Agriculture accounts for 70 percent ofemployment, overwhelmingly on small farms; occupies half ofall land area, and provides half of all exports andone-quarter of GDP in Uganda. It is considered a leadingsector for future economic growth and economic inclusion inthe current National Development Plan. Yet despite havingvery favorable natural resource and climate conditions forproduction of a wide variety of crops and livestock, averageTotal Factor Productivity (TFP) growth--the differencebetween aggregate output growth and the growth of all inputsand factors of production that produced it--in Ugandanagriculture has been negative for the last two decades. Thissuggests that on balance the country is now getting less forequal or greater effort. While drought and pest issueslikely have played a harmful role, other plausibleexplanations are a combination of the following: weakeningover time of the public institutional base for promotingagricultural productivity at the level of small farms,inefficiencies in agricultural public expenditures,inadequate agricultural regulation and policies, and a lackof collateralizable farm assets. National agriculturaloutput has grown at only 2 percent per annum over the lastfive years, compared to agricultural output growth of 3 to 5percent in other EAC members and 3.3 percent per annumgrowth in Uganda's population over the same period.
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