14 March 2002

Uganda: Cocoa Sales Could Dwarf Coffee

Paul Wasswa, the managing director of Kiwa Industries, has embarked on the restoration of one of the largest cocoa farms in East Africa.

The farm, located in Nkokonjeru, covers over 250 acres. It was established in the 1950s by Yafesi Magulu.

The venture was supported by the then Cocoa Project under the Ministry of Agriculture, which provided pesticides and pumps for spraying pesticides.

In 1998, cocoa processing and marketing functions were transferred to the Coffee Marketing Board (CMB). The Board did not support the farmers and consequently, the cocoa industry was adversely affected.

According to John Muwanga Musisi, the coordinator of Cocoa Development Project (CCDP), the farm used to produce about 60 tonnes of cocoa annually.

The vast plantation fell into neglect after Magulu's death in 1999.

"The plantation was leased from one of our brothers by a Russian called Janis Barodis. We sued for annulment of the lease. Court ruled in our favour," says Wasswa.

When Janis abandoned the farm, thick undergrowth took over.

In June last year, Wasswa and his brother Livingston Nsubuga, began the restoration of the farm to its former glory.

"It had turned into a bush. We employed 22 workers to weed out unwanted plants, prune and spray the cocoa trees with pesticides," Wasswa explains, "The price of cocoa has increased greatly. Cocoa trade is now a lucrative business."

Currently a ton of cocoa fetches $1480 (about sh2.5m) on the international market, while the most talked about coffee gets $516 per tonne.

Coffee accounts for more than 80% of the county's export earnings, about 42% of GDP, and 80% of the labour force. There has been a decrease in the volume and value of coffee exports due to low prices on the global market and the coffee wilt disease.

A total of 2.91 million bags of coffee worth $164.7 were exported during the 1999/90 coffee year compared to 3.65 million bags valued at $282.2 million exported in 1998/99.

This represents a decrease in volume and value of 20.2% and 41.6% respectively.

Nonetheless, Wasswa is not deterred.

"We have spent sh10m on restoration. We need sh30m to complete the work on the farm. I am sure the restoration of the farm will be complete by the end of this year," he says. "Government should subsidise cocoa growers. The cost of pesticides is high. Pumps for spraying pesticides are scarce and costly."

A pump costs sh1.4m

Wasswa says, after improvement, the farm will produce over 40 tons of cocoa.

There are 8450 farmers in Uganda growing the crop on approximately 12,000 hectares of land. Uganda produced 3700 tonnes of cocoa last year. Many farmers in Mukono told Business Vision they have reverted to cocoa growing. They say the rising prices are an incentive for cocoa.

Mukono is one of the leading cocoa and Robusta coffee growing areas in the country.

Like other coffee growing areas, their plants have been attacked by the coffee wilt disease. Its infestation is estimated at 3% of the total 240,000 hectares under Robusta in Uganda.

Farmers say cocoa is not as prone to diseases as coffee. Besides, cocoa does not require much weeding. This enables farmers to grow other crops.

Although cocoa is not a major export, its contribution to the country's Gross Domestic Product (GDP) has been increasing since 1990. Its exports were worth $500,000 in 1990 and increased to over US 700,000 in 1993.

The Government is encouraging farmers to grow cocoa. The Cocoa Development Project (CDP) established to facilitate cocoa growing got sh300m in the financial year 2001/2002.

"The project has distributed more than one million seedlings to over 1600 farmers in Uganda," reveals Muwanga, "We hope production will increase from 3700 to 4200 tonnes.

However, boosting production is difficult in such a short time. Further, the absence of processing plants to transform cocoa into various products, hampers the farmers progress.

Some officials in CDP argue that government is not giving the cocoa industry enough support.

The CDP got sh300m under the strategic intervention scheme while the coffee industry was given sh6b.

According to researchers at the Cocoa and Coffee Research Institute (CORI) Uganda has a strong comparative advantage in contrast with other cocoa producing countries.

"Cocoa is likely to be our major export earner in the near future because the wilt has destroyed many coffee farms," predicts Wasswa. "Its price is also motivating."

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