Business

Dairy Farmers in Ntugamo, Mbarara, Others Decry Low Milk Prices

Over 10,000 Dairy farmers in the Western and Southern Western part of Uganda are facing a serious crisis as milk prices drop after the closure of major milk processing companies.

Farmers operating in the districts of Lyantonde, Mbarara, Ibanda and Ntungamo among others have resorted to selling milk at as low as Shs 200 per liter to local vendors while more piles are going down the drain.

In 2013, after years of low income generation caused by the minimum demand of milk among local households, Pearl Dairies Ltd, the manufactures of Lato Milk came on board and helped these farmers; buying large volumes of milk on a daily basis.

To the farmers, that was their refuge and they have been enjoying numerous benefits from the milk processing company started buying milk from Shs 600 to Shs 800 per liter.

The good days, however, came to a sudden halt last year when the company closed shop.

George Rutaboorwa, a dairy farmer from Rwensheko village in Kiruhura District, appealed to the East African Community committee to intervene in such situations where countries within the region are not allowed to freely sell their goods and products.

“The EAC should formulate policies clearly indicating to member countries how business should be done. Ideally, EAC was formed so as to facilitate free  and easy movement of goods and services from one member state to another but that’s not the current situation at the moment.

Most of us dairy farmers here only rely on farming for a living and milk production is our full time job. Now that Pearl Dairy which has been buying our milk has closed its operations, we are left with no choice but to suffer,” lamented Rutaboorwa.

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He added, “ever since Pearl closed down business, we don’t have where to sell our milk so we forced to give it to the local vendors at Shs 200 which is almost a give-away price and sometimes we milk the cows and just pour the milk away. The vendors only buy very minimal, negligible quantities.”

Dairy Farmer George Rutaboorwa addressing journalists at his home in Rwensheko village,Kihura District

Rutaboorwa however, blamed Pearl for not informing them of what was on ground as they just suddenly stopped buying their milk yet he, like many other dairy farmers, had signed a Memorandum of Understanding with them to supply milk.

Robert Kaijutsya, outgoing chairperson of Lake Mburo Farmers Cooperative Society found in Kanyaryeru village in Kiruhura district revealed to Chimpreports that the cooperative also closed immediately after the factory closed operations.

What really happened?

Towards the end of 2019, Uganda’s milk consignments produced by Pearl Dairy Farms Limited were seized and impounded in Kenya on grounds that Pearl Dairy was importing their products from Germany and repackaging it disguising that it’s made in Uganda.

In 2020 towards the end of February, Lakeside Dairy, the producers of Dairy Top, experienced the same as over 10 of the trucks carrying their products were not allowed to enter Kenya and they had to return their trucks to Uganda.

Although the Uganda government interceded on behalf of the dairy industry with a diplomatic protest note to Kenya, no results have been yielded so far. The issue has escalated, affecting farmers and cooperatives in Mbarara, Ntungamo and the neighboring communities that have been entirely depending on sales from milk.

Speaking to journalists at their Factory in Mbarara, Devendra Seth, Managing Director Pearl Dairy said the company’s decision to close down business has greatly affected farmers who have been supplying over 800,000 liters of milk to the company.

“Our closure has hugely affected farmers who have been over relying on us for market of their milk and there is absolutely nothing we can do for them since we are no longer in business.

Devendra Seth, Managing Director Pearl Dairies Ltd

These are over 10,000 farmers we are talking about here and all these people have families to look after. We were employing over 2000 Ugandan locals in our factory and all these people have no more jobs. Despite the clearance from the Ugandan authorities, some trucks are still being held at the boarder for 2 to 9 days,” Seth explained.

Established way back in 2013, Pearl Dairies have been exporting over 80% of the milk products  including Powdered milk, butter, ghee and of recent yogurt among others to Kenya, Juba and Dubai among other markets whereas only 20% is locally consumed in Uganda.

Devendra rubbished claims by Kenyan authorities accusing them of repackaging milk, saying all their products are produced and bought in Uganda.

“Last year alone, we bought over 145 million litres of milk from different farmers in Mbarara, Ntungamo, Isingiro, Rakai, Kiruhura, Ibanda and Lyantonde among others and the quality of our products is already beyond the recommended standards,” Seth added.

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