By Nelson Mandela Muhoozi
Crop production state minister Fred Bwino Kyakulaga said during an engagement organised by the East African Tea Trade Association recently at Africana Hotel in Kampala, that the Government is committed to supporting the tea sector.
He reiterated the Government’s commitment to supporting the tea sector and acknowledged the various challenges confronting tea traders.
The meeting aimed at soliciting support for the Uganda tea industry in their current crisis. Already, about nine factories out of 41 have shut down and others operating in under capacity.
However, Kyakulaga cautioned actors in the tea value chain to be mindful of quality as it is the underlying factor affecting the export of tea.
As the Government seeks a lasting solution to the deteriorating prices of the cash crop, he told actors in the value chain that 70 per cent of the current tea sector crisis arises from quality issues.
But he also acknowledged that the ongoing crisis is attributed to a combination of factors, including quality, fluctuating global demand, and increased competition from other tea-producing nations which exert pressure on Ugandan farmers.
Amidst the challenges ahead, he said there is optimism that with strategic interventions and collective action, Uganda’s tea industry can overcome its current crisis and once again flourish.
“There is hope that if Uganda improves on the quality of her tea, there will be a ready market,” he said, adding: “The tea producers have requested for a bailout of sh126.2b to ease the industry crisis.
And government is looking into this request, and the detail is that we hope to help the producers through the Agriculture Trade Facility so that they can be able to access financing at six per cent, as opposed to 12 per cent which has been the case for all the agriculture financing related interventions”.
However, he said the farmer is a big stakeholder in solving the tea crisis because the matters of quality lie mostly in the hands of farmers.
The crisis is global
East African Tea Trade Association (EATTA) chairperson Arthur Sewe said the crisis is not unique to only Uganda, but that it has been felt among all the other tea-producing countries.
However, he said that Uganda’s problem is a bit unique since it is mainly based on the quality of the final product.
“The quality of Uganda’s final product is not matching with the much-required quality of the final product at the Mombasa Tea Auction,” he said.
Charles Kibandi, the general manager at Venus Tea Borkers Ltd, Kenya, said the South Sudan political conflict has to the biggest extent also contributed to the outcries of the players in the tea sector since a good quantity of Uganda’s teas are bought by South Sudan.
“From May last year, that is when we started seeing Uganda’s tea prices drop sharply, this being attributable to the fact that South Sudan went into war,” he noted.
In addition, Kibandi also noted the issue of non-tariff barriers (NTBs), saying there is a need for the governments of Kenya and Uganda to dialogue on this issue since it is affecting the traders in terms of the cost of operation.
“NTBs like bonded warehouses for non-Kenyan teas are discriminatory and add to the operation costs thereby reducing their gains of the sector players. There is a need for inter-governmental dialogue in order to forge a way forward on this issue,” he said.
The chairperson of Uganda Tea Association (UTA), Gregory Mugabe, noted during the meeting that he is happy that now everyone in the sector is ready to move in the same direction ‘as we seek to combat to the current crisis’.
“We sought intervention from our neighbours in EATTA, a voluntary organisation bringing together tea producers, buyers (exporters), brokers, tea packers, and warehouses so that they can give us insights on how we can best handle the tea crisis in Uganda,” Mugabe said.
George Omuga, the EATTA managing director, emphatically spoke about the need for the use of fertilisers.
He said the more you harvest the tea, the more the soil is replenished.
“Absence of fertilisers has also affected the quality of Ugandan teas and we advocate for a government fertiliser subsidy programme to ensure farmers get access to affordable fertilisers as this is critical to the quality of the tea leaf,” he said.
The sector proposed a sh41.2b fertiliser grant to enhance quality.
According to players, the price of fertilisers is too high for tea farmers to break even. They said that in the last four years, the prices have increased from sh70,000 to sh245,000.
Revenue from tea subsector
The sector contributes in excess of $150m (about shillings 578.550 billion per year in revenue for the country, and is currently a source of employment, household income and livelihood for over 1.2 million Ugandans, and directly employs close to 100,000 people.
LEAD PHOTO CAPTION: Crop production state minister Fred Bwino Kyakulaga cautioned actors in the tea value chain to be mindful of quality as it is the underlying factor affecting the export of tea. Photo by Nelson Mandela Muhoozi
