Coffee nursery operators demand sh33b arrears

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Parliament and the agriculture ministry have responded to petition by coffee nursery operators demanding the payment of sh33.7 billion in verified arrears for seedlings supplied during the 2022 and 2023 seasons.

The petition was submitted by Devoted Coffee Farmers Initiative, a coalition representing 14 sub-regional associations across Uganda.

In its report, Parliament's agriculture committee described the proposed allocations in the 2025/26 national budget as grossly inadequate to meet the needs of smallholder farmers and the broader goals of Uganda’s coffee roadmap.

The MPs criticized the sh15 billion allocated for coffee seedlings and sh5 billion for hoes as insufficient, calling for a more robust financial commitment.

They recommended an increase in funding to sh50 billion for coffee seeds and seedlings, alongside allocations for other priority crops, including sh3 billion for macadamia, sh5 billion for Hass avocado, and sh5 billion for sorghum.

Hoima East MP Patrick Mwesigwa Isingoma decried the lack of seed supply at the grassroots.

“Today, my office in the constituency is currently indebted by constant requests for seeds from constituents which we cannot readily provide," he said.

Bufumbira East MP Dr James Nsaba Buturo echoed the frustration, attributing the crisis to fundamental gaps in national agricultural planning.

Minister warns of budget gaps

Responding on the floor of Parliament during Thursday’s plenary, agriculture state minister Fred Kyakulaga Bwino supported the committee’s recommendation for increased funding for seedlings.

However, he expressed concern over mounting arrears, particularly due to shortfalls in phased payments promised by the finance ministry.

“We got the seedlings worth sh71.8 billion for tea and sh37.4 billion for coffee. These were to be paid over three financial years, but unfortunately, not all arrears are provided for in the current budget,” said Kyakulaga.

The minister warned that continued underfunding could lead to further accumulation of debt and discourage private sector engagement in seedling production, an essential part of Uganda’s target of producing 20 million coffee bags annually by 2030.

Lira district Woman MP Agnes Linda Auma, who chairs the agriculture committee, criticized the reduction in budget allocation to agro-industrialization, from 2.9 percent in FY 2024/25 to just 2.4 percent in FY 2025/26.

She said the sh1.7 trillion allocation was 30 percent less than the sh2.448 trillion projected under the National Development Plan IV.

Aggrieved

In their April 7 petition addressed to Speaker of Parliament Anita Among, nursery operators expressed frustration over continued delays in settling verified arrears despite confirmation by the Internal Auditor General and the Treasury.

A letter from the permanent secretary dated April 29, 2024, had confirmed the debt, but only sh14 billion of the sh15 billion released in FY 2024/25 was disbursed, with sh1 billion stalled due to the dissolution of the Uganda Coffee Development Authority (UCDA).

“What hurts more is the government’s allocation of sh67 billion to Inspire Africa Coffee Factory in the March 2025 supplementary budget, while grassroots operators continue to struggle," said the petitioners.

Led by acting chairperson Hellen Ketty Acham Elungati Ketty, the nursery operators argued that they have invested personal and loaned capital to sustain seedling supply chains and are now on the brink of collapse due to unpaid dues.

“Some of our colleagues have died due to lack of funds to access treatment in referral hospitals. Many cannot pay school fees or continue operations due to lack of working capital."

Sector growth at risk

The petitioners highlighted the progress made since the 2014 launch of Uganda’s Coffee Roadmap by President Yoweri Museveni, which saw exports grow from 3 million to 6.85 million bags annually and earnings climb to $1.14 billion (sh4.19 trillion) in 2023.

They also pointed to the Uganda Coffee Act 2022, which introduced a 2 percent cess now generating sh80 billion annually, funds that were meant to be reinvested in the coffee sector.

“If this fund was utilized effectively, such arrears would not accumulate. Why is it not serving its intended purpose?” reads the petition.

The petitioners called on Parliament to ring-fence the cess to serve nursery operators and support sector resilience.

The Devoted Coffee Farmers Initiative has requested a formal dialogue with Parliament's agriculture committee to offer insights and propose long-term solutions. 

The petition was also copied to the ministers of finance and agriculture, and the head of Public Service.

The petitioners emphasized that the failure to address their concerns could reverse the significant gains made in coffee sector growth and rural transformation under initiatives like the Parish Development Model (PDM).