ARUA, Uganda: The Sun’s heat in the compound of West Nile Growers Cooperative Union in Arua is enormous, but on the ready is a team of Uganda Revenue Authority officials (URA) who are on the ready to collect tax from the scores of trucks moving out of the union gates with tons of tobacco leaf.
Government is hardening on the tobacco business by yearly increasing tax on tobacco, but according to what TheCooperator discovered, the huge returns from the sale of tobacco is not going to bother farmers with tax slapped on them.
Last year Uganda earned over shs18 billion from tobacco sales, making it one of the highest crops to fetch such amounts of revenues, according to URA.
Tobacco beat major export crops such as coffee, tea, and other commercial produce.
Though the British American Tobacco Uganda that left the country after saying dealing in the leafy tobacco was more volatile, the new entrants are yet to complain.
The West Nile Cooperative Union Chairman, Mr. Tom Anguyo said there is still rift even after the exit of BATU. Anguyo said as a union, they felt left out when the giant multinationals like BATU decided to deal directly with the farmers.
“As a union, our role was to link the farmers to the buyers. But when BATU decided to deal directly with them, leaving us out, this caused a rift, because we, as a union earns a commission from the sale,” said Anguyo.
He noted that dealing directly with farmers tantamounted to unfair competition.
When BATU left, they announced that they were ceasing buying tobacco leaf from farmers to concentrate on their cigarette business. They now relocated to Nairobi, though they still purchase from Uganda.
Anguyo said after BATU left, a new player, Alliance One International (AOI), took over from BATU. He said Global Leaf Pool (GLP) Ltd, which has been buying the leaf from BATU, now purchases from AOI. BATU has been the biggest exporter of tobacco in the country.
Moses Itukebo, the Union Manager said so far they have over 9,000 farmers.
He said currently the price of tobacco, TO1 (Top Orange), that is considered the best, goes for between shs6,800- shs8,000 while TO2 goes for between shs4800- shs5800.
Others like the MO1(Middle Orange) and M02 goes for between shs3,800- shs4,000 depending on availability. At the gate, the trucks are charged shs750 per kilo of each tobacco leaf by URA. “These guys collect cash from the buyers. Each truck can earn the URA around shs15m,” said Itukebo. He said over 10 trucks leave their Go- Down stores each day. He said as a union, they earn close to shs8b annually from tobacco.