Promising oil palm prospects in Uganda

Oil palm growers in Uganda's Kalangala district are in high spirits following reports of an expected boom in the first harvest.

A total of 474 households who are growing 1,781 hectares of palm oil trees expect to earn not less than UgSh50m ($30,000) each during the first harvest season. One such farmer, James Lutaaya, 54, and his family of nine have grown 58 acres of palm oil trees. " I got a loan of sh7m ($4,300) from Kalangala Oil Palm Growers Trust and we have grown 3,300 oil palm trees," he said

The manager of the trust, Nelson Basaalidde, explained that each oil palm has a capacity of yielding between 12 to 15 bunches that weigh 30kgs and above. He said one oil palm can earn the farmer at least Sh200,000 ($120) each season. Lutaaya expects to earn Sh600m ($365,000) from his over 3,000 oil palms each season.

The oil palm project was introduced in Kalangala in 2003. "Lack of land was a serious problem when the project started, but today people are freely selling their land to oil palm growers, while others are seeking loans to join the business," said David Mukasa Balironda, the district agricultural officer. He said land acquisition for the nucleus estate, now under Uganda Oil Palm Limited (OPUL), had continued with over 2,000 hectares of land already identified for purchase from 16 landlords.

Connie Masaba, the Vegetable Oil Development Project coordinator, said sh500m ($300,000) has been advanced as loans to the farmers. "Government didn't want a situation where farmers had doubts about the market and where to get funds for growing oil palm and thus decided to give farmers loans, payable in a period of five years." She said security of the loan was the oil palm. "Once harvesting starts,we shall deduct 33% for the loan, 10% as service charge and pay the farmer 57% for a period of five years," she said.

Masaba said Uganda would earn between sh100b and sh140b ($61 million and $85 million) annually "once we start producing at full capacity."

BIDCO, who are investors from Indonesia, wanted 10,000 hectares of land to grow oil palm, of which the Government agreed to lease 6,500 hectares, saying they would get the balance from the out-growers.

To date, OPUL has planted 4,000 hectares of land while the small holders and out-growers have 1,800 hectares.

BIDCO regional manager Lim Choon Meng decried the shortage of land. "Currently we are stuck with 450,000 seedlings in the nursery bed. We need land to plant them. We cannot import more unless we have planted the ones we have," Lim said. He assured farmers of a ready market, saying, "We shall have an oil palm mill in Kalangala from where we shall process crude palm oil before transporting it to Jinja for refining. All that is grown here will be bought."

New Vision