MPs demand govt intervention as Igara tea factory faces auction
Amanya warned that if Igara Tea Factory is auctioned and its operations disrupted, farmers in the area could lose an important outlet for their tea, worsening an already difficult situation in the sector.
Igara County West MP Cohen Amanya told Parliament that Igara Tea Factory has been advertised for auction, raising fresh concerns about the growing financial difficulties facing tea processors across the country. (Photo by Miriam Namutebi)
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Parliament has asked government to urgently intervene to save Igara Tea Factory in Bushenyi District from auction, warning that the collapse of the factory could leave hundreds of tea farmers without a reliable market for their produce.
Igara County West MP Cohen Amanya told Parliament that Igara Tea Factory has been advertised for auction, raising fresh concerns about the growing financial difficulties facing tea processors across the country.
Amanya said the threatened auction was not an isolated problem, but part of a wider crisis affecting Uganda’s tea sector, with other factories, including Kayonza and Mpanga, also facing financial difficulties.
“For example, Igara Tea Factory has been advertised and is up for auction. I appeal to the Government to stop the auction and find a solution that would allow the factory to resume operations. We all know the tea industry plays an important role in employment, taxation and the livelihoods of farmers,” he said.
Amanya said: "The tea sector employs Ugandans and pays taxes. If Igara is collapsing, Kayonza and Mpanga tea factories are also having problems, imagine what will happen to the tea sector."
According to Amanya, allowing the factory to collapse would undermine the Government’s stated objective of transforming the economy and increasing household incomes through commercial agriculture.
Amanya warned that if Igara Tea Factory is auctioned and its operations disrupted, farmers in the area could lose an important outlet for their tea, worsening an already difficult situation in the sector.
He said tea factories have been struggling with depressed tea prices, high production costs, and financial pressures, leaving some processors unable to sustain operations.
Deputy Speaker Thomas Tayebwa told Parliament that government was already aware of the challenges facing tea factories and had previously agreed on measures to support the sector following consultations with President Yoweri Museveni.
Tayebwa recalled a meeting held in Kyankwanzi involving a delegation of MPs, including former Finance Minister Matia Kasaija and Amanya, where the challenges affecting tea farmers and factories were discussed with the President.
He said several resolutions were reached at during the meeting, including the Government intervention to ease the tax burden on tea factories that had been affected by the fall in tea prices.
“While members were in Kyankwanzi, I led a delegation in which former Finance Minister Kasaija and Amanya were included, and we met the President. We agreed on a number of key resolutions. Among them, we agreed that government waives the taxes in the tea sector, especially for factories that had been affected by the price fall,” Tayebwa said.
“Yesterday, I met the minister and he said he was working on that,” Tayebwa said.
Tayebwa also reminded Parliament of another commitment made by the President to support tea farmers with fertilisers to help reduce production costs and improve productivity.
He said the fertilisers had already reached some areas, including his constituency, but noted that government had also promised a much larger financial intervention for struggling tea factories.
According to Tayebwa, the Government had discussed a package of Sh112b intended to support tea factories that were facing financial difficulties.
He asked the Minister of Finance to appear before Parliament and provide an update on the implementation of the resolutions agreed upon with the President.
“The President also promised the fertilisers. Those came, but there was a promise of Sh112b to help the struggling tea factories. I ask the Minister of Finance to come and brief the House on the resolutions,” Tayebwa said.
Tayebwa also requested the finance minister to report to Parliament and provide MPs with details on the status of the promised tax relief.