Tea farmers in Uganda have called on the government for a UGX 126 billion bailout to save the struggling sector from potential collapse, as declining global tea prices force some farmers to abandon their plantations.
Onesimus Matsiko, the Chairman of the Tea Outgrowers Association Uganda Ltd, made the appeal to Parliament’s Trade Committee, emphasizing the urgency of the situation. He warned that many farmers risk losing their properties, which were used as collateral for loans, if no intervention is provided.
“We urge Parliament to instruct the Microfinance Support Centre to allocate UGX 31.5 billion to finance tea outgrowers. This funding would enable farmers to remain productive, supplying green leaf while they await revenue from the tea cycle,” Matsiko stated. This request accounts for 25% of the total UGX 126 billion required to stabilize the sector.
Matsiko revealed that half of the proposed funds would be used to buy green leaf, 50% of which is supplied by outgrowers. He cautioned that without this financial boost, several tea processing factories might face foreclosure due to mounting debts.
The association also pushed for the swift implementation of a Tea Policy to establish regulatory standards and improve the quality of Uganda’s tea. Matsiko highlighted that Ugandan tea earns less than $1 per kilogram internationally, compared to over $2 in Kenya and $3 in Rwanda, due to substandard quality and weak regulation.
To address these issues, the farmers urged the Uganda National Bureau of Standards (UNBS) to enforce quality standards for green leaf. This would compel processing factories to purchase only high-quality tea, potentially raising the market value of Ugandan tea.
Another critical proposal was the introduction of fertilizer subsidies to help rejuvenate struggling tea farms. The association suggested a phased approach, starting with a 75% subsidy in the first season, followed by 50% in the second season, and 25% in the third. The total estimated cost of this initiative is UGX 41 billion.
Furthermore, the association requested additional support for upgrading outdated machinery in tea factories, noting that aging equipment negatively impacts leaf quality and reduces farmers’ earnings.
Members of Parliament expressed concerns over the government’s delayed response to the tea industry’s crisis. MP Mbwatekamwa Gaffa (Igara East) criticized the government for its inaction amid rising fertilizer costs. Gorreth Namugga (Mawogola South) underscored the absence of a comprehensive tea policy, which she said has hindered consistent government support.
However, MP Elijah Mushemeza (Sheema South) commended the farmers for bringing their plight to Parliament, recognizing the global nature of the challenges affecting Uganda’s tea industry.
