By Nelson Mandela Muhoozi
Tea farmers have expressed mounting frustration over the delayed sh40b government fertiliser bailout, a critical intervention meant to revive the struggling tea industry.
The Uganda Tea Outgrowers Association (UTOA), led by Onesmus Matsiko, has voiced concerns over the stalling of the fertilizer program amidst the onset of rains in key tea-growing regions.
Matsiko recounted the series of setbacks that have plagued the government’s intervention.
“The Cabinet resolution promised fertiliser supply for the last March season, but it never materialized. We then pinned our hopes on the September rains, but again, there’s been no progress. I haven’t heard any updates in nearly a month,” Matsiko lamented.
The 50% subsidy scheme, devised at the end of 2023, has become untenable due to the prolonged delays according to Matsiko.
He explained, “A farmer earning between sh150 to sh200 per kilogram of tea cannot afford to contribute 50%. The government should boldly provide a sh40 billion grant for one season with a token cost-sharing of 25%, payable on credit.”
According to Matsiko, the financial distress among tea farmers is palpable.
He said many have been forced to abandon or uproot their gardens due to plummeting farm gate prices of green tea leaves, which have dropped to sh150 per kilogram from sh200 at the beginning of the year and sh250 last October currently in some cases, plunged to sh120 per kilogram.
Matsiko emphasized the dire need for financial support to purchase fertilizers, which are essential for the survival and revival of the tea industry.
“If we receive sh40b, each farmer could buy fertilizers for one season to rejuvenate their gardens. Currently, most tea gardens are overgrown and of poor quality. Fertilizers are crucial for farmers to re-engage in tea cultivation,” he stressed.
He warned that without government investment, many tea factories could face closure due to a shortage of tea supply.
Mbonigaba William, a tea farmer, reiterated Matsiko’s worries.
He said, “My bewilderment is, government invested heavily in seedling distribution -providing over 500 million. That probably should translate in 1 million more acres at a huge financial outlay and related costs. Why should all this be lost now? Just like there was no plan to go all the way from the beginning!”
He added, “Hypothetically, 1 million acres of land was put aside, prepared and planted with tea – 500 million seedlings. Is all this effort ‘going down the drain’ without a whimper? If this does not bother what will?”
The uncertainty surrounding the government’s response has only exacerbated the farmers’ woes. During the International Labour Day celebrations in Fort Portal City, President Museveni downplayed tea as a high-value crop for small-scale farmers, categorizing it instead as a large-scale agricultural enterprise, which stance has left tea farmers in a precarious position.
In addition, farmers said nothing has yet come out from a recent bid for relief when they petitioned Parliament for financial assistance.
Kabarole District Chairman, Richard Rwabuhinga who presented a petition signed by several farmers to Speaker of Parliament Anita Among, highlighting the farmers’ plight.
“We are drowning in debt,” Rwabuhinga said, his voice laden with worry. “The price of tea leaves hasn’t increased in years, while the cost of fertilizers, pesticides, and labor has skyrocketed. We can barely break even.”
Rwabuhinga underscored the broader economic impact, stating, “Government intervention is imperative to prevent the loss of employment opportunities, foreign exchange earnings, and potential foreign investment. The tea sector’s collapse would also negate previous government investments through NAADS (National Agricultural Advisory Services) and OWC (Operation Wealth Creation).”
Tea farmers have also called for government collaboration with UMEME to connect all factories to the national grid and offer favorable tariffs to reduce power costs.
Additionally, they urged the Ministry of Finance to expedite the release of outstanding VAT claims and extend the period for settling any tax arrears.
They also said they need working capital to enable tea investors to secure affordable loans from the Uganda Development Bank (UDB) and the swift implementation of a comprehensive tea policy.
“A tea policy would address green leaf and processing quality issues, thereby enhancing the global market value of Ugandan tea,” Rwabuhinga noted.
Uganda’s tea industry
Tea was introduced in Uganda in 1900 and commercialized by European and Indian settlers. In 1945, the Ugandan government developed tea plantations through the Uganda Development Corporation, which were later sold to private investors.
The 1966 Act of Parliament promoted small farmers, leading to the formation of the Uganda Tea Growers Corporation, financed by the government with World Bank funds.
Tea is one of the 12 priority commodities in Uganda’s National Development Plan III (NDP III).
Currently, tea is grown on approximately 49,000 hectares, with around 70% managed by outgrowers.
Despite its challenges, the industry remains a significant contributor to Uganda’s foreign exchange earnings. For instance, tea exports generated $96.5 million in 2018, rising to $112.7 million in 2022.
However, due to global price drops, earnings fell to $60.7 million in 2023, underscoring the urgent need for government support.
With 41 tea processing factories nationwide, the tea sector is a major source of employment, supporting about 1.2 million at the national level.
Tea farmers said they are at a critical juncture, and their future hinges on timely and decisive government intervention.
