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Company gets Shs16b tax break to import rice

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A rice grower at Doho rice farm . A row is brewing between Trade minister Amelia Kyambadde and rice growers over allowing a single firm to import rice from Tanzania tax-free. PHOTO/FILE

A row is brewing between Trade minister Amelia Kyambadde and rice growers over allowing a single firm to import rice from Tanzania tax-free, a move other players say disadvantages them and frustrates the growing of rice in the country.
The Rice Association of Uganda (RAU), as a result, has sent a protest note to Ms Kyambadde, questioning the logic behind the ministry’s decision to allow a single firm to import 50,000 metric tonnes of rice from Tanzania without paying taxes.

The complainants argue that if the decision of the ministry was to allow importation of rice from Tanzania, it should have been open up to whoever is willing to engage in the business.
The importation of the cheap (tax-free) rice is hurting the rice growers, they  say.
The ministry issued an import permit to Ms Gotovate Uganda Limited on July 15.

The ministry also worked to ensure that the firm got a tax waiver which allowed it to bring in the rice without paying VAT and withholding tax. The import permit is valid until December.
The rice farmers say Gotovate Uganda Limited and Mansoor Mohamed Kayondo, to whom some of the documents related to the rice imports are addressed, were not known as players in the rice sector until then. By press time, we were unable to reach Mr Kayondo, to whom the documents directed to Gotovate were addressed.

“I find it odd that (the Ministry of) Trade would be soliciting from (the Ministry of) Finance an exemption for an importer. It is the trader’s job to solicit and not the minister,” Ms Rachel Mbabazi, the chairperson of RAU, told Sunday Monitor on Thursday afternoon.
Ms Mbabazi also thinks the decision is a contradiction of the “Buy Uganda Build Uganda” (BUBU) policy that the Ministry of Trade has been promoting as a means of boosting local consumption and increasing household incomes.
She has now penned a letter demanding that Ms Kyambadde explains herself.

In the letter, dated September 3, a copy of which Sunday Monitor has seen, Ms Mbabazi questions why Ms Kyambadde took the unilateral decision to allow the importation of rice on concessional terms without first consulting other stakeholders.
“If we had been asked to offer an opinion, we would have surely explained the harm in such an action. I would, therefore, like to request for enlightenment regarding the conditions under which a single company was granted a stay of application on 18 per cent VAT,” Ms Mbabazi wrote.
The Commissioner of External Trade at the ministry, Mr Emmanuel Mutahunga, declined to discuss matters around the concessional permit.

“That is a high profile matter that would require the minister herself. Please get in touch with her,” Mr Mutahunga said.
By press time, our calls to minister Kyambadde’s known mobile telephone number went unanswered. She also did not respond to text messages. It is estimated that least $4.5m (approximately Shs16.72b) in taxes, which should have been collected by the Uganda Revenue Authority (URA), has been lost as a result of the tax waivers.

Sector reeling
Ms Mbabazi says the rice, which was imported under the arrangement and clearly labelled “Islamic Relief Rice” ,has flooded the market, displacing locally produced rice.
Mr Venugopal Pookat, the managing director of Kibimba Limited, formerly Tilda Uganda, told Sunday Monitor that locally produced rice can hardly compete with imported rice because it comes in on the cheap.
“We have tried to reduce the prices as much as possible but we still cannot compete,” Mr Venugopal said.
This has placed actors in the sector in jeopardy at a time when they are struggling for markets due to the effects of the Covid-19 pandemic.

“Because of this (flooding of tax-free rice on the market) farmers are forced to store their paddy hoping for better prices in the future. It is not only our local farmers who have been affected,” Ms Mbabazi writes.
She hastens to add that it is not only farmers that have been affected by the cheap tax free rice.
“This has also led to a reduction in business for local millers. The entire rice industry and the livelihoods of nearly three million people who depend on smallholder production is in distress because of this decision,” she adds.

Long standing war with Tanzania
Mr Phillip Idro, the chairperson of the Rice Millers Council of Uganda, told Sunday Monitor that most rice farming communities, for example those in Nwoya and Bulambuli districts, have since opted to grow other crops, especially fruits and vegetables until rice from Tanzania stops coming in.

Mr Idro said this incident is the latest in a long standing fight that local business people have been having with their counterparts in Tanzania.
In 2018 Tanzania banned Ugandan sugar on its market on grounds that Ugandan sugar producers were importing cheap sugar from Kenya and Brazil and repackaging it for export to Tanzania.  It then imposed a 25 per cent excise duty on sugar that had been exported by Kakira Sugar Limited. The sugar was later returned to Uganda.

Now Mr Idro says the fight over rice came up in around 2017, when Ugandan millers sought to import paddy rice from Tanzania, but the Tanzanians insisted on selling milled rice, which the local millers rejected opting to import from Pakistan.
“We proposed to have a quota slapped on imported rice from Tanzania, but Ugandan officials abandoned us. We are now on our own yet, the Tanzanians will not negotiate with us because we are not in government,” Mr Idro said.
URA QUIET
Speaking to Sunday Monitor by phone on Thursday, Ms Mbabazi said the only way the situation in the sector can be normalised is by levying taxes on the rice.
“All that we are saying is that the tax should be levied on the rice. If they pay VAT and withholding tax, it will bring them back on a level playing field with the rest. They should pay tax for whatever had come in earlier,” Ms Mbabazi said.
She said  this was drawn to the attention of URA during a September 18 meeting, but that the tax body is yet to respond.
On Thursday afternoon the manager of public and corporate affairs at URA, Mr Ian Muhimbise Rumanyika, promised to revert, saying he was yet to get clarification on the issues, but he had by press time not done so.

**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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