Palm oil tree out growers in Bumangi Village, Mugoye Sub County, Kalangala district have resorted to processing their own palm oil, breaching the agreement they had signed with the private sector and the government to participate in the 25 years project which started in 2003.
The out growers alleged on Saturday that they are paid low prices which do not match with the international standards, as stipulated in their contract.
Sam Mutawonga, one of the pilot palm oil trees out growers, says initially, he was very happy when he heard of the palm oil project. But that to his surprise, it has failed to meet his expectations.
"Iam tired of working for less pay, since I know and have the skills of making palm oil, I would rather process my own and sell it, than being manipulated by BIDCO Company," he said.
Adding: "Much as the contract I signed with them had not yet expired, I do not owe BIDCO any money, as I worked hard and cleared the loan they rendered to me. I do not see any reason why I should continue to supply them with palm oil yet I can locally process mine and earn big," Mutawonga added
Joseph Muleebwa, also a palm oil tree out grower in Bumangi village, says unless BIDCO revises its payments, he will not stop processing own palm oil.
"The reason I have resorted to processing my own palm oil is because I am not satisfied with the payments, I cannot wait until the contract I signed expires yet I need money to cater for my family," he stresses
Muleebwa proposes that the prices to be raised to sh1000 from sh390, stressing that they invest a lot in the fertilizers and pesticides.
However, the Project Manager, Vegetable Oil Development Project, Ministry of Agriculture, Animal Industry and Fisheries, Connie Masaba, refutes the farmers' allegations, saying the price for the farmers' oil palm fresh fruit bunches is determined through a pricing formula that is part of the agreement with private sector to ensure that farmers are paid a fair price.
"The pricing formula applies the international crude palm oil price; no one can influence the price because of the formula. The prices have been low because the international palm oil prices have also been low. Currently the international palm oil prices have started increasing. Therefore, no one is underpaying the farmers. Prices are determined by forces of demand and supply," she said.
On farmers processing own palm oil, Masaba says, small scale processing can easily cause environmental degradation as a result of failure to treat the effluent that comes out of processing.
"Both oil spills and palm kernels that are not easy to process using small scale processing facilities can be a big source of environmental degradation. We therefore discourage small scale processing," she explains.
Masaba notes that there are also challenges in ensuring that the crude palm oil produced meet the edible vegetable oil standard in terms of hygiene and amounts of free fatty acids that lead to the oil becoming rancid and not healthy.
Masaba says breaking the partnership would cause challenges in terms of loan recovery and a commitment to the private sector and the government. This is not healthy for future partnership that would seek to involve farmers in other enterprises and areas.
The General Manager, Kalangala Oil Palm Growers Trust (KOPGT), Nelson Basaalidde says without doubt, farmers do not have expertise nor the financial capability to undertake such a venture.
"We have advised them to always study the price dynamics on the international scene. That is where the pricing basis is derived. Anything outside the agreed position is mere speculation and cannot work for the industry," he notes.
Basaalidde further says farmers have partnered with the private sector and government to participate in the project, with a lot of government investment in terms of low interest production loans that are recovered when they sell their oil palm fresh fruit bunches to the mill.