TRALAC - Trade Law Centre

Ugandan Growers Seeking Niche in Organic Markets Through AGOA

Tuesday, 09 September 2003

Source: United States Department of State (Washington, DC)

Ugandan producers of coffee, vanilla, and honey are here to invade the 39 percent of households in the United States that buy organic and/or natural products, and claim a small share of the $36.4 billion organic foods market in the U.S.

According to a group from Uganda interviewed by the Washington File September 8 at the offices of the Whitaker Group, a trade-consulting firm operated by former assistant U.S. Trade Representative (USTR) for Africa, Rosa Whitaker, their efforts to promote their organic foods stem in part from the African Growth and Opportunity Act (AGOA), an innovative U.S. trade program whose aim is to spur sub-Saharan African exports.

Thus far 38 sub-Saharan African nations have been certified eligible for duty and quota-free entry of a wide range of their goods into the U.S. market under AGOA, which was originally passed by Congress in May 2000. Congress recently amended the act to extend even more favorable trade benefits to nations reforming their economies. The Whitaker Group is lobbying for a further expansion of the act.

The Ugandans, who represent an important segment of the organic exporting industry, said that dispelling false perceptions on both sides was a major goal of their September 3-8, AGOA-sponsored trip to Washington.

"Europeans have spread rumors that the U.S. market is not open to African products," said Alastair Taylor, an Englishman and agriculturalist who works for a British non-governmental organization (NGO) and is chairman of the National Organic Agricultural Movement of Uganda. "But we've found it to be more open than we originally thought." In fact, he added, the Food and Drug Administration said that Ugandan products are very welcome.

During their visit the group also attended the Natural Products Expo East, a regional natural and organic product trade show, and met with representatives from the U.S. importing industry to discuss marketing strategies and the further development of American-Ugandan trade.

"This is the beginning of a long trek to success," said Mulgawe Damas, Director of Uganda Marketing Services, Ltd. "Instead of aid, we can better use that money to promote trade."

Damas said, "We need to express our gratitude to the U.S. government for passing AGOA and the Whitaker group for facilitating our trip. And just as important, we need to thank the Ugandan government for embracing AGOA." Damas added that most of the vanilla farmers in Uganda are poor, and AGOA could help raise them out of poverty.

After his weeklong stay, Damas suggested that AGOA's advantages for U.S. businesses need to be better communicated, while in Uganda exporters need to be clear about the terms of AGOA. "Exporters need to know that a lack of duties and taxes on their products do not mean a lack of regulations," said Damas. "All FDA (U.S. Food and Drug Administration) and USDA (U.S. Department of Agriculture) regulations still need to be met."

Maria Odido, Managing Director of Bee Natural Products, Ltd. in Uganda is also excited about developing a niche market for honey in America. She said 645 tons of honey were produced in Uganda in 2000, four hundred eighty tons of which were produced in the West Nile region alone, all for consumption inside Uganda and Africa.

With the help of AGOA, Odido hopes a market for her group's honey can be found in the United States, which should lead to increased production and rising incomes among her producers, who are in one of Uganda's poorest regions.

However, she said, getting the honey, known for its unique cross-pollinated flavor, to the United States is easier said than done, primarily because of two obstacles: lack of knowledge, and the cost, mainly for transportation.

"It's not a big export because most countries outside of Africa don't know about it," said Odido, who hopes that increased awareness of AGOA and the fine products that Uganda has to offer will stimulate American/Ugandan trade. "I am proud to open the world up to Ugandan honey."

Transporting the organic products from landlocked Uganda to the United States is another challenge the group said must be overcome in order to break into the booming organic foods market. "The only problem I see with the American market is the cost of bringing the product here [to America]" said Odido.

The Ugandans think they may have an antidote to this challenge since Americans are so health conscious: No pesticides or other harmful chemicals are used in the cultivation of the Ugandan organic foods.