Farmers, BAT to Share Losses Equally

Source from:  The Monitor (Kampala) Joseph Olanyo 04/06/2005

The British American Tobacco Uganda (Batu) will share equally the loss on the excess of unbought tobacco with tobacco farmers in Bunyoro area. The resolution is expected to end the current standoff between farmers and Batu over unsold tobacco. The resolution was reached jointly by Batu, the parliamentary committee on agriculture and the tobacco farmers. Early this year tobacco farmers in Bunyoro alleged that Batu had refused to buy off all the tobacco they had harvested. Batu on its part had argued that the company does not have a market for the excess tobacco. The matter was presented to the Parliamentary Committee on Agriculture. In a report titled: "Bunyoro Tobacco Marketing 2004 issues-Final solution" presented to the Parliamentary Committee on Agriculture on March 25, the Leaf Director British American Tobacco Uganda, Mr Glenn Stocks, said Batu will purchase the targeted volumes from those farmers who have not sold their target based on who have come forward on the petition. "The solution addresses farmer and company interests, taking into consideration overproduction, world market prices and demand, overall business performance, MPs and local authorities concerns and advice," Stocks told reporters on Friday last week at Batu offices on Old Port Bell Road. Batu called a press conference to communicate the outcome of the negotiations. Stocks said the move would bring to an end the current impasse. Batu will now buy an additional 384 tonnes over the estimated 680 tonnes agreed with the committee on February 25. This represents an additional 56.5 percent, which brings a total of 1,064 tonnes. "This is subject to eligible farmers according to Batu's analysis and criteria for selection, registered farmers according to input allocation and estimated unbought volume," Stocks said. The report also said that the farmers' petition had many inconsistencies and that some farmers were taking advantage of the petition. It said there were many unregistered farmers who had grown a lot of tobacco on their own. Stocks down played the feud calling it an "isolated issue". According to Batu records, the total tobacco production in Hoima and Masindi was 1,633,956 million kilogrammes. Only 154,444 kilogrammes was sold, 1,479,512 kilogrammes was not bought. The total target was 1,412,555 kilogrammes. Batu's Managing Director, Mr Glenn Sheppard, said the 2004 crop debt for the affected farmers will be reduced by 50 percent. "50 percent will be written off by BAT. Action plan on unbought 2004 tobacco production is agreed by all parties involved hence issues regarding 2004 crop will be closed," Sheppard said. While the controversies seem to have been put to rest, it is not clear whether the farmers under their umbrella association of Bunyoro Tobacco farmers Association are taking the solution seriously. The association has again taken the issue to court. In their suit filed on March 22 at the Commercial Court, the farmers are seeking a court order that Batu compensates them for tobacco grown during the 2004 season. Dr. John Odit, the Chairman Parliamentary Committee on Agriculture, said "it is regrettable that the farmers have taken the matter to court". As Batu prepares to embark on tobacco buying season, which starts on April 6, the company says it is going to identify and monitor illicit excess tobacco. Batu's Head of Corporate and Regulatory Affairs Mr Jimmy Kiberu said eligible tobacco would be bought to ensure transparency of the process. Kiberu said the presence of foreign matter in tobacco exports remains the leading challenge to recover the world's export markets and restoration of integrity of the exports. He said foreign matter like metals, plastics, stones, grass and leaves undermines tobacco's foreign earnings, which fetched in excess of Shs42 billion as of last year. "We will work ethical with Batu's registered farmers to produce a high quality crop, which improves their standard of living and 100 percent loan recovery," he said. In 2004, Batu grew tobacco in 14 districts across the country and contracted 82,000 small-scale farmers. The company distributed interest free loans for inputs worth Shs8 billion and bought 34.6 million kilogrammes of tobacco. Enditem