How the USAID funding freeze disrupted this Ugandan business

Ugandan businessman Teddy Ruge is among those affected by the Trump administration’s decision to freeze many activities of the US Agency for International Development (USAID).

Ruge is the founder and CEO of Raintree Farms, a moringa-growing and processing business in Masindi, Uganda. Moringa, a nutrient-rich superfood, has strong global demand. The company grows moringa on its own farm and also sourced from a network of small-scale farmers it has supported over the years.

The Covid-19 pandemic and resulting lockdowns severely disrupted Raintree’s supply chain. Unable to produce during that period, the company had no choice but to suspend engagement with the smallholder farmers until it received clarity from authorities on when operations could resume.

As the pandemic restrictions receded, in 2022, Raintree Farms engaged with USAID to help it rebuild its supply chain and resume large-scale exports. The application process took time and was finalised in April 2023. USAID approved a grant to finance Raintree’s Secure Income Protection (SIP) programme, which provided 250 smallholder farmers with a stable monthly income to cover their operational costs.

“We were excited,” Ruge says. “We’ve got customers again. We’ve got the supply chain built up again … We [were] ready to get going.”

However, in January this year, the Trump administration announced a suspension of USAID activities, cutting off funding for Raintree’s SIP programme. Under the funding model, USAID covered the monthly direct payments to farmers. The plan was that once Raintree began selling the moringa produced by these farmers, it would take over the payments using revenue from exports. But with USAID’s abrupt cancellation of funding, Raintree was unable to cover those payments, as it had not yet resumed shipments.

With no immediate solution, Ruge says the company has little choice but to start over, relying solely on production from its own farm, which means it will have much less product to sell.

“We will return to working with farmers once we’re fully back on our feet – a process that could take us about two years, if all goes well,” Ruge notes.

Reflecting on the USAID partnership, he adds: “USAID was bold to fund a new innovative approach to working with vulnerable farmers and I commend them for the effort. SIP needed that kind of support to get off the ground.”

Watch our full in-depth interview with Teddy Ruge – Building an agribusiness venture in Africa: The tough road to success

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