Uganda: Tobacco Company, Farmers in Stand-off

Source from:  New Vision  05/27/2013

Cigarette smoking may be harmful to your health but not to your pockets. Atleast that is what some 30,000 farmers from Kanungu district have found out after almost a year of their tobacco remains unsold affecting their everyday livelihoods.

The farmers represented by their chairman and local LC 3 chairman last week stormed the Ministry of Trade to have the Government intervene in a stand-off that has seen their employer, Continental Tobacco, slapped with an export ban leaving about 1,000 tonnes of tobacco leaf rotting.

The stand-off indicates the lucrative nature of the tobacco industry that is also facing a new affront from an impending tobacco control and use Bill that is currently in Parliament and may limit public use of tobacco.

Ishmael Tiborohanga, the chairman of the tobacco farmers, said they have gone  to the ministry many times attempting to find out why the company that sponsored them was blocked from buying their tobacco.

"We are requesting for help for our people so that their crops can be bought," said Tiborohanga, who was accompanied by Nelson Natukunda, the LC 3 chairperson for Kihiihi sub-country in Kanungu.

Tobacco firms usually give loans to the farmers in form of fertilisers, wood fuel and pesticides and they are bound by contract to supply the tobacco to their sponsors.

"We told them we cannot buy because we cannot export," said Morris Micheni, the Continental Tobacco administration manager, in reference to the missing trade license for export that the Ministry of Trade has withheld.

Continental concedes that there was an issue with the farmers in 2011 over unpaid tobacco bills.

But they have gone on to clear all the bills and received recommendation letters from all the districts of operation including Hoima, Kibaale, Arua, Koboko and Masindi.

The ministry has, however, insisted that Continental should pay interest accrued over the years since they first withheld payment to the farmers.

But Continental insists that while they have agreed in principle to pay the interest to the farmers, the matter should not be tied to their export business.

"Interest should not be tied to trade yet the same farmers are crying. If we buy the tobacco we cannot keep it here," said Micheni.

The permanent secretary in the Ministry of Trade, Ambassador Julius Onen, last week said they were scheduled to hold a meeting with the entire tobacco industry.

"Tobacco, like sugar, is regulated because it is a product that involves peasants who do not know their rights," said Onen. But it is not clear whether the meeting took place.

An exchange has now ensued in the media with CTL and its competitor, Leaf Tobacco, each taking to explain their position in the matter.

But the lack of action from the Government amidst the standoff against farmers and the tobacco companies once again indicates the failed arbitration role in this lucrative business.

Continental is suspicious that the whole ploy is being orchestrated by their competitors who wrote a letter on November 7, 2012, asking to buy tobacco from Continental that is in the store.

"Because of this manipulation, there is one player who wants to be left alone in the market," said Micheni. Enditem