Kalangala palm oil farmers decry low prices

By Shamim Saad

PALM tree out growers in Kalangala district have decried the low prices paid by BIDCO, the manufactures of palm oil in the area. The farmers claim they had an agreement with BIDCO to pay them according to the dollar rate.

They claim that since 2010, BIDCO has been paying them sh300 to 390 per kilogram.

Sylvia Nalwanga, a pilot Palm oil tree farmer said BIDCO makes a deduction from every kilogram they supply.

"They should explain to us on how they pay us, or we switch to other crops like coffee," said Nalwanga.

This was revealed during their demonstration over the low pay in Kalangala, demanding for government's intervention.

Ssalongo Lutaaya, chairman of farmers in Kalangala said they have never benefitted from the palm oil project, because even payments delay.

They propose the prices to be raised to sh1000 from sh390, stressing that they invest a lot in the fertilizers and pesticides.

The Project Manager, Vegetable Oil Development Project in the Ministry of Agriculture, Animal Industry and Fisheries, Connie Masaba refuted the farmers' allegations, saying the pricing formula is tagged on the international palm oil price and also takes into consideration the oil extraction rate from the fruits.

She said the payment varies depending on the prevailing international crude palm oil price for the month which was also included in the agreement signed between government and BIDCO in 2003.

"The price of palm oil on the international market has been falling since 2012. That year the price reached USD 1,200 per tonne and currently it stands at USD 485 per tonne," Masaba explains.

The General Manager, Kalangala Oil Palm Growers Trust (KOPGT), Nelson Basaalidde said farmers are paid an import parity price, meaning that their price includes the cost of transport and handling of crude palm oil from Malaysia to Uganda.

He said farmers are currently paid sh402 per kg of fresh palm fruits as compared to sh216 in 2010.

Basaalidde said when all transport costs are deducted and the production loan is repaid (recovery is 33% of the sales every time the farmer sells), the farmer gets sh270,000 per acre per month as take home.

He also said all farmers are registered under KOPGT which is supported by Government. There are 1,770 registered farmers.