Renowned businesswoman Prof. Maggie Kigozi has asked the government to come out and categorically explain the unclear clauses in the coffee deal which continues to raise eyebrows amongst stakeholders.
According to Kigozi, the government’s decision to offer the contract to a single player, attracts a monopoly in a sector that has for years employed millions of Ugandans both on a small scale and commercially.
“Ugandans across the country continue to castigate the government for signing a coffee agreement that promises to give a new company, Uganda Vinci Coffee Company Limited (UVCCL) 10 years of tax holiday. This deal also makes UVCCL a monopoly in the procurement of coffee and exporting it to Europe,” She explained.
She said the value chain cannot be controlled by a single company because it will allow for the exploitation of farmers who will not be in a position to bargain for a better price on the market.
“You see when you have one player, they decide what they want to pay you and you cannot object to that. The clauses in there should allow for a farmer to have a say on what they are paid for their produce or else they are forcing them out of production,” she added.
In February, the government signed an agreement with Uganda Vinci Coffee Company Ltd to add value and process Uganda's coffee.
Although the government imagined it was a move that would boost returns off coffee, the deal seems to be one that will benefit the investor over the farmers.
Last week the Federation of Small and Medium Enterprises executive director, John Walugembe, described the deal as a market distorter urging government to immediately reverse it to save one of the country’s top export earners.
Source: New Vision