COMMODITY IMPORT PROGRAM

The Ministry of Finance will implement the project under Regional Economic Development Support Office (REDSO/EA) supervision. CIP funds will be used to import -- primarily from the United States -- agriculture-related commodities in three categories, as follows: (1) Raw materials will be provided for agro-industries. A 6-month supply of steel will be provided to Uganda Hoes Ltd. and Ugma Steel and Engineering Corp. to produce farm implements, e.g., hoes, spades, and axes. In addition, Dunlop Tyres Ltd. will be given a 6-month supply of rubber, cotton cloth (for tire backing), and value parts. These three parastatal firms -- especially Dunlop Tyre Ltd., which has the weakest managerial organization -- will be examined and data concerning their production costs and financial status will be used by the GOU for computing their specific credit needs. (2) Inputs to revitalize agricultural production and facilitate marketing will also be provided and will likely include a variety of seeds (cotton, groundnuts, maize, and vegetables), fertilizer and other inputs, produce sacks, milk pails, and bicycles. (3) Ten trucks and spare parts will also be provided for use in distributing commodity inputs to small farmers and in marketing their crops. Commodities imported under the project will be sold to target groups at prevailing government prices or at cost. CARE or other similar private voluntary groups will distribute these inputs. Revenue accruing from these sales will be deposited into a special account and used for agricultural and cooperative activities as agreed to by both USAID and GOU. Technical assistance will be given to GOU to facilitate the proper distribution of commodities and to permit GOU to set up an accounting system to register commodity arrivals.