How wetland ban has affected rice growers

Over the last couple of months, the price of rice has more than doubled, thanks in no small part, to countrywide shortages occasioned by the government’s ban on rice growing in wetlands. 
The ban followed years of uncontrolled encroachment, with farmers draining entire swamps in order to grow more rice. Such was the damage that 30 percent of the country’s wetlands was lost across 23 years. 

The government said it was left with little choice but to order farmers out of wetlands dotting the sub-regions of Busoga and Bukedi. The price to pay for saving what was left of this essential part of the country’s environment and its sensitive ecosystem, allowing for the slow regeneration of affected marshlands to begin, has been a drastic drop in in-country rice production.

Price hikes soon followed. Rice imports, mainly from Tanzania, have not been able to bring in enough to cover the shortfall, meaning whatever little is grown locally or imported now goes for a premium. 

Recently, rice farmers, exporters and millers petitioned the Speaker of Parliament to stop the government’s eviction of rice farmers from wetlands in favour of foreign investors.
Mr Isaac Kashaija, the chairperson of the Rice Business Sector Association Limited (RBSAL), said the local farmers are in a hopeless situation.

Mr Simon Peter Bumba, a rice farmer in Budaka District, said the ban has wide-ranging effects such as “our children dropping out of school due to lack of school fees.” 
He added: “If we are growing rice in wetlands and [the] government thinks we are not doing it the right way, then we need to be guided on the best modern farming practices of growing rice.” 

This reporter visited some of the traditional rice-growing areas in Butaleja and Budaka districts to get a sense of things in what was only recently a thriving, if not booming, business. 
At Nampologoma Trading Centre in Mazimasa Sub-county, Butaleja, most of the mills were closed due to lack of rice to mill. Ditto neighbouring Pallisa District.
It is said that some mill owners have laid off most of their workers to cut costs, while others simply closed shop due to low production capacity. 

“Thousands of farmers have been evicted from the rice fields. Millers no longer get enough rice to mill, forcing them to lay off some workers,” Mr Simon Peter Balikowa, a rice dealer, said, adding, “I have been employing about 80 people, both those operating the machines to sort rice and others in packaging, loading and offloading. But I was forced to remain with 30 workers only.” 
Before the ban, Mr Kashaija said, Ugandan growers produced at least 160,000 metric tonnes of rice from lowlands (wetlands) and 68,000 metric tonnes from the uplands. 

High prices
Annual demand for rice in Uganda, according to the RBSAL chairman, currently stands at around 380,000 metric tonnes. It is no surprise then that high grade rice (locally known as super) now averages Shs6,500 for a kilogramme. 

But it is not low production alone responsible for high prices. There is also a complaint about taxes. According to RBSAL, more than 6,000 small millers have, over time, been established countrywide in the rice trade. Earnings of over 400,000 farmers were guaranteed and had increased. 

In one report, RBSAL indicates that Uganda had developed a 10-year strategic plan (2008-2018) through which to triple rice production from 177,000 to 680,000 metric tonnes of unmilled rice. That dream may now not be met following the ban.

The report notes that upland rice growing accelerated the transformation of northern Uganda with the area under cultivation increasing from 5,000 to 65,000 hectares from 2004 to 2014. 
In June 2014, Value Added Tax was introduced on domestic rice and yet imports were exempted from the levy. This affected local millers and farmers. Production of rice stagnated as imports rose to 98,981 metric tonnes from the 11-year average of 56,421 metric tonnes.

“The essence of such international or regional transactions are that in the event that our local stock runs out, we know where to turn to,” Mr Steven Masiga, a researcher, told this publication before expressing regret that some middlemen in Uganda are conniving to make rice more expensive at home by hoarding and doubling prices.

Ideally, rice farmers should be happy about the increase in prices, according to Mr David Mulabi, a community development expert. But the windfall accruing from the enforced shortages may not always trickle down to them.
“Unfortunately, farmers don’t get the benefit of this price increase,” he said. “Farmers get half of this price. The rest is hogged by middlemen, who invest little yet earn more in a few days [of business].”

Himself a rice grower in Butaleja, Mr Mulabi proposes that the government “enables farmers to get direct access to markets without middlemen.” This, he adds, will increase incomes of farmers while also enabling them to “invest more in farm inputs, capital equipment, processing, packaging, distribution, et cetera.”
He further notes, “I don’t think rice growing has stopped in the east. The discussion is still ongoing. The President has indicated that some districts in the east, such as Butaleja, will be exempt from the wetland use ban for now due to historical mistakes as a solution is being found.”

Climate change hasn’t, as Mr Mulabi concedes, helped matters. Rice production has been affected to the point that Mr James Wire, an agribusiness consultant, admits Uganda is now a net importer of the starchy grain.
“[Tanzania] transformed the entire value chain of the rice sub-sector; right from production all through processing to market access,” Mr Wire noted. “In Uganda, the rice sub-sector is still run in a ragtag manner right from the farmer to the consumer.”

According to him, there are Ugandan individual farmers, growing whatever varieties they want to grow, and upon harvest, irresponsibly dry the rice. He further explained that Tanzania’s well-developed system of collective production, processing and marketing has stood it in good stead.

Unfair taxation
Elsewhere, discriminatory and unfair taxation of rice importers by the Uganda Revenue Authority (URA) is another factor cited as affecting production. According to Mr Kashaija, 57 of the 73 rice companies in Uganda have been put out of business due to unfavourable taxation. He cited the VAT (Amendment) Act 2014, which provides for levying of 18 percent VAT on imported white milled rice, but which he said selected companies had been exempted from.

Mr Isa Hasahya, a rice grower in Mbale, also raised concerns over the government’s allocation of 16,000 hectares of wetlands to selected rice companies yet the National Environment Management Authority (Nema) had evicted small-scale farmers.

The above concerns have affected an agricultural enterprise, which has mixed reviews in the east. For most small-scale farmers, it is back-breaking work, and yet returns have historically not matched effort.

Mainly one variety of kaiso rice is grown and because of poor yields and lack of good after-harvest processes, the rice grown here cannot compete with imported rice from Tanzania and elsewhere.

A kilogramme of kaiso at farm gate prices in Butaleja averages Shs2,000. At the retail end, a kilogramme brings in double that amount.
Traders from neighbouring Kenya sell rice husks at only Shs3,000 per sack. The husks are then processed into animal feed, which finds its way back into the district at Shs6,000 per kilogramme.
Poor post-harvest handling and inadequate capacity for value addition means the grassroots are not profiting.

Ms Madina Namudira, a rice farmer, says they continue to be exploited because sometimes they cannot even keep their produce for long when pressing matters arise. 
“We get loans from banks and businessmen and they pay as low as Shs1,500 a kilo at the time of repaying the loans.”
Mr Fredrick Okello, a rice trader, complains about lack of space to dry rice and sufficient storage. 
“We don’t have tarpaulins to dry out rice. We don’t have anyone to help us to start branding our rice for a good market, “Mr Okello said.

Adding value
Butaleja’s Environmental Officer Tom Wandera, says, “Each farmer sells their own rice at their own time and quantity, and this affects their bargaining power since no large scale trader is willing to start tracing small farmers. This gives opportunity to small traders and middlemen to take charge and manage prices.” 

He said given the comparatively large volumes Butaleja has historically produced, if rice farmers were organised like banana farmers in western Uganda and sold through one body, then things could change.

“Value addition is another missing aspect. Fully processed rice with low foreign material, high percentage of whole grain and well packaged and branded attracts better prices than merely removing husks that most local millers do,” he said.
Mr Juma Tumwesigye, a rice dealer, also sees the potential inherent in rice as a business. But this potential will be realised only if deliberate actions are taken. 

“The rice industry has potential for economic multiplier effect and agro-based industrialisation. For example, processing centres, packaging, logistics, processing of rice residues into cooking briquettes. All of this can bring increased economic activities and incomes to Butaleja. But all these need well-thought-out pro-people plans,” he said.

Despite this potential, especially given the existence of Doho Rice Scheme (said to be among the largest in the country) which was established here by the government in the 1970s, former Bunyole East Member of Parliament Moses Nagwomu Musamba recently said the level of poverty in the district stands at 89 percent.
The district production office reports an estimated 65,000 kilogrammes of milled rice coming out every year, which makes the average poverty levels worrisome, according to local leaders.

Butaleja is an agricultural district where rice growing is the major economic activity. The grain is both a food and cash crop.  
Doho sits on more than 2,500 acres of land and has 9,000 farmers involved as both outgrowers and part of the scheme growers. But poverty persists.
With the uncertainty following the government’s wetland ban, and the internal weaknesses described above, the district’s future, like in other rice-growing enclaves in the east, hangs in the balance.