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57 rice companies fold operations

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Redudant rice milling machines at Damaza Grain Millers Limited factory in Jinja District. The company is among those that laid off some workers due to low production capacity. PHOTO by Joanita Mbabazi 

Recently, rice farmers, millers and exporters petitioned the Speaker of Parliament Rebecca Kadaga to stop the eviction of rice farmers from wetlands in favour of foreign investors.
Mr Isaac Kashaija, the chairperson of the Rice Business Sector Association, said the rice farmers were stopped from growing rice in wetlands, a situation that has left many jobless.
“If we are growing rice in wetlands and government thinks we are not doing it the right way, then we need to be guided on the best modern farming practices of growing rice in because rice as a food crop best grows in wetland areas. We are surprised that the wetlands are being given to investors to grow rice, leaving us the local farmers with no space to grow rice and the only option is to quit rice growing,” said Mr Maliba Christopher a farmer in Bugweri district.
To prove their outcry, Daily Monitor visited some of the rice milling factories and the rice gardens. At Damaza Grain Millers Limited factory, redundant machines greet us. Here, few workers also load skeletal sacks of rice for few locals who had come to buy the commodity. This was the same case at Wereke Investment Limited factory.
Much as we expected to hear sounds of machines sorting rice, or some activity involving loading and offloading sacks of both of sorted and paddy rice (rice with husks), this was not the case.
According to the owner of Damaza Grain Millers Limited, Mr Drake Magara, they laid off some workers due to low production capacity.
“On a daily basis, we used to mill around 50 tonnes of rice in a day. But now, we only mill five tonnes of rice.”
Mr Magara attributes this to farmers who ditched rice farming for other food commercial crops that can be grown on land as some have already faced eviction from wetlands to grow rice.
“Farmers have been evicted from the rice fields. They no longer get enough paddy rice to mill forcing them to lay off some workers. I have been employing 50 employees both those operating the machines to sort out rice and others in packaging loading and offloading. But I was forced to remain with 25 employees only,” Mr Magara says.
He adds that instead, imported rice has flooded the country.
“Why would we rely on foreign food like rice yet it can be locally grown here?” Magara adds.

A rice farmer in a wetland in Jinja. Farmers

A rice farmer in a wetland in Jinja. Farmers have been evicted from their rice fields. PHOTO BY Joanita Mbabazi

Low price
The price of local rice has gone down because local millers and retailers have to earn something to compete with the imported rice from other countries.
“This discourages farmers because a kilo of paddy rice costs Shs500, from a farmer. At retail price, a kilo of local fine rice costs Shs2,500 while a kilo of imported white fine rice is Shs3,000. We cannot sell at Shs3,000 because we shall not make more sales since we are competing with the imported rice as well on the market,” Mr Geoffrey Sudayisi, a retail business man in Jinja District says.
The rice sector employs more than 49,000 both millers, importers and farmers. But with the continuous low production, these are likely to abandon the business. Already, 57 companies that have been operating in losses of about Shs38b have closed business due to low production and meeting costs such as electricity and paying off workers. Bu and taxes cannot be affordable as they are earning less from the business.
Demand
According to Mr Isaac Kashaija, chairperson Rice Business Sector Association Limited, between 2007 and 2014, the demand of rice was about 225,000 metric tonnes but factories only produced 165,000 metric tonnes. From 2014 to 2017, the demand for rice increased to 499,200 but they were only able to produce 272,881 metric tonnes of rice.
In 2017 to 2019, the demand did not increase and remained the same like in 2017 but they were only able to produce 215,741 metric tonnes of rice. This implies that despite increased demand for rice, they cannot meet the production capacity to satisfy the all local consumers who need rice due to the increased decline in the production levels.
Mr Kashaija also complains that the increased importation of white fine rice from other countries like Tanzania which is not subjected to tax is greatly crippling the local rice business for people to earn from it.
14 rice import companies which include SWT Tanners Limited, General Agencies Uganda Limited,Ssuna Limited , Willex Commodities Limited, Akhcom Limited, Jassani General Trading Limited, Singa Rice Limited, Armour Trading Company Limited, Jan Mohammed Investments Limited,Galorre Intrenational Limited, Imba Foods Uganda Limited, Zen Trading Limited and Mabu Commodities, have been relieved of paying tax due to a delayed court appeal filed by these companies against Uganda Revenue Authority at the Commercial Court since 2014 opposing the 18 per cent VAT.

Import duty
These argue that they are currently paying 75 per cent import duty on rice, six per cent Withholding Tax, and 1.5 per cent infrastructure levy. Therefore, the addition of 18 per cent VAT levy would make their products expensive and unaffordable for customers.
“These are greatly enjoying the market space in the country as no ruling has been made yet since 2014 to date. During that financial year of 2014/2015, the VAT tax law was meant to work but these companies objected it saying this was abrupt and they were not notified as they had targeted to import rice for the festive season that year.
“But since 2014, up to now we find this unfair because when some exporters go to Tanzania much as it is part of the East African Community (EAC), they are charged taxes. But these importers must also pay the 18 per cent VAT tax,” Mr Kashaija says.
According to Mr Everest Kayondo, Kampala City Trader’s Association chairperson, importers within the EAC cannot pay tax on imports and exports due to the free movement of goods of services in all partner states. However, those who are not under this body find it fair enough to pay tax for their imported rice especially from Pakistan and India.

Power
Companies which have closed business include:
•Kikagate Traders Ltd, Taubah General Enterprises, Band Investment Uganda Limited,
•Upland Rice Millers Company Limited,
•Royal Rice Limited,
•Pearl Rice Ltd,
•Eastern Rice Company Limited,
•OBN Produce and Supply Company Limited,
•Link N Global Commodity Limited,
•3R Agro industries Limited
•Rwenzori Upland Rice Company Limited among others

Source: Daily Monitor

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FAO launches solar powered irrigation systems in Kalungu

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FAO Country Representative Dr. Antonio Querido, Agriculture Minister Vincent Ssempijja flanked by Kalungu District leadership during the commissioning of a solar irrigation system in Bugomola A, Lwebenge Sub County in Kalungu

KALUNGU — The Food and Agriculture Organization of the United Nations (FAO,) last week, launched two solar powered irrigation systems in Kalungu District. The projects are part of efforts to strengthen resilience of rural populations and agricultural production systems through the provision of water for irrigation in the the cattle corridor districts.

FAO, in collaboration with the Ministry of Agriculture, Animal Industry and Fisheries – MAAIF has been implementing a Global Climate Change Alliance (GCCA) Project on agriculture adaptation to climate change in Uganda since 2012 — through the establishment of small scale irrigation systems in the Central Cattle Corridor districts of Mubende, Nakasongola, Luwero, Kiboga, Nakaseke, Sembabule, Kalungu and Rakai amongst others, to help farmers cope with harsh climatic conditions by sustaining all season crop production, but mainly during the dry seasons.

Residents in Bugomola A, Lwebenge Sub County and Mabuyenzo village in Kalungu District were the first beneficiaries of the small scale micro irrigation system in the greater Masaka.

Agriculture Minister – Vincent Ssempijja and Dr. Antonio Querido – the FAO Country Representative in Uganda, jointly launched the solar powered irrigation systems, last week.

The area has been prone to water shortage, especially during drought spells, affecting both domestic and commercial agricultural activities.

The system is, according to Dr Querido, part of FAO and government of Uganda’s efforts to build capacities of communities and farmers to cope with climate change and strengthen resilience of rural populations and agricultural production systems through provision of water for irrigation, particularly in districts vulnerable to drought and climate variability.

In Bugomola A, for instance, the Ugx260m solar powered irrigation project will provide water for the four-acre Lwabenge Integrated Group garden.

“Agriculture in the cattle corridor region of Uganda is rain-fed and highly dependent on local weather conditions. This means that farming activities have to be put on hold during the dry season.
“With the new sprinkles system, we are certain that farmers will have access to water for dry season agricultural activities,” said Dr. Querido.

The FAO boss noted further that the system will not only increase agricultural production and returns to small scale farmers, but will also improve living conditions of the rural population.

Minister Ssempijja commended FAO for ‘changing lives of my people,’ adding that the solar irrigation systems in Kalungu will serve as a demonstration of modern agricultural practices to small scale farmers.

The Minister exclusively told PML Daily that historically, the government had been more engaged in promoting large-scale irrigation for commercial farmers due to a limited understanding of the business cases for small-scale irrigation.

He said that access to irrigation will provide farmers with a more reliable income, since one farm can produce several yields a year.

“Many will be ready in three months, which means farmers can gather three or four harvests in a year,” he said.

FAO engineer Mr. Denis Besigye said solar was a great fit with irrigation, because on days when plants need the most water, ‘you get the most water out of the pump.’

The engineer advised farmers’ groups to advantage of the availaable opportunity ofsolar irrigation systems in their areas to change their lives as well as vigirously guarding the facilities against vandalism, noting that each facility cost FAO about Ugx 260m.

Josephine Namagga Muwanga, a member of the beneficiary group in Lwabenge-Bugomola said for tomato cultivation, timely irrigation was vital – cautining that even missing one day could severely affect the crop quality and yield. She said her group had depended on expensive diesel generators for irrigation – a scenario that presented one of the biggest challenges to the farmers.

The solar irrigation systems in Kalungu are some of such other similar projects under construction in 13 other districts in the cattle corridor.

In addition, other schemes such biogas construction are being done in the same area to support local communities.

In reference to Uganda solar water pumping report 2019, the ratio of cultivated area under irrigation to Uganda’s irrigation potential is lower than the Sub Saharan Africa average at only 0.5 per cent, whereas approximately 15 percent of the country’s surface area is covered by fresh water sources.

The land under irrigation in Uganda is almost exclusively under large-scale projects.

However, the national focus is increasingly shifting towards smaller projects, driven by a combination of demographics and rural realities.

Original Source: pmldaily.com

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Kiruhura and Kazo lift ban on milk sale

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Ban on the sale of milk has been lifted for two weeks under strict regulations

Kiruhura, Uganda.  Authorities in Kiruhura and Kazo districts have reversed the earlier ban imposed on the sale of milk. The two districts that are under quarantine following the outbreak of Foot and Mouth disease had banned the sale of animal products and the movement of livestock.

However, in a meeting held between the dairy farmers and district Foot and Mouth disease task forces of both districts, it was agreed to lift the ban on the sale of milk for two weeks but under strict regulations.

Kiruhura District Resident Commissioner Aminadan Muhindo says they have stopped traders who move from house to house collecting milk on motorcycles, but asked them to set up collection centres where farmers will personally deliver their milk.

Kiruhura LC V chairperson Rev Samuel Katugunda welcomed the partial lifting of the ban. He also asked the residents to respect the regulation.

He says the districts are facing an economic crisis because of the total quarantine.

Kazo District Veterinary Officer Richard Kiyemba says they have agreed with dairy farmers to continue selling the milk. He says they are faced with the challenge of unscrupulous people who smuggle livestock out of the district at night.

The quarantine in these districts has increased the smuggling of livestock and its products which is done during the night. Recently, a trader was arrested carrying animals in a Fuso truck heading to Kampala.

Emmanuel Kyeishe, chairperson Kiruhura district Framers Sustainable Development Association, welcomed the lifting of the ban on the sale of milk but warned that the task force is to blame for the widespread of the disease.

He asked the team to ask for reinforcement to boost their monitoring and implementation of the quarantine.

Original Source: THE INDEPENDENT

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Multi-billion cereal processing plant opens in Soroti

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Pela Agro- Processing Factory in Soroti.

Soroti, Uganda. Soroti City will be home to a multi-billion agro-processing business for cereals, thanks to Pela Commodities Limited, a new industry being established in Arapai industrial area.  

Pela commodities has already started laying its machinery in the area near Soroti Fruit Factory. It is expected to handle 18 types of cereals and be able to sort, clean and dry 36 metric tonnes of cereals per hour, according to Isaiah Langa, one of the directors of Pela Commodities Limited. He adds that the plant will easily process over 600 metric tonnes of cereals in less than 24 hours.

Langa adds that they intend to start with maize, soya beans, millet and sorghum produced by farmers in the areas of eastern and northern Uganda, and that their first priority is to improve the quality of grains in the country and open a market for Ugandan grains in the region and beyond.  The cereals currently provide staple food for more than 50 per cent of the population and incomes for rural households. 

Maize is intensely grown in the eastern Uganda districts of Kapchorwa, Mbale, Kamuli, Jinja, and Iganga, the central districts of Masaka and Mubende as well as the western districts of Masindi, Kamwenge, Kyenjojo, Kasese, Kabarole, while the production of finger millet is concentrated in Apac, Lira, Gulu, Kitgum, Iganga, Kamuli, Soroti and Tororo districts. 

“…for now, we want to ensure quality in the production of grains. We have acquired a toxin scrubber machine that will wash away aflatoxin in the grains. By July/August, the issue of aflatoxin will be no more in our grains”, he said. This pronouncement comes at the heels of a recent trade war between Uganda and Kenya arising from the quality of Maize on the Ugandan market. 

Kenya, the largest consumer of maize from Uganda stopped the importation of the crop on account that the levels of mycotoxins in the maize were above safety limits.

Amos Wekesa, a co-director of Pela Commodities Limited in Soroti says they made a decision to invest in Soroti because of the availability of land, which was offered to them by the Uganda Investment Authority, favourable weather conditions, availability of cereals and connectivity to South Sudan and Kenya markets. Wekesa added that the company is in the process of engaging farmers on how best to work to enhance production for the factory.

Annet Iyogil, a resident in Arapai welcomes the establishment of an agro-processing factory in the area with the hope that it will improve prices for the cereals. 

“We depend on cereals for survival these days. But the prices of maize and other foodstuffs are very low and unpredictable. If this factory sets a standard rate for cereals, that would really be good for us”, she said. 

The factory, worth five billion shillings is expected to start operations by the end of April. 

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