Uganda tea farmers frustrated over delayed US$107.93M government fertilizer bailout 

UGANDA – Uganda’s tea farmers have expressed frustration over the delayed UGSH 400 billion (US$107.93M) government fertilizer bailout, a crucial intervention designed to revive the struggling tea industry.  

The Uganda Tea Growers Association (UTOA), led by Onesmus Matsiko, has raised concerns about the stalling fertilizer program amid the onset of rains in key tea-growing regions. 

Matsiko lamented, “The Cabinet resolution promised fertilizer 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.” 

According to Matsiko, the 50 percent subsidy scheme devised at the end of 2023 has become untenable due to prolonged delays.  

He explained, “A farmer earning between US$0.040 and US$0.054 per kilogram of tea cannot afford to contribute 50 percent. The government should boldly provide a UGSH 40 billion (US$107.93M) grant for one season with a token cost-sharing of 25 percent, payable on credit.” 

Matsiko emphasized the financial distress among tea farmers, noting that many have been forced to abandon or uproot their gardens due to plummeting farm gate prices of green tea leaves.  

Tea prices have dropped to US$0.040 per kilogram from US$0.054 at the beginning of the year and US$0.067 last October, and in some cases, have plunged to US$0.032 per kilogram. 

He stressed that financial support would provide the necessary resources for buying fertilizers, which are essential for the industry’s survival. Matsiko warned that without government investment, many factories could close due to a shortage of tea. 

“The government is to blame for the situation farmers are facing. Why allow people to join the sector without regulation? Factory owners also need to be blamed for buying poor-quality green tea leaves from farmers,” he said. 

The Tooro Sub-region leads in tea production, accounting for 39 percent, followed by Ankole at 29 percent, Kigezi at 12 percent, Buganda at 12 percent, and Bunyoro at 9 percent.  

Small-scale farmers, who supply fresh tea leaves to processing plants and contribute about 46 percent of the total production, dominate tea production. 

The number of tea factories in the country increased from 28 in 2015 to 33 in 2022, with five owned by smallholder farmers.  

Between 2008 and 2022, the government supported tea farmers with 563 million tea seedlings. Currently, tea is grown on approximately 49,000 hectares, with around 70 percent managed by outgrowers. 

Despite its challenges, the industry remains a significant contributor to Uganda’s foreign exchange earnings. In 2022, tea exports generated US$112.7 million, up from US$96.5 million in 2018.  

However, due to global price drops, earnings fell to US$60.7 million in 2023, underscoring the urgent need for government support. 

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