The Issue
Smallholder farmers face limited access to organic inputs, training, and stable markets. Small and medium-sized enterprises (SMEs) in the agri-industry struggle with value chain management, affordable capital, and market uncertainties. Consumers lack reliable access to genuinely chemical-free food. Structural barriers, including policy gaps favouring conventional farming and inadequate financial support for agroecology.
At the same time, healthy soils and ecosystems are essential for food production but face threats from land degradation, declining soil fertility, disrupted water cycles, and biodiversity loss. Conventional farming practices exacerbate these challenges, making food system transformation urgent.
The Project
Agroecology offers a holistic solution based on ecology, economy, fairness, and care. Evidence shows that agroecological practices improve resource use, skills development, and productivity. They also reduce gender gaps, create decent jobs, and enhance nutrition through diversified diets.
In Uganda, agri-SMEs can drive this transformation by connecting smallholder farmers to organic inputs, services, and markets. However, farmers lack access to inputs and support, while agri-SMEs struggle with value chain management and affordable capital.
To solve this issue, DCA Uganda, SHONA, and SHONA Capital has recently launched “The SoilCycle Fund,” a 24-month pilot to support 140 farmers in Eastern Uganda. The fund, capitalized at DKK 378,000, will provide technical assistance grants and working capital loans to five investment-ready agri-SMEs. By testing a blended finance mechanism, the initiative aims to establish a long-term facility that strengthens Uganda’s agricultural market and reduces donor dependency.
The Change
Hopes:
Farmers hope agroecological methods will improve yields, lower costs, and increase incomes through growing market demand. SMEs hope to scale their impact, benefit from consumer trends, and drive climate-positive change. Consumers hope for safe, healthy, and environmentally friendly food options.
Fears:
Farmers worry about short-term yield losses, lack of training, and weak market access; SMEs fear market instability, limited capital, and unsupportive policies; consumers fear limited access to truly chemical-free food.
Solution:
Creating economic opportunities and ensuring healthier, climate-resilient food systems through offering agri-SMEs technical assistance and working capital loans.
The Results
So far, the project has made significant progress in establishing stronger linkages between smallholder agroecological farmers and Agroecological Enterprises (AEEs). One of the major results achieved was the successful identification, mobilisation, and organization of smallholder farmers engaged in agroecological farming across Katakwi and Kapelebyong districts. The assessments revealed that more than 108 farmer groups, with an average of approximately 760 farmers, were already engaged in these value chains, demonstrating strong potential for market-oriented agroecological production. This information became instrumental in attracting Agroecological Enterprises interested in sourcing produce directly from farmers.
Another important achievement of the project was the successful engagement and onboarding of Agroecological Enterprises to support agroecological supply chains. The direct engagements between AEEs and farmers represented a major milestone for the project. Through facilitated field visits and farmer-company meetings, AEEs were able to assess production realities on the ground, understand the challenges faced by farmers, and identify opportunities for long-term collaboration. Farmers, on the other hand, gained exposure to structured markets, quality requirements, and potential buyers for their produce.
The project also generated important technical and operational insights that are expected to improve agroecological production and supply chain efficiency. For example, through interactions with farmers, AEEs identified several gaps affecting productivity and market readiness, including inconsistent post-harvest handling practices, fragmented farmer organization, limited access to quality organic inputs, and varying crop varieties. In response, some AEEs began designing tailored support interventions to address these gaps. Several AEEs expressed concrete interest in expanding their engagement with farmers through working capital support, technical assistance, and supply chain investments.
At the farmer level, the project contributed to improving awareness and confidence in agroecological market opportunities. The project also achieved meaningful progress in advancing social inclusion. Women and youth were intentionally prioritised throughout implementation, with the project targeting 60% women and 20% youth participation among the selected farmers. This deliberate inclusion approach ensured that women and young people had opportunities to engage in agroecological value chains, access market opportunities, and participate in income-generating agricultural activities.
The Partner
SHONA is an enterprise development organisation with a mission to build good businesses in Uganda and East Africa.
A good business is a viable business that positively benefits society by creating and balancing value for all its stakeholders, including customers, employees, owners, value chain partners and the communities in which it is based.
Our work
DCA Uganda primarily works in three thematic areas:
Humanitarian-Development-Peace Nexus
The Humanitarian-Development-Peace Nexus program supports refugees, displaced persons, and refugee hosting communities to access immediate lifesaving assistance and to participate in long-term, development interventions for self-reliance and sustainable livelihoods.
Building Resilience
DCA Uganda supports marginalized women, men, and youths with increased access to land and other natural resources in a climate and environmentally responsible way.
Fighting Extreme Inequality
DCA Uganda works with partners to ensure that marginalized persons participate in and influence decision-making processes and hold duty bearers accountable in upholding human rights and in securing equitable and sustainable development.
About the project
Full title: Unlocking markets and income for agroecological farmers and enterprises through The SoilCycle Fund
Period: 01.01.2025 – 30.12.2026
Partner: SHONA
Amount: 800,000 DKK
Donor: DCA own funds (Innovative Blended Finance)
