate. About ten of Uganda's 132 exporters, several owned by multinationals, handle roughly three-quarters of exports. In 2006, Baffes had found concentration low.

• More value could stay at home. The Africa Coffee Park in Ntungamo, built by the private Inspire Africa Group with government investment, is designed to turn Ugandan beans into instant coffee and other products. Opposition MPs have raised concerns that there is no formal agreement between the government and the company. Baffes argued that local processors pay farmers the same as exporters do, so home roasting may create jobs without raising farm-gate prices.

Even what the 2024 law means is disputed. The government framed it as cost-cutting; analyst Robert Kigongo, writing in the Mail & Guardian, argued the backlash revealed a loss of public trust in the government, even though UCDA's services stayed in government hands.

Ugandan coffee today

Uganda is now Africa's largest coffee exporter by volume. According to International Coffee Organization figures, it shipped 495,600 tonnes in 2024/25, ahead of Ethiopia's 442,200. Most of it still leaves the country as commodity-grade green coffee.

This history helps explain why Ugandan lots can vary so much. Where coffee passes through small traders who don't sort it by quality, careful farmers are rarely rewarded. Specialty coffee has grown in regions such as Mount Elgon and the Rwenzoris, where exporters have become directly involved.

So when you buy Ugandan green coffee, it's worth asking how the lot was collected, who processed it and how far it can be traced. The answers lead straight back to a century of argument over who should run Uganda's coffee.