The Issue
Smallholder farmers face limited access to organic inputs, training, and stable markets. Agri-SMEs 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.
The Project
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. 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, agricultural small and medium-sized enterprises (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.
DCA Uganda, SHONA, and SHONA Capital are launching “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 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.
Thematic Relevance
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.
Build 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: 31.12.2024 – 30.12.2026
Partner: SHONA
Amount: 800,000 DKK
Donor: DCA Innovative blended finance
