In this dissertation, I intend to examine the possible reasons why the Teso Fruit Factory and the entire effort of promoting orange growing in Uganda have failed. My interest in the subject matter has been raised by the news reports that government has given green light for the factory in Soroti to be privatized and that earnest efforts are already underway to finding a suitable buyer/investor.
However for me to be able to set a stage for the reader to be able to appreciate my findings and reasons, I need to present to you a country in Africa that has been able to leverage on citrus orange growing ably for national development. This country is Egypt. Let us therefore first explore what Egypt has been doing correctly.
Orange growing in Egypt:
Currently, Brazil is reported to be the leading world producer of oranges, producing 35.6% of the world's output.
CountryWorld's output share in %
Brazil35.6
USA15.7
China14.4
India10.8
Mexico8.1
Spain3.4
Egypt2.9
Turkey1.8
Italy1.7
South Africa1.7
Source: https://www.worldatlas.com/articles/top-orange-producing-countries-in-the-world.html
Although Egypt ranks as number seven among the top orange producing countries in the world, the country has leapfrogged Spain in the recent years and has emerged as currently the world's biggest exporter of oranges, which accounts for around 80% of its total citrus production.
According to the US Department of Agriculture (USDA), Egypt is expected to retain this ranking, despite an almost 200,000t drop in exports to 1,45mn tons due to unfavorable weather conditions and their impact on production. Egypt's orange exports in the year 2021 were estimated to be worth US$843 million (Shs. 3.1trn)
The major importers of Egyptian oranges for many years have been Russia, Ukraine, United Arab Emirates, Saudi Arabia and Oman. Russia imports approximately 20% of its oranges from Egypt.
Types of Oranges grown in Egypt:
Navel and Valencia Oranges are the types of oranges grown in Egypt. Navel oranges (Mangada) are considered to be the world's finest oranges for fresh eating. This particular variety is very sweet and naturally juicy, easy to peel and segment easily to compliment fresh eating. Navel orange type is the early maturing variety of larger size than most others, with a deep orange color. Navel oranges are seedless, excellent for fresh eating but don't offer good juicing.
On the other hand, the Valencia Orange variety is what is most widely grown in Egypt for its sweetness and excellent juicing characters. This is the most sought after variety all over the world for eat and juice purposes.
Where are the oranges grown in Egypt?
Most of the area planted with oranges is in desert reclaimed lands, which account for 75% of the total area. Plantations in the Nile Delta region account for 25% of planted area. Growers prefer to cultivate oranges over other fruit types due to their high export demand and value as well as an established supply chain.
As it can be noted, Egypt is mostly a desert and sandy country. However, due to the farming ingenuity of the Egyptians, the farmers have been able to turn the Egyptian desert sand into a source of the orange gold that is contributing immensely to the economy of Egypt.
Lessons to be learnt:
The first and foremost compelling lesson that we should or we ought to have taken from the available global market information on orange growing is that the selection of the type of oranges that you are going to grow and promote to the farmers must be the correct one. Promotion and growing of an orange variety that has no appeal to the market is not an attainable effort.
Secondly, we must have noted that Uganda is an open liberal economy where no imports or exports restrictions are imposed on consumers. That being the case, consumers are free to choose what they prefer to consume. As we can aptly observe, the Uganda consumers prefer to consume imported oranges from Egypt, South Africa or Turkey. These oranges are of the Navel or Valencia varieties. The local lime oranges have been relegated to the roadside markets in the country.
Another compelling lesson we learn is that although the Teso Fruit Factory was set up with a hope that it would make the realization of the government policy on import substitution a reality by replacing the need for imported fruit pulp from Malaysia and India by the juice producing companies like Britannia and others, this hasn't been the case. The reason is that these companies have found the juice pulp made in Soroti not suitable for their consumers due to its high lime nature in it.
Efforts to promote Orange growing in Teso
It is reported that after several years of lobbying from the Teso local communities and politicians urging government to establish an orange factory in the areas that would be able to process the abundant indigenous oranges that the farmers were and had been growing in the areas from time in memorial so as to help them improve on their economic livelihoods, H.E, the President of Uganda directed that a fruit factory be established in Teso.
Under the auspices of the recently revived Uganda Development Corporation (UDC), efforts were undertaken to establish this factory at Arapai in Soroti. It was reported that the Korean Government through its development agency, Korea International Corporation Agency (KOICA) working with the government of Uganda agreed to set up this factory. The Uganda government was to contribute land, utilities and management while the Korean Government provided the funding of $7.4mn for the construction of the factory. A holding company called Soroti Fruits Limited (SOFTE) was established in which the government of Uganda has 80% and the local Teso orange farmers under their umbrella organization called Teso Tropical Fruit Growers Cooperative Union (TETFGCU) have 20% shareholding.
In 2019, the fruit factory in Soroti was commissioned by H.E, the President to a fanfare of the local politicians who felt that they had managed to brind real development to their people.
However, it seems this is when the real problems with the factory started and complaints from the local orange farmers from Teso started streaming in. The complaints were that the factory was not having adequate capacity to take up and process the garden fruit output of the farmers and that most of the farmers were not getting paid as expected. The other complaint was that the farmers were facing serious challenges with the fruit pests and the fruit fries that had invaded their gardens. While at the same time, the management of the factory was complaining of intermittent lack of sufficient quantities of the raw oranges to be processed and persistent thefts of the raw materials. It was reported that all this caused intermittent factory closures which affected the overall performance of the factory. It is reported that the government of Uganda being very eager to ensure that this factory performs what was expected of it, has been injecting in the factory Shs. 5bn each year since 2019.
Due to persistent complaints from the farmers and petitions to Parliament by some of the leaders from Teso, the Parliamentary Committee on Trade, Tourism and Industry headed by Hon. Mpaka Mwine embarked on an investigation in August 2021. On March 2nd 2022 in a sitting chaired by the Deputy Speaker, the Committee chair presented the committee findings and recommendations to the House. Some of the findings were stunning. It was reported that a whooping Shs.2.5bn was spent on the construction of a perimeter wall around the factory which was an inflated figure from the one that was initially quoted of Shs. 734mn by the same contractor. In summary, the committee faulted the management of the factory for gross mismanagement and the Minister of Trade was urged to clean up the mess. Since then, the same committee of Parliament is reported to have had several interactions with the people of UDC, the Ministry of Trade and other key stakeholders to try and find a stop to the woes of the factory and to be able to resuscitate it.
The recent news about the decision to privatize the factory is an indication that government now feels that after having exhausted all attempts to keep the factory running, time has come to have it go to a private investor.
This might be the only and wise option that government was left with. As it is said regularly that in business, one must know when to cut and let loose on your costs. This is the time that government feels that continuing to inject annually Shs. 5bn in a factory that is not serving the purpose for which it was sent up should be halted. This decision must be applauded!
However, the twist for me is not in the privatization of the factory, but rather in continuing to promote and encouraging the farmers to grow the wrong variety of oranges. Given the significant reasons advanced by the management of the factory in regard to unsuitability of the type of the oranges that are grown in the area as the raw material for the factory, one shouldn't fail to note that privatizing the factory is only a portion of solving the problem. If the type of the raw material grown for the factory is not sorted, it won't take the private investor a long time before falling in the exact predicament that the current management has seen them in.
It is common knowledge that in consumption marketing, demand can only be as good as the supply. If what you put on the market is not what the consumer desire, then you will automatically get issues with demand of your products.
Although, it sounds so benevolent and patriotic for us to be sticking or carry out an aggressive campaign to promote the indigenous types of lime oranges which our forefathers have grown locally in our areas for years, we must recognize the fact that the preference of the global markets have changed and have moved on. Due to the threats of food security on account of rapidly increasing populations that need to be fed, other ingenious methods of producing agricultural products have been discovered. These new methods have offered the world new and improved varieties of crops that are quick maturing in nature, resistant to crop diseases and are most times superior in quality. This is exactly what has taken place in the arena of citrus growing and particularly with the oranges.
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It is high time, the Ministry of Agriculture, Animal Industry and Fisheries (MAAIF) got the message and started on to fully and seriously utilize the NAGRIC crop Multiplication endeavor that was established at Kiige regional demonstration farm in Kamuli District. Kiige is a citrus demonstration farm that was set up by the government of Uganda in close cooperation with that of Israel during the Obote I regime. The Israeli agricultural experts stationed at the place had managed to establish a fully functioning Jaffa Orange demonstration and multiplication center. The intention was for the farmers from all the parts of the orange growing corridor in Eastern Uganda to be able to pick knowledge and plant seedlings from this farm to propagate in their areas. The idea was to replace the poor quality lime oranges that the farmers were used to with the Valencia improved type of oranges. These are the oranges that I have highlighted above as being the most sought after globally.
As we have been observing severally in many lectures by various leaders who have transformed their societies and countries, there are some serious and drastic transformational decisions that must be undertaken by the leaders. You can't be doing the same thing over and over again and still expect different results!
The leaders in MAAIF, NAADS and Operation Wealth Creation (OWC) must now start considering how to utilize the transformational knowledge that was acquired and reposted at Kiige as far as citrus fruit growing is concerned. We must be very concerned that a desert country like Egypt, utilizing the waters from River Nile whose source is in Uganda can be able to leverage those waters to not only transform their desert into reclaimable fertile agricultural land but, that they can also beat us hands down in the growing of commodities like oranges, potatoes, rice and maize which we have been growing in Uganda since time in memorial.
Soon, we shall be lamenting of how Egypt is becoming the Africa's largest exporter of Coffee! We must get out of our slumber now!
--- By Edward Baliddawa 22nd September 2023
