The country has a rich and varied agriculture. Over three quarters of the land area receives at least the minimum rainfall necessary for intensive cultivation. 42% of the total land area of 24,341,100 hectares (60,146,858 acres) is suitable for agricultural use. However, only about 21% of the land area is currently under cultivation, mostly in the three southern regions. The major impediment to the extending cultivation and herding is the prevalence of the tsetse fly. The basic unit of production is the small-scale family holding. The average size of this holding is 1.6 hectares to 2.8 hectares (4 to 5 acres) in the south and 3.2 hectares in the north.

Customary forms of land tenure vary from tribe to tribe. The majority of tribes recognize the right to continuous use of a specific area of tribal land by a family, which amounts to virtual ownership. This right is secured as long as the land is occupied and cultivated, but when it ceases to be used, it reverts to common ownership. Rights of sale or lease are not part of the traditional rules of tenure but have come to be accepted in practice. In most areas, the clan or lineage head allots land; in others this is the responsibility of the local council .[1]

Uganda's main food crops are plantains, cassava, sweet potatoes, millet, sorghum, corn, beans, and peanuts. Major cash crops include coffee, cotton, tea, and tobacco. In the 1980s, however, many farmers sold food crops to meet short-term expenses. Production of cotton, tea, and tobacco virtually collapsed during the late 1970s and early 1980s. In the late 1980s, the government attempted to encourage the diversification of commercial agriculture and the exportation of a variety of nontraditional agricultural commodities. The Uganda Development Bank and several other institutions supplied credit to local farmers, who could also receive credit directly from the government through agricultural cooperatives. Most small farmers obtained short-term credit through the policy of allowing farmers to delay payments for seeds and other agricultural goods provided by cooperatives.

Cooperatives also handle most marketing activity, although marketing boards and private companies sometimes deal directly with producers. Many farmers complain that cooperatives do not pay the farmer for produce until long after it had been sold. The generally low producer prices set by the government and the problem of delayed payments for produce have prompted many farmers to sell produce at higher prices on illegal markets in neighboring countries. During the 1980s, the government steadily raised producer prices for export crops in order to maintain incentives for farmers to deal with government purchasing agents, but these incentives failed to prevent widespread smuggling.[2]

[1] Kurian, George Thomas 1992. Encyclopedia of the Third World , fourth edition, volume III, Facts on File: New York, N.Y., pp. 2009-2010.

[2] Byrnes, Rita M. (ed.) 1992. Uganda A Country Study , Library of Congress: Washington D.C. pp. 108-111.