The Bitter Core Of Uganda's Billion-Dollar Cocoa Industry: Economic Injustice
Many of Uganda’s small-scale farmers rely on someone else to dry their beans, a practice that keeps them in a cycle of poverty. A new processing factory aims to change that.
BUNDIBUGYO — It’s harvest day on Edson Sabite’s 4-acre cocoa plantation on the hilly slopes in the Bundibugyo region of western Uganda. His two brothers and two teenage sons are helping in the garden by cutting the cocoa pods, removing the beans and placing them in basins, which will later get dried in the sun and sold.
The rural town sits in the Bundibugyo region, in western Uganda, where cocoa beans thrive in a tropical expanse blessed with particularly fertile soil. The area produces more than 70% of the cocoa the country exports. Sabite earns more than many farmers, growing his cocoa on land four times the size of most of the surrounding cocoa farms.
He has the storage facilities to dry his cocoa beans and transport them to buyers, ensuring he gets the highest price possible. But Sabite’s story isn’t typical; most cocoa farmers have small holdings and lack the facilities to dry their beans to secure a higher price than if sold wet, or freshly picked. They are forced to rely on middlemen.
Transforming the trade
Middlemen travel to farms to collect the wet cocoa beans, dry them and then sell them to the exporter or trading company they have ties with. Dry beans go for 7,800 Ugandan shillings ($2.12) a kilogram.
Most middlemen have their own facilities for drying beans, first laying them out on a sheet of plastic until fully dry, then removing them from their pods and storing them in wooden boxes, turning them every few days — a process called fermenting that helps to improve the beans’ richness. It’s a process worth investing in as middlemen pay farmers, on average, just 3,000 shillings (81 cents) a kilogram for the wet beans, a practice that keeps cocoa farmers in a cycle of poverty, unable to reap the rewards from producing a crop at the heart of a multibillion-dollar industry.
But now the Ugandan government is advancing a plan officials say will improve the farmers’ situation.Last August, after a presidential pledge made in 2016, the government provided the land in Bundibugyo and announced work would begin on a 91.5 billion shilling ($24.8 million) cocoa factory. Set to open in the next year, the factory will buy cocoa beans directly from farmers as well as offer post-harvest training to help farmers produce a better quality cocoa bean they can then sell at a higher price, says Aida Vumilia, lead researcher on the project and agro-industry projects officer at the Uganda Development Corporation, the government agency that promotes industrial and economic development.
“Most farmers are selling it raw because they have no facilities. The factory, through third-party processing opportunities, means farmers can take their cocoa to dry and sell it at better prices,” says Vumilia.
90% of the country’s cocoa farms have small holdings of 1.5 to 2.5 acres of cocoa growing land
Light Kisembo, district production officer for Bundibugyo, in charge of production in the government’s agricultural department at the district level, says the processing factory will “change farmers’ lives,” especially those that have been selling cocoa in raw form. “This will solve the problem of middlemen,” he says.
On the necessity of middlemen
Biira Olivia works on her quarter-acre cocoa plot in Bundikayanja village. Biira relies on middlemen who buy the raw cocoa seeds at a marked-down price. She hopes a government-initiated processing factory will help her earn more from her cocoa.
PATRICIA LINDRIO, GPJ UGANDA
Biira Olivia uses a middleman. She has been a farmer for seven years and lives in Bundikayanja village, about 9 kilometers (5.6 miles) from the town of Bundibugyo, the “chief town” of Bundibugyo district, where Sabite lives. It’s also farther from the exporers and trading companies that buy cocoa beans.
“My garden is only a quarter of an acre,” she says. “In a good season, I will get 5 kilos [11 pounds] of beans each week. This is not much, and I have four children to look after. For now, the middleman is a necessity, and my worries are [having enough for] a daily meal, so I will take the price that is given.”
Biira says she would benefit from training on how to protect her crops against pests and adapt to the changing climate. “I will be happy to sell direct to the company and get rid of the middleman if the price is better, as this will help me earn more from my cocoa,” she adds.
Alfred Bakurana, a middleman, says he normally travels 20 to 50 kilometers (12 to 31 miles) each day on his motorbike to source cocoa within the district. “The area is hilly; therefore, it’s a challenge navigating the poor roads,” he says. “Farmers wanting advances on the cocoa and transporting the cocoa to the trading company on time are all factors that determine the price. I cannot go out of my way to make a farmer comfortable when I am not.”
Bakurana, who has been working as a middleman for 15 years, says he has mixed feelings about the new government project. While it could put him out of business, he acknowledges it’s just one factory; there will still be farmers who can’t transport their own beans and need him, he says.
Collecting, drying, testing
Despite the worldwide demand for cocoa beans and the export value of this product in Uganda set at over $90 million, 90% of the country’s tens of thousands of cocoa farms have small holdings of 1.5 to 2.5 acres of cocoa growing land, and many cocoa farmers live hand to mouth.
“They hurry to sell while the cocoa is wet and fear staying with it because of the fluctuating prices,” says Kisembo Jacques, fair trade and organic project coordinator at Semuliki Cooperative Union, a farmers’ union that produces and exports cocoa beans. “To benefit from cocoa, there is a need to organize into smaller groups and get rid of middlemen if they want better prices, but most farmers live hand to mouth and are not patient.” This is something he says his organization is trying to change by educating cocoa farmers on better farming practices and encouraging them to plant some food crops, alongside their cocoa beans, to combat food insecurity.
Bakurana says he is the link in helping these farmers survive; without him, most would not get their cocoa to the market. “I oversee getting the product to the trading companies which sell to exporters,” he says. “This involves a lot of movement and collecting the beans, drying and testing; this comes at a cost. I, therefore, give a fair price, depending on the market.”
Planning for a better future
But Light Kisembo, the district production officer, cites the need for tighter regulations on middlemen and more focus on educating farmers, which is the aim of the government’s work to establish a National Cocoa Policy, due to come into effect this year.
“It will work on promotion and regulation of the industry, for quality assurance, as middlemen need to be regulated,” he says, adding that one of the goals is to educate farmers on better fermenting processes to ensure bean quality.
Sabite, who has been growing cocoa for over 20 years, says the bean has allowed him to educate his six children, build a house and offer family members employment on his farm.
“The future only seems bright, and with the factory adding value to prices, it all sounds exciting if they meet their obligations,” he says. “I plan on increasing my acreage in the next three years, and I would advise my children and younger Ugandans to join in cocoa planting because the money is there when one learns the trade.”