Tea farmers suffer despite price upsurge

Despite Uganda's tea brands achieving impressive prices at the Mombasa Tea Auction, some selling above a dollar per kilogramme, a harsh reality persists in the fields: smallholder tea farmers, who form the backbone of the sector, continue to struggle with declining farm gate prices, escalating production costs and a lack of policy direction that has left them vulnerable. 

At a glance, Uganda's recent performances at the Mombasa Tea Auction paint a promising picture. 

During Sale 17/25, Uganda secured a national average of $0.99 (about sh3,621) per kilogramme, according to a report by Tea Brokers East Africa Limited. 

Notably, Kisoro teas fetched $1.28 (about sh4,696), while Kigezi Highland and Bwindi followed closely at sh4,623 and sh4,513, respectively. 

Even more promising was the performance at Sale 15/25, where the average price climbed to $1.03 (sh4,761) per kilogramme. 

Kabale led the way at $1.41 (sh5,166), with Kyamuhunga and Bwindi trailing at $1.29 (sh4,727) and $1.25 (sh4,580), respectively.

Bleak ground reality 

These figures would suggest a sector on the rebound, especially after Uganda's tea prices bottomed out at $0.66 (sh2,420) per kilogramme in 2023. 

However, beyond the auction room's glow lies a grim struggle for survival in the tea-growing highlands. Across Bushenyi, Kabale, Kisoro and Rubirizi districts, farmers are voicing a common and urgent grievance: they are not benefitting from the auction prices. 

While factories are reportedly earning an average of $1.30 per kilogramme, farmers are paid sh300 (about $0.08) per kilogramme of green leaf, a figure that fails to cover even a fraction of their expenses. 

“We are being cheated,” declared Rev. Baker Magaragariho, an agronomist, tea farmer, and chairperson of the Rubirizi Tea Growers Association. 

“How do you expect a farmer to survive when the costs of production range between $1.10 and $1.20, about sh4,000, yet we're paid sh300? It's exploitation.” 

Farmers must also pay workers sh150 per kilogramme for plucking, while covering costs for fertilisers, transport, bush clearing and pruning that push many to the brink of collapse.

Rising input costs, policy vacuum 

Naboth Nuwagaba, a farmer and an Igara Tea Company board member, lamented the impact of soaring input costs. “A 50kg bag of fertiliser now costs over shi40,000,” he said. 

“This is a crucial input, yet government subsidies or interventions are non-existent.” Nuwagaba further criticised the absence of a national tea policy. 

“We've been operating without clear regulations. Everyone does as they wish. Some processors compromise quality, affecting all of us when teas are undervalued or rejected at auction,” he noted. 

“At Igara, we are just breaking even at $1.10 [sh4,000], but for farmers, it's outright suffering.” 

He added that the lack of a regulatory framework has given processors and exporters unchecked power to dictate terms. 

“Without pricing transparency or standardisation, farmers have no bargaining power and no protection from market shocks,” he said.

Subsidy delayed, then forgotten 

Farmers had pinned their hopes on a cabinet resolution promising fertiliser subsidies for the March 2024 season, but the pledge went unfulfilled. 

Hopes were again raised for support during the September rains, but there has been no progress. 

The sh40b fertiliser subsidy programme, which was proposed with a 50% cost-sharing model at the end of 2023, has become unworkable due to delays and poor communication. 

Farmers argue that someone earning sh150 to sh200 per kilogramme cannot afford to contribute even half the cost. Instead, they propose a token 25% co-payment, possibly on credit. 

Many farmers are now abandoning their fields or uprooting tea gardens due to unsustainable prices. Green leaf prices have dropped to as low as sh120 per kilogramme in some areas, down from sh200 earlier this year and sh250 in October 2023. 

“If we receive sh40b, each farmer could purchase enough fertiliser for one season,” one grower said. “Most gardens are overgrown and unproductive. Fertiliser is essential if we are to rejuvenate the sector.”

Misleading auction perceptions 

Victoria Ashabahebwa, the chairperson of the Uganda Tea Association, cautioned against simplistic interpretations of auction results. 

“Yes, it's encouraging that some Ugandan teas sell above $1,” she said. 

“But it's misleading to assume that translates into better farmer incomes. Auction prices are averaged over months and subject to debt obligations, market timing and other operational costs.” 

Ashabahebwa noted that even top-performing factories have seen stagnation or regression. 

“Some teas remained unsold; others fetched the same prices as before. So, this notion that auction prices are booming across the board is inaccurate,” she said.

Factories under strain 

Tea processors are not immune to the crisis. Rising firewood costs — now at sh5o,000 per cubic metre — alongside outdated machinery, have driven up production expenses. 

“How do we stay afloat when our operating costs double but our income remains the same?” Nuwagaba asked. “We struggle to pay for power and maintenance, let alone invest in better equipment.” 

To cope, some factories are cutting corners — reducing processing time and compromising quality. Stakeholders warn that such shortcuts harm the long-term reputation of Ugandan tea on the international stage.

Key sector under threat 

Tea remains one of Uganda's 12 priority commodities under the National Development Plan III. It is cultivated on approximately 49,000ha, with smallholders accounting for about 70% of production. 

Despite ongoing challenges, tea still plays a vital role in Uganda's economy. In 2018, it brought in $96.5m in export earnings, which rose to $112.7m in 2022. 

However, earnings dropped sharply to $60jm in 2023 due to falling global prices. 

Uganda boasts 41 tea processing factories and a workforce of over 1.2 million people involved in the tea value chain — further evidence that revitalising the sector is not just an agricultural concern but a national economic imperative.

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