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Dairy farmers struggle to find market for their milk

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Preservation. Workers offload milk for chilling at a cooler owned by Nyamitsindo Dairy Farmers Cooperative Society Ltd in Mbarara District in February last year. PHOTO BY ALFRED TUMUSHABE 

Majority of the cattle keepers in Ankole and some parts of central Uganda have over the last three decades been investing heavily in dairy farming.
This involves clearing land of thicket and removing plant species that cows do not feed on in order to allow the right pastures flourish.
The farmers in this endeavour have to dig valley dams to ensure cows drink adequately. Farmers also have to acquire, breed and nurture cows of high milk yield. The cows have to be sprayed against ticks and other external parasites at least once a week to guard against diseases such as east coast fever and babesiosis.
They have to be dewormed and injected at least every three months to check internal parasites and diseases. These are basic practices that farmers producing high quality and large volumes of milk have to do.
The revolution in dairy farming has resulted in high production of milk against the low domestic and fragile foreign markets.
Mr Ephraim Rwehooda, a farmer in Sanga Town Council, Kiruhura District, is one of the cattle keepers that abandoned traditional long horned cattle for exotic breeds. He milks 300 litres for sale every day.
“I cannot keep on my farm a cow that produces less than 10 litres,” says Mr Rwehooda.
Kiruhura alone produces 1.2 million litres of milk every day, which is about 60 per cent of milk produced in the entire country, according to the LC5 chairperson and farmer, Rev Samuel Mugisha Katungunda.
During peak production (normally the wet season), the price of a litre of milk at the farm goes down to Shs300. Mr Katugunda says the cost of producing a litre of milk is about Shs600. “Shs300 a litre is nothing to a farmer. The minimum price should be Shs1,000; we are putting in quite a lot, about Shs600 is invested in producing one litre. Farmers are frustrated, some have started rearing cows for beef,” says Mr Katugunda.
The Kiruhura Farmers Sustainable Development Union chairperson, Mr Emmanuel Kyeishe Mwesiga, says milk from Kiruhura accounts for 45 per cent of Uganda’s milk exports but the farmer are not happy with the pay. He says the cost of producing a litre of milk is at least Shs500 and argues that it does not make economic sense when the price is below this amount. Farmers sell milk through their primary cooperative societies, some sell through middlemen, who sometimes collect milk from the farm and a few others sell directly to the processors.

Business dynamics
Ultimately, all the milk ends up in the hands of processors. The processors buying in Kiruhura, Mbarara and Isingiro are from Brookside Dairy Ltd, Pearl Dairy Farms Ltd, Jesa Farm Dairy Ltd, Amos Dairies Uganda Ltd, GBK Dairy Products Ltd, and Lakeside Dairies Ltd.
They make UHT milk, yoghurt, Casein, ghee and Lato Milk, among other products, which they sell in the local and international markets.
“Farmers are not involved in determining price, it is the processors that decide; we think they set the price jointly, we (farmers) take what they determine for us. We have decided to form this union to bring together farmers and be able to address the issue of price and market,” says Mr Kyeishe.
The manager of milk procurement at Lakeside Dairies Ltd in Ruti Mbarara, Dr Ronald Bamundaga, says all the processors in the area are buying a litre at Shs600 at the plant. He says a farmer is given less than Shs600 (currently Shs300) because middle men and other players incur costs of chilling the milk and transport before it reaches the processor.
“There is a boda boda man who picks milk from the farm to the collection centre, that one will deduct something, there is truck that will transport milk from the collection centre and take it to a cooler, that will also deduct something. A lot of money is lost along the chain,” says Dr Bamundaga.
He says currently Lakeside, which has intake capacity is 150,000 litres every day, is operating at 30-40 percent (45,000 to 60,000 litres) because Kenya, which has been their major export market, banned milk imports from Uganda.
Amos Dairies Uganda Ltd in Kiruhura, reportedly did not receive milk on Wednesday because of breakdown of the factory machines.

Ban on exportation
Kenya government banned milk products from Uganda (by Pearl Dairy Farms Ltd and Lakeside Dairies Limited) in December last year claiming they are sold cheaply and have flooded their market.
“As we talk now, all processors including us (Lakeside) are not operating fully or have shutdown operations because of closure of lack of market. Over 70 per cent of what we process is exported; we sell to South Sudan as well but the market is very small,” says Dr Bamundaga.
He says the tax in Tanzania, at TZS2,000 per litre, is very prohibitive and that Rwanda is already producing and processing enough much milk. He says they are exploring DR Congo market.
“The local market is very poor, consumption of milk is very low, domestic market takes only 12 per cent of what we collect, here (in Uganda) there is no culture of consuming milk,” says Dr Bamundaga.
Mr Frank Twine, a middleman in Kiruhura Town Council, on Wednesday said they were stuck with milk. “All coolers around are full, those transporting to factories have not come for two days now, we have stopped collecting milk from farmers,” Mr Twine said.
Efforts to get comment from Pearl Dairy Farms Ltd were futile. The company general manager, Mr Bijoy Varghese, did not answer our calls or reply our text message. However, no serious activity was taking place at the company.
Mr Eric Rutahigwa, a farmer in Mbarara producing about 1,600 litres a day, has called on government to intervene. “The government should come in and ensure farmers get a fair price for milk,” says Mr Rutahigwa.
Speaking at Nshwere Church of Uganda in Nyabushozi Kiruhura district on Christmas last year, President Museveni said low price of milk had been brought down by surplus production. He said Kenya which had been market for Uganda’s milk is equally producing a lot of milk because they received a lot of rain though it (Kenya) had always been a dry area.
Mr Museveni, however, advised farmers to remain optimistic saying the prices will become normal.

Remedy
During the NRM/NRA 34th victory celebrations in Ibanda Municipality on January 26, Mr Museveni said three approaches of; market integration in Africa, promoting internal consumption and ensuring production of quality products, would be used to address the issue of lack of market for milk, maize, sugar, and cement.

Source: Daily Monitor

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Moderate rain, dry spells in parts of Uganda expected

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ICPAC has predicted moderate rainfall for this week (September 20-27, 2022) for parts of the Greater Horn of Africa including Uganda.

ICPAC is a Climate Center accredited by the World Meteorological Organization that provides Climate Services to 11 East African Countries.

“Moderate rainfall (50-200mm) expected over western South Sudan, parts of southern Sudan, most parts of Uganda, Rwanda, central Ethiopia, and northern Somalia,” ICPAC stated in their weekly forecast for September 20-27, 2022.

ICPAC says one millimetre of rain is equivalent to one litre of rain per square kilometre.

The forecast is also predicting wetter than usual conditions expected over most parts of southern Sudan, northwestern South Sudan, northern Ethiopia, northern Somalia, northern and southern Uganda, and Rwanda.

Drier than usual conditions are predicted over parts of western Uganda, north-eastern South Sudan, central Ethiopia, and isolated parts in central Somalia.

At the same time, light rain is expected over parts of some countries in the Greater Horn of Africa. “Light rainfall (less than 50 mm) expected over southern Sudan, eastern South Sudan, Burundi, coastal Tanzania, central to western and eastern Kenya, central to southern Somalia, Djibouti, Eritrea, and parts of northern and southern Ethiopia,” ICPAC stated.

In addition, dry conditions are expected over northern Sudan, parts of northern and eastern Kenya, and most parts of Tanzania.

Original Source: New Vision

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Sugarcane farmers abandon fields due to lack of markets

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While the sugarcane sector has the potential to empower stakeholders along the value chain, farmers have abandoned their fields for other income-generating activities, writes YUDAYA NANGONZI.

Currently, sugar production has declined amidst increasing demand from consumers and fluctuating prices, with the majority of millers operating below capacity. In a study conducted by the Economic Policy Research Center (EPRC) on the sector, Dr Swaibu Mbowa, the lead researcher, attributed the massive exodus of cane growers to lack of markets and a decline in cane prices while other farmers have already replaced cane with food crops.

The increasing levels of poverty in cane-growing districts have also forced farmers to rethink the crop. In Uganda, about 29,000 farming households engage in cane production with an estimated 640,000 labourers. More households took up the business between 2012 and 2021 with at least 40,000 households, at one point, growing cane between 2005 and 2021.

“By the time we collected data in November-December 2021, this number had declined to about 29,000. This indicates that 28 per cent of out- growers had abandoned cane growing, with the highest attrition rate (33.8%) occurring in the Busoga sub-region,” Mbowa said.

This implies that one in every three cane farmers in Busoga has abandoned the business. Currently, Busoga has 20,474 growers while 10,475 stopped growing cane. In the Buganda region, the research shows that there are 4,394 growers and 522 farmers out of the business. In Bunyoro, 367 farmers joined other activities, leaving 3,801 active growers.

Mbowa presented the daunting figures at the recent 10th national Forum on Agriculture and Food Security held at Sheraton hotel in Kampala. The forum was organized by the EPRC in collaboration with Michigan State University and the International Food Policy Research Institute under the auspices of the Food Security Policy Research, Capacity and Influence.

Themed “Revisiting Policy, Institutional and Regulatory Arrangements in Uganda’s Sugarcane Sector”, the forum intended to stimulate debate on how to strengthen and improve the implementation of the sugarcane policy and regulatory frameworks to foster sustainable transformation in Uganda.

“MILLERS FAILING FARMERS”

Worldwide, sugar factory ownership is a mix between the government and the private sector. For Uganda, ownership is largely private with the government owning a lesser stake in the Atiak Sugar factory after selling its shares in Kinyara Sugar Factory in 2017.

This arrangement, farmers argued, has forced many to collapse as millers suffocate the sector. As of 2020, there were 33 licensed mills, with a combined milling capacity of 71,850 tonnes per day.

However, by December 2021, only 12 mills in the study sub-regions were operational and out-growers sold more cane to mainly established large millers who have disproportionate power over sugarcane price determination.

Mbowa noted that existing millers acquired new licenses in different jurisdictions to forestall other players from establishing milling plants in the same area. This could explain why there are fewer operational mills than those licensed.

The negative free-fall in sugarcane prices worsened the situation. For instance, a tonne of cane that cost Shs 175,000, Shs 162,000, and Shs 135,000 in Buganda, Busoga, and Bunyoro in 2017 has since dropped to Shs 95,282, Shs 92,782, and Shs 97,907 respectively.

Speaking to The Observer on the sidelines of the forum, a cane out-grower and director of the sugarcane value chain at Operation Wealth Creation, Kabakumba Labwoni Masiko, agreed that prices are illogically fixed by millers.

“We may look at millers as competitors in business but it’s not the case during price determination. Unlike in the past when millers would negotiate with farmers or their association, today, you find the price fixed on their notice board. Surprisingly, cane is the only crop where prices don’t vary much across the country. What does that mean?” Kabakumba asked.

Due to the price inconsistencies, some farmers have been forced to cut the cane for other activities since millers were also taking longer to buy it at fair prices.

“Today, there’s scarcity of cane. Millers are looking for cane in vain and that cyclical nature of operation by hurting farmers is catching up with them and the entire sugar sector,” she said.

The farmers also faulted millers for infiltrating their organization to ensure that they remain weak and the introduction of cane harvesting permits has created a black market for them, especially in Buganda to the detriment of farmers.

The manager of Kayunga Sugarcane Outgrowers Cooperative Society, Semeo Mugenyi, urged the government to regulate how far millers can go in expanding their nucleus to reduce competition with farmers.

“The primary role of an investor is to give economic opportunities to the local people. If the investor takes half of the supply, then it limits potential farmers on their supply,” Mugenyi said, adding that without a sugar mill managed by farmers as promised by President Museveni, cane farmers will continue to be exploited or exit the sector.

RECOMMENDATIONS

The study findings call for urgent discussions among government and sector stakeholders on the future of the sugarcane sector. In particular, the study points to the need for the constitution of the sugar board, as recommended by the Sugar Act 2020 to oversee the sector. Mbowa said the inclusion of out-growers in the cane sector is “the primary means by which it can contribute to increases in rural farm household incomes, food security, and rural employment in cane-growing areas.”

To date, the 2010 Sugar Policy and the Sugar Act of 2022 are not operational. David Kiiza, a senior industrial officer at the ministry of Trade, said the government has made strides in organizing the sector but remains constrained by inadequate funds.

“We wrote to stakeholders and they sent us their nominations but the ministry of Finance said it has no money for setting up the board. They [Finance] told us to make a supplementary budget of Shs 2bn [to set up the board] but they have told us to wait. Most likely, the money will be availed in the next financial year,” Kiiza said.

He added: “The ministry of Trade has already held a meeting with millers and we plan to schedule one for the out-growers and later meet them all in one meeting to agree how to set up the board as we await funds from the government. By the end of this year, we expect the Act to be reviewed.”

In the meantime, Kabakumba urged the traditional big millers to graduate into the production of refined industrial sugar as Uganda has brown sugar in surplus. This would provide the much-needed market for the farmers of sugarcane as well as more employment opportunities for small millers dealing in brown sugar.

Source: The Observer

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Hailstorm destroys community school, gardens in Isingiro

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Isingiro, Uganda. Residents of Rugaaga, Kashumba sub counties, and Kabingo town council in Isingiro district are counting losses following a heavy hailstorm that destroyed their gardens. The hailstorm that affected more than 300 homesteads also destroyed a community school and houses on Tuesday.

Kenneth Kaunda, the headteacher of Noah Community School said that the rain that started at 4:00pm, de-roofed three classroom blocks and the school’s administration block.

Kaunda says that he is now planning to call the PTA and school management meeting over the matter.

Warren Matiibita a resident of Katungye cell said he has lost 16 acres of banana plantation to the hailstorm and this leaves him worried about how he will manage to pay his loan and school fees for his children. Matiibita says that he has been collecting at least 100,000 Shillings from 100 bunches every two days.

He also says the hailstorm destroyed gardens of beans, cassava, and maize.

Steven Mwesigye, the chairperson LCI Katungye cell said about 320 households were affected by the hailstorm in his village and seven houses were destroyed.

He said that the hailstorm hit at a time when the area is experiencing a dry spell.

Medius Kenkanja, another affected resident said that she lost one and a half acres of cassava and eight acres of banana plantations, and a house leaving her stranded with her eight children. She pleaded with the government for help.

Alone Turahi, the Isingiro LCV chairperson said that they have asked the District Production Officer to compile a comprehensive report on the extent of the damages caused by the hailstorm.

He said that the District Disaster Management Committee has a small budget of less than five million shillings and can’t afford to assist the affected families. Turahi said that they will write to the Office of the Prime Minster requesting relief food for the affected families.

Anita Atukwase, an environmentalist with Save the Nature in Isingiro district says that there is rampant deforestation and poor farming practices in the area.

Original Source: URN via The Independent

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