Kalangala Oil Palm Growers Trust to pay out 1.4bn.to Farmers

Thursday July 7, 2011

FOR the first time since the BIDCO oil palm out-growers started harvesting in May 2010, this last April 2011 we paid out sh100m as gross sales, the Kalangala Oil Palm Growers Trust (KOPGT), manager, Nelson Basaalidde has said.

“In May, 2011 we again paid the out-growers sh133m. By the end of the year as the gross sales increase, we project about sh1.4billion would be paid to the farmers compared to last year’s sh690m,” he added.

Currently, the total number of farmers’ (households) with mature oil palm trees is 250 (350-hectares). KOPGT has 1,173 farmers were 399 (34%) are females and 774 (66%) males.

KOPGT was registered in 2005 and started planting oil palm seedlings in 2006. The first harvest fresh oil palm fruit was in May, 2010.

Speaking to the Business Vision in the field, Basaalidde said that their target is developing 3,500-ha under palm oil. “Presently, we have 2,080-ha under palm oil.”

“The government has assured to get us another 1,420-ha in the second phase. We are certain of clocking more than 4,000-ha. BIDCO has 6,500-ha. In total, in Kalangala district we shall surpass 10,000-ha,” he disclosed.

Basaalidde said that on average, most out-growers have 2-ha under oil palm. “But some farmers have more and can manage up to manage 10-ha.”

KOPGT pays out-growers after a deducting 33% from their gross sales to service the advance. The month of May farm gate price was sh398 per kg while at the beginning of this year it was sh368. The farm gate pricing mechanism depends on the dynamics of crude palm oil world wide.

“The Minister for Agriculture, Animal Industry and Fisheries (MAAIF) appoints the technical pricing committee. The pricing is based on import parity. If the price falls internationally especially in Malaysia and Indonesia, the farmers get less,” explained Basaalidde.

At the inception, the parties comprising of Uganda government, BIDCO and KOPGT signed a tripartite agreement that puts down guidelines on the running of the project. The government of Uganda gets the credit extended to the out-growers from the IFAD.

BIDCO’s obligation is to establish the nucleus plantation which is the source of palm oil technology and providing market for all the fruits. The government is soon embarking on the second phase of oil palm out-growers in Buvuma district.

Basaalidde noted that they are faced with shortage of labour, land shortage and fertilizers. “Fertilizers are imported not processed in Uganda.”

Research in oil palm growing in Kalangala, Bundibugyo, Jinja, Mukono and Entebbe began in 1970s early by Ministry of Agriculture sponsored by Food and Agriculture Organisation (FAO) under two doctors Kibirige Ssebunnya and Patrick Wetala.

“The results revealed the best suitable areas were Bundibugyo, Kalangala, Mukono, Entebbe and Jinja. The oil palm research in Uganda indicated that 18 to 20 metric tonnes per hectare, per year the optimum yield in 7-years. Now, its 6-years, but farmers are reaching the optimum yield. Our researchers were spot-on,” said Basaalidde.

“The government wanted to invest in Bundibugyo, but the insecurity that was prevailing at that time was not conducive to set further the project,” he further added.

“Yet, at the same time, Kalangala local leadership was very positive wanting to take up the project. People in the island district had seen the trees being growing and at the same time had extracted oil from the experimental plantation,” Basaalidde explained.

After the approval of the project to start in the district, KOPGT with a staff of 22 is a leading agency was formed to mobilise, register, survey land, teach agronomic practices, distributes farm inputs like seedlings and fertilizers, and provide road infrastructure for the out-growers. Without fertilizers, the yields will be low. Every year, five interns are taken on.

In Africa, Nigeria is the leading oil palm grower followed by Ghana, Ivory Coast, DRC, Burundi and Cameroun. Uganda is starter, but with a big potential and fourth after DRC. The African oil palm tree is from West Africa, but Asia did more Research and Development.

Kalangala Oil Palm Out-Growers Trust.

Samuel Kiggundu an out-grower from Kizira village, Kayunga parish, Mugoye sub-county has about 12-ha, but his aim is to acquire maximum 35-ha of land.

“I started with 2-ha in March 2006 and used the advance or loan to buy 2.5-ha of land. I employed family labour. In the same year, I put all the hectares under oil palm,” he explained.

“Then in 2007, I bought 5-ha using the 2.5-ha advance and planted it. In December, 2010, I planted other 2-ha. Since then, as a family we have been maintaining our oil palm plantation,” said Kiggundu.

Like other out-growers, the Kiggundu’s family had their first harvesting in May, 2010 beginning with 30kg, then in August 800kg, October 1,000kg and December 2,000kg. From January to April 2011, as yields increased, they garnered between 2.5 to 3.0-metric tonnes (MT) per month and in May it was 4.0MT.

Currently, Kiggundu earns sh1.5 to sh2m per month. His aim is to have a minimum of sh20m per month from the 12-ha by 2012.

From the oil palm proceeds, his children now attend one of the best schools in the district, Lake Victoria Education Centre. Kiggundu admires to see his children reach university and at least acquiring a master’s degree as a minimum qualification.

At the same time, he is putting up a new permanent house and expects to buy a vehicle and also set up a modern livestock farm.

Ewulaliyo Nabbossa another farmer from Njoga village started with 1.0-ha, but now has 2-ha under oil palm oil. She is yet to plant other 2.5-ha. But has plans to acquire another 1.0-ha.

She is so mesmerized to be earning sh0.5m per month. “Me, a peasant woman of a low class, I cannot believe that I’m able to earn that amount of money after loan deduction.”

Before venturing in oil palm growing, Nabbossa was growing sweet potatoes and earning sh150, 000 from 0.5-ha.

Nabbossa is now able to pay school fees for her three children. She has also stocked all the construction materials, bought land at the lakeshores and cows. This July, she will begin to construct her house.

Both farmers noted that they are faced with shortage of fertilizers that are not received in right time of planting. They also complain of a slow payment system after 20 days of delivery. They need money in time to pay off their workers.

Another problem is the delay of transporting the fresh fruits to the factory. At times, they are collected two to three days after harvesting.

By Kasozi John: The New Vision Newspaper