The document summarizes the findings of an analysis conducted by IFPRI on the impacts of global food, fuel, and fertilizer price shocks in Uganda. The analysis uses economywide modeling to estimate the effects on GDP, employment, poverty, food security, and diet quality. It finds that while GDP and employment are largely unaffected, poverty rises modestly as fuel price increases hurt households and fertilizer price rises reduce crop productivity. Diet quality also deteriorates as food prices increase and incomes fall, worsening food deprivation. The impacts vary between rural and urban households. Policy options to mitigate the effects will be evaluated in the next steps.

1. Version: 7 July 2022
Uganda
Impacts of the Ukraine and Global
Crisis on Food Systems and Poverty
Xinshen Diao, Paul Dorosh, Mia Ellis, Karl Pauw, James Thurlow
International Food Policy Research Institute, Washington DC
These country studies are conducted by IFPRI with financial support from
BMGF, FCDO, and USAID. All studies use data and models developed with
ongoing support from BMGF, USAID and the CGIAR’s “Foresight and Metrics”
initiative.
Xinshen Diao (x.diao@cgiar.org) | Paul Dorosh (p.dorosh@cgiar.org) | James Thurlow (j.thurlow@cgiar.org)

2. Version: 7 July 2022
Overview
• Series of country case studies
• Economywide modeling
• Capture world market shocks
• Estimate impacts on economy, agri-food
system, poverty, food security, etc.
• Simulate policy responses
• Three phases of analysis:
1. Initial data collection and impact assessment
2. Data revisions and analysis of broad policy options
• Cash transfers, food aid, and fertilizer subsidies
• Fiscal implications for national governments
3. In-country engagement and tailored policy analysis
Impact
assessment
Policy
analysis
Country coverage
Countries with IFPRI RIAPA models
May June
July
USAID-AGRILINKS links for all briefs and slide decks
https://www.agrilinks.org/activities/ifpri-analyses-country-level-impacts-high-food-fuel-and-fertilizer-prices

3. Version: 7 July 2022
Shocks | World Food, Fuel and Fertilizer Prices
World price
Trade share
Direct use
Indirect use
Incomes
How big is the increase in world price?
How important are imports in local market?
Can local producers substitute for imports?
Which sectors use the product as an input?
Which other sectors are affected via supply chains?
What kinds of workers and households earn
incomes within the affected sectors?
Final use Which households consume the affected products?
Impact Channel Considerations World Price Shocks
Source: World Bank Pink Sheets
Global data
11%
-13%
100%
56%
34%
88%
101%
Maize Rice Wheat Palm oil Crude oil Natural gas Fertilizer
Change in real world prices (June 2021 to April 2022)
30 Jun 2021 - 31 Jan 2022 31 Jan 2022 - 30 Apr 2022
30 Jun 2021 - 30 Apr 2022

4. Version: 7 July 2022
Shocks | World Food, Fuel and Fertilizer Prices
World price
Trade share
Direct use
Indirect use
Incomes
How big is the increase in world price?
How important are imports in local market?
Can local producers substitute for imports?
Which sectors use the product as an input?
Which other sectors are affected via supply chains?
What kinds of workers and households earn
incomes within the affected sectors?
Final use Which households consume the affected products?
Impact Channel Considerations Supply and Demand
Supply
(% by source)
Demand
(% by use)
Uganda data
Source: IFPRI Uganda RIAPA Model
100%
8%
80%
92%
20%
98%
Maize Wheat Edible oils Oil products
Imports
Domestic
34%
75%
35%
85%
55%
43%
15%
11%
23% 21%
Maize Wheat Edible oils Oil products
Exports
Final use
Input use
+ Others = 100%
+ + +
1.9% 0.2% 1.7% 2.7%
Products’ share of the
value of total demand
throughout the economy
Note: Wheat includes wheat grains and flours in demand. About 40% of domestically processed wheat flour is
for exports.

5. Version: 7 July 2022
Shocks | World Food, Fuel and Fertilizer Prices
World price
Trade share
Direct use
Indirect use
Incomes
How big is the increase in world price?
How important are imports in local market?
Can local producers substitute for imports?
Which sectors use the product as an input?
Which other sectors are affected via supply chains?
What kinds of workers and households earn
incomes within the affected sectors?
Final use Which households consume the affected products?
Impact Channel Considerations Consumption Baskets
Uganda data
Source: IFPRI Uganda RIAPA Model
7.7% 10.3%
5.0%
17.8%
6.4%
36.3%
41.8%
34.0%
51.4%
36.4%
56.0%
55.8%
65.5%
44.9%
62.4%
All households Rural Urban Poor Nonpoor
Composition of household consumption spending
Cereals & edible oils Other foods Non-food goods & services

6. Version: 7 July 2022
Shocks | Fertilizer Response (crop productivity effect)
Adoption
Application
Price
Demand
Response
What share of cultivated land uses fertilizers?
How much fertilizer is being used?
(i.e., fertilizer application rate)
How big is the domestic fertilizer price increase?
How do farmers react to rising fertilizer prices?
(i.e., price elasticity of fertilizer demand)
How do yields change with reduced fertilizer use?
(i.e., fertilizer response ratio)
Impact Channel Considerations Fertilizer Adoption Rate
Source: Uganda National Panel Survey 2019/20
Timing When is the fertilizer needed?
Uganda data
8%
6%
17%
11%
1%
34%
36%
2%
58%
1%
9%
72%
Maize
Rice
Wheat
Pulses
Groundnuts
Irish potatoes
Sweet popatoes
Leafy vegetables
Other vegetables
Sugarcane
Tobacco
Bananas
Other fruits
Leaf tea
Coffee
Share of cultivated land using fertilizer

7. Version: 7 July 2022
Shocks | Fertilizer Response (crop productivity effect)
Adoption
Application
Price
Demand
Response
What share of cultivated land uses fertilizers?
How much fertilizer is being used?
(i.e., fertilizer application rate)
How big is the domestic fertilizer price increase?
How do farmers react to rising fertilizer prices?
(i.e., price elasticity of fertilizer demand)
How do yields change with reduced fertilizer use?
(i.e., fertilizer response ratio)
Impact Channel Considerations
Crop Calendar
Source: FEWSNET Uganda
Timing When is the fertilizer needed?
Planting for Uganda’s 2022 main season is already
underway
Uganda

8. Version: 7 July 2022
Results | GDP and Employment
• National GDP and employment are largely not
affected
• Export maize, oilseeds, edible oils, and some other
agricultural commodities
• A small amount of crude oil and oil product
production
• Less oil-intensive in non-agriculture
• Agri-food system GDP and employment are also
largely not affected
• GDP and employment decline slightly in primary
agriculture as the gains from exports of maize and
oilseeds are not large enough to offset the losses in
nonexportable agricultural production
• Off-farm agri-food system GDP and employment
gains mainly from agricultural export related
services
• Faster job gains in such off-farm sectors
Source: IFPRI Uganda RIAPA Model
-0.2%
0.0%
-0.1%
0.3%
-0.4%
-0.3%
0.1%
0.0%
0.9%
-1.6%
-2.0% -1.5% -1.0% -0.5% 0.0% 0.5% 1.0%
Whole economy
Whole AFS
Agriculture
Off-farm
Outside AFS
Agri-food
system
Change in GDP and employment due to food, fuel
and fertilizer shocks (%)
GDP Employment

9. Version: 7 July 2022
Results | Drivers of GDP Losses
• Fuel shocks are the main driver of modest decline in
national GDP
• The small gain in agri-food GDP led by rising food and
fuel prices
• The negative effect of fertilizer shocks on primary
agricultural production is modest
• Low fertilizer adoption for many large crops (e.g. plantains,
cassava)
• Off-farm agri-food GDP benefits from higher prices
• Led by agricultural export related service activities
• Larger GDP losses outside the agri-food system driven
by higher fuel and food prices
• Higher transaction costs
• Lower consumer demand from higher prices
Source: IFPRI Uganda RIAPA Model
-0.1%
-0.1%
-0.2%
0.1%
0.2%
-0.3%
-0.1%
0.1%
-0.2%
0.0%
-0.1%
0.3%
-0.4%
Whole economy
Whole AFS
Agriculture
Off-farm
Outside AFS
Agri-food
system
Percentage change in real GDP due to food, fuel and
fertilizer shocks (%)
Food prices Fuel prices Fertilizer prices & response

10. Version: 7 July 2022
Results | Household Consumption
Source: IFPRI Uganda RIAPA Model
• Household consumption falls
• Larger than GDP losses as households are hit twice by rising
prices and falling incomes
• Importance of shocks differs across population groups:
• Fuel shocks affect all households and are more important
for urban and nonpoor households
• Earn more income outside the agri-food system
• More import-intensive consumer basket
• Consume products with larger transaction cost margins
• Fertilizer shocks important for poor and rural households
• Rely more on farm incomes
• Consume more domestically-produced foods
• Food prices have little effect
• Positive income effect from increase in export crop production
offsets the negative effect of higher food prices
• However, grains from rising food prices are offset by the
reduces in consumption led by higher fuel and fertilizer prices
0.1%
-0.1%
-0.1%
-1.0%
-1.0%
-1.1%
-0.6%
-1.1%
-0.2%
-0.3%
-0.5%
-0.2%
-1.2%
-1.2%
-1.3%
-1.2%
-1.3%
National
Rural
Urban
Poor
Nonpoor
Percentage change in real consumption
Food prices Fuel prices Fertilizer prices & response

11. Version: 7 July 2022
Results | Changes in Inequality
• Differential effects on poor/nonpoor households drive
changes in inequality:
• Fuel shocks causes larger consumption losses for
households in the top quintiles
• Fertilizer shocks affect lowest quintile much more than
top quintile, causing inequality to increase significantly
• Food prices benefit all households but hurt the low
quintile
• Overall, inequality is less affected
• But poverty still increases
Source: IFPRI Uganda RIAPA Model
-1.5%
-1.0%
-0.5%
0.0%
0.5%
Q1 Q2 Q3 Q4 Q5
Percentage change in quintile consumption
Food prices
Fuel prices
Fertilizer prices & response
Combined food, fuel and fertilizer shocks

12. Version: 7 July 2022
Share of population
falling into poverty
Results | Poverty
• Poverty rises modestly
• Headcount rate up 0.9% points
• Near 400 thousand more people pushed into
poverty
• Food prices become an impact factor for rising
poverty among both rural and urban households
• Larger increase in poverty in rural areas
• Near 90% of expanded poor population
• Headcount poverty rate rises more in rural
• Rural population much larger than urban population
Source: IFPRI Uganda RIAPA Model
0.2%
0.2%
0.3%
0.4%
0.2%
0.5%
0.2%
0.1%
0.3%
0.9%
0.4%
1.0%
National
Urban
Rural
Change in poverty headcount rate (%-point)
Food prices Fuel prices Fertilizer prices & response
110
90
184
19
165
94
89
388
44
344
National
Urban
Rural
Change in poor population (1000s)
Food prices Fuel prices Fertilizer prices & response
11%
89%
Urban
Rural

13. Version: 7 July 2022
• Food, fuel and fertilizer shocks together increase the cost of a
healthy reference diet
• Reference diet is the EAT-Lancet’s “healthy” diet thresholds for
the six major food groups
• Rising prices push up real cost of added fats (edible oil) and
proteins (meat and fish), while falling incomes reduce demand
for other groups and thus, lower their costs slightly
• The overall real cost for a healthy diet increases by 4.3%
Results | Diet Quality
Source: IFPRI Uganda RIAPA Model
• Rising food prices and falling incomes cause diet quality to
worsen for many households
• Prior to the crisis, few households had consumption levels and
diversity needed for a healthy diet
• Rising food prices cause 500 thousand people to become deprived
in at least one additional food group
• Rural households account for more of the deterioration in diet
quality
4.3%
-0.1%
-0.2%
0.9%
3.9%
Net change in
cost of healthy
diet
Contributions of
food groups to
change
Shares of six food groups in total cost
of a healthy diet prior to the crisis
Added fats
Proteins
Dairy
Fruits
Vegetables
Staples
10.6%
9.9%
14.5%
21.9%
31.4%
11.7%
Shares of six food groups
in total cost of a healthy
diet prior to the crisis
Added fats
Proteins
Dairy
Fruits
Vegetables
Staples
391
145
250
110
96
512
158
353
National
Urban
Rural
Number of people to become deprived in at least one
additional food group (1000s)
Food prices Fuel prices Fertilizer prices & response

14. Version: 7 July 2022
Headlines
• GDP and employment are largely less affected by the food,
fuel and fertilizer shocks in Uganda
• Export agriculture benefits and more gains in agricultural
export related service activities
• But these gains are not large enough to offset the fall in
nonexportable agricultural production
• Low fertilizer adoption among many large crops makes
agriculture less at risk to fertilizer shocks
• However, poor households are still vulnerable to the
shocks
• Vulnerable to all the three shocks
• More rural households increase in poverty
• Food shocks cause diet quality deterioration for many people
• Next steps
• Evaluate policy options available to governments and
development partners to mitigate impacts on food systems,
poverty, and food insecurity (e.g., cash transfers, food aid,
fertilizer subsidies, fiscal support, etc.)
Impact
assessment
Policy
analysis
Country coverage
May June
July