Stakeholders trade blame as tea crisis deepens

As the tea value chain continues to suffer setbacks aggravated by falling tea prices at the Mombasa Auction Centre, a cross-section of stakeholders in the Green Gold Trade have turned guns against individual processors and middlemen, accusing them of being the force behind the crisis.

Uganda's tea industry has suffered a major blow from low prices since July 2023, with farmers getting as little as Shs100–150 per kilogram.

Although the falling prices have been attributed largely to several factors, such as instability in the tea-consuming countries and low quality of green leaf due to high production costs, some individuals say they have been let down by private players, especially on the processing end.

Some of the people this website spoke to in the Bushenyi tea growing zone on Wednesday accused private processors like Global Village Tea Factory, run by politician and businessman Hassan Basajabalaba, of adding salt to the existing injury by exploiting farmers with lower prices and laying off hundreds of employees.

Mr. Nicolas Ajuna Kafurembe, a tea farmer in Kakanju sub-county, Bushenyi District, while speaking to the Monitor on Wednesday said private players have used the crisis as an opportunity to trade cheaply to the detriment of already stressed tea growers.

“Our farmer-led factory is struggling to pay us. We last received money three months ago because the factory is trying not to collapse after using the available money to meet operation costs. However, private players are exploiting fellow farmers at the lowest prices because they know these farmers are desperate. This is not good for our industry in terms of sustainability,” said Mr. Ajuna.

In Bushenyi District, farmer-run factories buy a kilo of green leaf from farmers for Shs300–350, whereas factories run by individuals pay farmers between Shs150 and Shs200, which stakeholders say is not healthy for the industry.

The Igara Growers Tea Factory's acting General Manager, Mr. Robert Nayebare, said while they pay a higher price to sustain the business and avoid exploitation of farmers during the crisis, private players have taken advantage of the situation.

“In our efforts to foster quality, we are trying to pay better prices to farmers, but our private counterparts don’t consider quality. Unless we address the issue of quality, we are not about to settle,” he told this reporter.

Mr. Edward Mpabwa, the Kyamuhunga town council representative in Bushenyi District, noted that as much as everyone is calling for quality improvement for purposes of sustainability, private players have maintained a closed-door policy and have many times been cited for abuse of the law.

“The law here is selectively applied in the sector. They don’t subscribe to labour laws, and their books are not audited on top of refusing to do taxes and NSSF deductions for their staff,” he revealed.

While responding to the accusations, the Global Village Tea Factory deputy general manager in charge of green leaf mobilisation and customer care, Mr. George Arinaitwe, denied the accusations, saying the counterarguments were insincere.

“First of all, who has audited our books to conclude that we are operating illegally? We have our URA and NSSF deductions. Other people are not comfortable that we have survived the crisis and are moving forward. Their failure to pay farmers and keep in business shouldn’t be blamed on us,” he noted, adding that they are also struggling to stay in business.

“We have sat down as management and made some reforms to keep them running. We have cut prices, laid off workers and sent them on leave, and cut the cost of raw materials to survive,” Mr. Arinaitwe added.

The ongoing tea crisis has left the industry struggling to keep afloat, with some farmers in Kyamuhunga, Bitooma, and Nyabubaare sub-counties choosing to uproot their tea plants in areas to diversify and plant other crops like bananas, which the farmers hope will offer better prices and provide food.