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'How Do We Get it to the Mill?' A Study on Bulking Arrangements that Enable Sourcing from Smallholders in the Ugandan Vegetable Oil Chain

Uganda has many small producers that can benefit from the expanding sunflower production. Collecting scattered produce in remote areas is expensive. For efficient transport and processing, these small quantities have to be bulked in one place. In Uganda, three types of bulking arrangements exist: trader-led, processor-led and farmer-led. In each type, targeted investment policies and innovative financial institutions can increase the performance of the arrangements. Combining support for storage infrastructure with increased access to trade finance and strengthened governance structures will provide the room for upscaling and linking large numbers of poor households. These intervention need to be targeted to groups that have managed to build a minimum capacity in resolving problems around collective action and opportunistic behaviour. Previous experience with saving and credit schemes prove to form the basis for most of the successful bulking groups. Collective marketing by farmers’ organisations is a peculiar form of governing the logistic bulking functions that faces specific challenges. This chapter describes the emergence and functioning of nine collective marketing arrangements involved in sunflower production. We assess their performance on two dimensions: their economic performance in carrying out economic-logistic functions, and their performance in governing supply and demand transactions with their members. Their internal governance structure takes shape in a range of internal rules and procedures. The design and adaptation of these governance mechanisms cope with several tensions (‘agency dilemmas’) related with opportunistic behaviour. The accumulation of experiences with group dynamics that make or break the group’s service provisioning to members proves key in explaining their survival and growth. The most successful bulking groups that are currently active in sunflower production and marketing are benefiting from a previous history of creating group cohesion, be it through managing small saving and credit groups or collective production on a communal plot. These findings underline the need to prospect existing practices of collective action in rural areas and support them to develop the take-up of bulking activities as part of their existing service portfolio.