As of June 2026, the government of Uganda reported that more than three million people had received the Parish Development Model (PDM) funds. Since its launch in 2022, Shs 4.4 trillion has been transferred to all 10,589 parishes as revolving capital to boost production.
The jury is still out on the achievements at this phase. However, production alone is unlikely to deliver sustained increases in household incomes. Those households that sell unprocessed agricultural products are exposed to low farm gate prices and postharvest losses.
The government has long recognised value addition as a critical component for agro-industrialisation and structural transformation.
Value addition can improve product quality, extend shelf life and enable producers to access higher-value markets based on consumer demands. Earlier programmes such as the Community Agriculture Infrastructure Improvement Programme (CAIIP) and the Agriculture Cluster Development Project invested in maize mills, milk coolers, coffee hullers and other processing facilities across the country.
Such light value addition infrastructure generates local employment opportunities within the parish through aggregation, transport, processing, and marketing. Yet, despite sustained government efforts, adoption of value addition among many smallholder producers remains limited.
Evidence suggests that some value-addition facilities remain under-utilised or nonfunctional because of unreliable electricity, weak management, inadequate maintenance, and limited market linkages. Reliable electricity, all-weather feeder roads, storage facilities and digital connectivity are not simply infrastructure projects; they are productive investments that can enable value addition, reduce post-harvest losses and reduce the cost of doing business.
The 2026/27 national budget recognises these challenges as it allocated Shs 2.26 trillion to agroindustrialisation, Shs 8.79 trillion for transport infrastructure development, Shs 2.07 trillion for energy and Shs 45 billion for rural electrification.
These investments are necessary but will only translate into higher incomes if they deliberately support parish-level production and processing systems. The strength of PDM lies in its integrated design, specifically pillar one focuses on agricultural value chain development while pillar two focuses on infrastructure and economic services.
These pillars should work together to support value addition and sustained commercialization. Importantly as the government positions the parishes as Uganda’s core planning unit, it should also begin viewing each parish as a potential agroindustrial node rather than simply a financing unit.
Every parish may not require its own large processing plant but instead, Parish SACCOs and producer groups can aggregate produce and operate shared facilities such as solar dryers, milk coolers, or grain mills on a small fee-for-service basis.
Infrastructure should be established around areas with proven high production potential and linkage to viable markets. This approach lowers investment costs, improves equipment utilisation and enables smallholder farmers to participate in value addition without individually purchasing expensive machinery.
At the regional level, agro-processors and industrial parks can then purchase larger volumes from organised parish producer groups, creating stronger links between rural producers and national markets.
The private sector should support value addition investments while the government should increasingly focus on creating conditions that attract private investors into processing through reliable infrastructure, predictable policies and organised producer groups capable of supplying consistent volumes and quality.
Where public processing facilities already exist but are non-functional, rehabilitation and public-private partnerships may offer better value than constructing new facilities. Equally important is strengthening the technical capacity of PDM beneficiaries through the Practical Training Centres where extension services should move beyond increasing production to supporting post-harvest handling, quality assurance, processing technologies and market requirements.
Community Development Officers, Parish Chiefs and SACCO leaders should provide regular market information so that investment decisions respond to consumer demand rather than production trends alone.
Evidence from the Economic Policy Research Centre (EPRC) PDM assessment report found that 39 per cent of beneficiaries had switched enterprises because alternative enterprises offered better market opportunities.
This highlights the need for stronger market intelligence alongside technical support. The next phase should focus on ensuring that those resources generate lasting wealth. Sustained transformation will not come from financing production alone.
It will come from connecting production to markets through value addition, aggregation and commercialisation.
The writer is a research associate at Economic Policy Research Centre (EPRC)
The post PDM parishes can be turned into light value-addition nodes appeared first on The Observer Media Ltd.
Follow the story
