Museveni urges tea farmers to diversify production, pledges financial support

BUSHENYI, August 21, 2025 – President Yoweri Museveni has urged small-scale tea farmers across the country to diversify into other crops and reconsider their farming practices in response to falling global tea prices.

The President pledged substantial government support to the struggling sector, promising to secure a total of Shs 312 billion to revitalise the tea industry: Shs 46 billion for farmers, Shs 149 billion for factory owners, and Shs 112 billion to settle outstanding debts owed to nursery operators.

“We shall raise it, because I cannot see a sector dying when we are here. This is not a road; this is a productive sector, where you put in money, and get more money out,” Museveni stated.

He was addressing a large gathering of tea stakeholders at Bushenyi Main Stadium earlier this week, where he advised that farmers with small land holdings shift from extensive crops such as tea to high-value, intensive alternatives.

Museveni also called on tea stakeholders to conduct a study and submit a report to determine whether tea can genuinely be classified as a high-value, intensive crop. “I want this in writing so that I can confidently transfer tea from an extensive type of crop to an intensive one,” he said.

“I toured the country in 1995 and advised that if you want to escape poverty, focus on four key sectors: commercial agriculture, manufacturing, services, and ICT,” he said. He emphasised that agriculture, not government jobs, is the primary path to creating wealth and employment, especially for the youth.

He explained that land fragmentation had made large-scale tea farming unviable for many, encouraging those with four acres or less to adopt intensive farming methods, such as growing coffee and fruits, or rearing poultry, pigs, or fish.

“Tea should have been grown from the outset by people with substantial land,” Museveni noted, arguing that tea is a low-value crop, profitable only when grown on a large scale.

He attributed the fall in tea prices to a basic economic principle: oversupply. “Business is about demand and supply. If supply exceeds demand, prices fall,” he explained, citing global tea production of 6.6 million tonnes against demand of 6.2 million tonnes. He added that political instability in major tea-consuming countries such as Pakistan and Egypt had worsened the problem.

Museveni also responded to concerns over high electricity and fuel costs raised by processors, pledging to follow up and consider introducing a tax-free diesel programme for a temporary period.

Farmers Voice Concerns

Despite the President’s call for diversification, several farmers and industry leaders presented concerns and proposed solutions to sustain the tea sector.

Onesmus Matsiko, a tea farmer and former Chairperson of the Uganda Tea Out-growers Association [UTOA], noted that over 70 per cent of Uganda’s tea is produced by farmers who do not own processing factories. He called on the government to support the establishment of more farmer-owned factories and introduce regulations to enhance tea quality.

“Uganda has 36 tea processing factories, but only six are farmer-owned—and two of those are currently non-operational,” Matsiko said. “Most farmers grow tea and sell it to factories they do not control.”

He also highlighted Uganda’s low average export price of 85 US cents per kilo last year, compared to Kenya’s US$2.18 and Rwanda’s US$2.82. “If we could secure just two dollars per kilo, the industry could fund its own fertiliser. But as things stand, we are appealing for a fertiliser subsidy to revive the sector,” he said, urging the President to establish a fertiliser fund accessible to farmers.

Prof. Tarsis Kabwegyere, a tea farmer and former minister, proposed the creation of a national tea auction centre to reduce reliance on Kenya’s Mombasa Tea Auction, where Ugandan tea reportedly fetches lower prices.

“Why are we not regulating and selling our own tea directly?” he asked. “Beyond exporting raw tea, we can also innovate and produce items such as jewelry, oils, and medicines.”

Tea processor Hassan Basajabalaba raised concerns over the high cost of production, citing expensive electricity, unreliable power supply, and high fuel prices. He urged the government to negotiate better export tax incentives with key markets like Pakistan and China—similar to arrangements secured by Kenya and Rwanda.

“For example, Pakistan charges Kenyan imports only 50 per cent tax, while Ugandan imports are taxed at 100 per cent,” he said. “During the China conference, Kenya and Rwanda negotiated a 30 per cent tax discount, Uganda did not. We urge the government to secure similar trade benefits.”

Francis Runumi, a nursery bed operator, demanded that government pay the Shs 112 billion owed for tea seedlings supplied under the NAADS programme.

“These seedlings were verified. For instance, Kigezi is owed Shs 54 billion. Though we won a court case and received partial payment of Shs 39 billion, the Ankole sub-region has received nothing,” he said. “Mbarara supplied 188 million seedlings worth Shs 75 billion; Bushenyi, 12.6 million worth Shs 4.8 billion; Buhweju, 135 million worth Shs 54 billion; Kisoro and Zombo contributed as well—bringing the total to Shs 112 billion. If this debt is paid, farmers will be able to settle SACCO and bank loans.”

Frank Tumwebaze, Minister of Agriculture, Animal Industry, and Fisheries, reassured tea farmers that a regulatory framework for the tea sector is currently being developed and will be presented to Cabinet before the end of the year.

“We have already started drafting regulations on how tea should be managed. We are now finalising them with the Attorney General before taking them to Cabinet,” he said.

The event was attended by 374 tea stakeholders from across the country, including farmers, nursery operators, processors, Members of Parliament, local leaders, and Cabinet ministers.

https://thecooperator.news/tea-farmers-seek-shs-126bln-to-revive-industry/

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