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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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Uganda’s coffee industry eyes new markets, value addition

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But the country still has a lot of coffee that is still being dried on the ground

Kampala, Uganda  Uganda’s coffee industry will seek new international market for their products to reduce over concentration on traditional buyers to boost farmer’s income.

Coffee is the country’s second biggest source of foreign exchange after tourism and provides a living for around 8 million people or about 19% of the population.

“In 2017, stakeholders in the coffee industry discussed the coffee road map on how to accelerate production but also increase income to the farmers,” said Emmanuel Niyibigira, managing director of the regulator, Uganda Coffee Development Authority.

“They were concerned that we need to have value addition for our coffee but also have the demand. We are looking at some markets such as China which has 1.4billion people and it is an emerging market. We are also looking at Middle East, Maghreb region, Eastern Europe though now we have this conflict (between Russia and Urkaine) and also the Balkan states.”

Uganda exports most of its coffee to Italy, Germany, Algeria, India and Sudan.

Niyibigira, who was speaking during the Agribusiness Mkutano 2022 at Mestil Hotel in Kampala on April.28, said the regulator is looking forward to supporting   local coffee businesses for value addition including soluble coffee processing plants.

He said the government aims to ensure that the country has at least two soluble coffee plants in the next five years. He said UCDA and the Uganda Development Corporation, a government investment arm, are carrying out a feasibility study to ascertain its viability.

The country has 38 registered coffee roasters although the government’s plan to have a soluble coffee plant has been on the table since 1994.

“We are also looking at branding our coffee. Most of our coffee is being exported and blended with other coffees due to its good aroma. We need to be recognized as an origin of Ugandan coffee,” Niyibigira said, adding that it is unacceptable that countries including  India, Vietnam and others in Latin America, which also produce huge volumes of coffee, import Ugandan coffee beans especially Robusta  only to blend with their coffees to boost  aroma and  fetch premium prices on the international market.

Niyibigira, however, noted that the industry still faces some challenges.

“We still have a lot of coffee that is still being dried on the ground,” he said, adding that low bean sizes, low productivity as well as pests and diseases are being addressed with new coffee varieties.

Tony Mugoya, the executive director at the Uganda Coffee Farmers Alliance said as the country pursues value addition in the coffee industry, farmers should be able to sale their products to the highest bidder.

“Uganda is a free market economy and us as farmers, we shall give our coffee to anyone who offers the highest price. That is all we want,” he said. “So the more the people or companies in the market, the more competition and the better for us.”

The government has in past weeks faced opposition over its move to exclusively grant Enrica Pinetti-owned Uganda Vinci Coffee Company to purchase and export the country’s coffee.

Mugoya said as the country embrace value addition, they should be aware of the existing tariff and non-tariff barriers in the international market.

Joseph Nkandu, the executive director of the National Union of Coffee Agribusiness and Farm Enterprises (Nucafe) said value addition in coffee need to be in the entire value chain.

“Farmers need to own the value addition component beyond the farm level as it enhances their income,” he said.

Nkandu said countries such as Uganda striving to embrace value addition need to enter into partnerships in targeted markets so that the product is easily accepted.

Martha Wandera, managing director at Kimco Coffee Ltd said the government should probably consider setting up a production plant for production of packaging materials for processed coffee to lower coffee prices  stimulate local demand.

She said also suggests that the costs of accessing quality mark be reduced to encourage coffee producers to access the services.

Uganda’s coffee export volumes and earnings has consistently grown over the past 20 years and accounts for 7% of the world’s production.

Last year, farmers exported 6.49million 60 kg bags of coffee worth US$629.8million compared to 5.36million 60kg bags in the 2019/2020 season worth US$512.22million in the previous year.

Source: The Independent 

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Uganda losing agricultural advantage to neighbours – UN.

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Although women are mostly involved in agricultural production, when it comes to marketing of produce, it is the men who dominate the decision-making.

What you need to know:

  • Speaking during the Agribusiness Mkutano (conference) in Kampala, Dr Dmitry Pozhidaev, the United Nations Capital Development Fund country and regional head, said before the 2000s, Uganda was ahead of all East African member states in terms of agriculture productivity, but Rwanda and Kenya have since become superior.

Uganda is losing its agricultural productivity advantage to neighboring countries due to lack of sufficient development in the sector, according to the United Nations Capital Development Fund.
Speaking during the Agribusiness Mkutano (conference) in Kampala, Dr Dmitry Pozhidaev, the United Nations Capital Development Fund country and regional head, said before the 2000s, Uganda was ahead of all East African member states in terms of agriculture productivity, but Rwanda and Kenya have since become superior.

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“Uganda has lost the agricultural productivity advantage [it held] over Rwanda in the early 2000s. It now lags behind Kenya and is much more behind South Africa,” he said, noting that because of low productivity, a number of people have moved to other sectors of economy yet they have low absorption capacity thus exacerbating unemployment.

Dr Pozhidaev also noted that since the 2000s, productivity in the services sector has doubled while that of manufacturing continues to fluctuate.
Under the National Development Plan II, government had sought to realise a 2.2 percent annual increase in agricultural productivity and increase in labour productivity by 40 percent.
However, this has not been achieved, thus frustrating the fight against unemployment in a country where 600,000 youth annually enter the job market.
Therefore, Dr Pozhidaev said, there is need to develop targeted policies, knowledge sharing, skill development and financing of improved agricultural productivity is to be achieved.

The Agribusiness Mkutano under the theme: Uganda@60: Fulfiling the agro-industrialisation agenda for Uganda seeks to reconginse the entire value addition chains as an important player in the fight against unemployment and industrialisation.
Ms Mona Muguma Ssebuliba, the aBi chief executive officer, said there is need to ensure that farmers access credit and grant to improve productivity.
For instance, she noted, aBi was playing a key role in supporting agribusinesses actors in coffee, dairy, cereals, horticulture, oil seeds and poultry value chain to increase their capacity to produce large quantities and quality commodities as well as supporting them with a number of processes to sufficiently supply both the local and international markets.

In the coffee value chain alone, Ms Ssebuliba said, aBi has in the last three years invested Shs17.7b to promote agro-industrialisation with specific interventions seeking to support establishment of coffee hurlers, coffee washing stations and capacity building to access international and niche markets.

Original Source: Monitor

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Tsetse flies invade Kiruhura district

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Tsetse flies spread nagana in livestock.

Kiruhura, Uganda. Kiruhura district has been invaded by tsetse flies with the residents calling for government support to eradicate the pests that have seen several cattle in the area die.

Nyabushozi County Member of Parliament, Wilson Kajwengye raised the matter of national importance during a plenary sitting on Tuesday, 03 May 2022 chaired by Speaker Anita Among.

Kajwengye said that for the past five years, cattle farmers in Kiruhura have borne the burden of fighting tsetse flies, whose cost he said was exorbitant and discouraging to commercial cattle farmers.

“Unfortunately, we have lost the battle because the disease is chronic and cows lose weight. The Ministry of Agriculture, Animal Industry and Fisheries has intervened but minimally,” said Kajwengye.

He said that an estimated 100,000 herds of cattle have been affected by the diseases caused by the flies.

Kajwengye said Kiruhura has registered notable financial loss resulting from the decline in milk and beef production.

“It is estimated that the district has lost Shs26 billion and Shs15 billion from sales of milk and beef respectively,” he said.

He prayed that the Ministry of Agriculture should urgently procure and distribute tsetse fly traps saying they are easy to use and are environmentally friendly.

Kajwengye also asked government to urgently provide equipment and other necessary laboratory consumables to Kiruhura district veterinary laboratory, which he said would help improve surveillance.

He also appealed to the ministry to work with the Ministry of Trade, Tourism and Antiquities to carryout studies on tsetse fly control measures that would include development of an appropriate acaricide that kills tsetse flies.

Speaker Among said she received similar reports from residents during her recent visit to Kiruhura and asked the Agriculture Ministry to urgently assess the disease burden in the district.

“I think what you need to do is to send a team there to assess the level of the damage that has been caused,” she said.

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