Sustainable Production and Market Positioning of Uganda Tea

4. WE WORK TOWARDS SUSTAINABLE PRODUCTION OF

6. POTENTIAL PROSPECTS FOR INCREASING TEA PRODUCTION FOR POSITIONING UGANDA TEA IN THE GLOBAL MARKETS. A presentation by: Julius SsemyaloCountry Projects Manager  Solidaridad Eastern and Central Africa - Uganda Ranjan Circar International Programme Coordinator for Tea Solidaridad Asia (India)

7. TWO FUNDAMENTAL ISSUES TO BE ADDRESSED NECESSITY TO EXPAND EXPORTS & IMPROVE QUALITY OF UGANDA TEA • Tea is traditionally Uganda’s third largest agricultural export commodity by value. • Nearly 93 % of tea products are exported while 7 % is consumed domestically (MAAIF, 2012).

8. POTENTIAL FOR INCREASING TEA AREA IN UGANDA Uganda has 200,000 Ha of land earmarked as optimum for tea production in the districts of; Bushenyi, Hoima, Kabarole, Kanungu, Kibaale, Kisoro, Mbarara, Mityana, Nebbi, Rukungiri and Wakiso, (MAAIF, 2005). • These areas are consistent with tea growing requirements of a temperate climate with rich well drained fertile soils, good distribution of rainfall for not less than 150 days per annum and temperatures averaging between 20oC -25o C, • Current acreage of tea in the country is estimated at slightly over 44,000 hectares, which is only 22% of the estimated total suitable land area for tea countrywide (Source: Uganda Tea Association 2nd July 2018).

9. WHAT MAKES TEA GROWING AN ATTRACTIVE ACTIVITY FOR SMALL HOLDERS IN UGANDA?

10. WHY IS TEA GROWING ATTRACTIVE? • Tea is one of Uganda’ Priority 12 Enterprises under the on going National Development Plan (NDP) II hence visible investments in plantlets, new factories and expansion of capacity through additional lines funded by the Government as; • A strategic export commodity and as a tool to fight poverty in the rural areas • The limited initial investment required combined with the relatively low risk of crop failure. • The auxiliary services created around the factories. • The steady all year income. • The market linkage in retail trade, transportation and consumption

11. WHY HAS TEA BEEN CHOSEN IN THE NATIONAL DEVELOPMENT PLAN II? There are many factors that favour Tea development in Uganda. These include: • Adequate land resources for Tea production; • High export potential for Tea to regional and international markets;

12. TEA HAS BEEN CHOSEN FOR ITS POTENTIAL FOR • High contribution to export earnings, • High multiplier effects in other sectors of the economy; • Great potential to increase production and productivity through better management; • High returns on investment; • Favorable agro-ecological conditions; • High potential for employment generation

13. GROWTH OF SMALL TEA SECTOR IN OTHER COUNTRIES • Many tea producing countries where small farmers depend upon tea as the main source of income for their livelihood have made rapid strides in increasing production to meet both domestic and export demand. • Between 2000 and 2014, harvested tea areas increased by about • 77 000 ha in Kenya, • 63 000 ha in India and • 48 000 ha in Vietnam.

14. GROWTH OF SMALL TEA SECTOR IN OTHER COUNTRIES • Separate institutions like KTDA in Kenya and TSHDA in Sri Lanka provide focused attention to the development of their smallholder tea sectors. • The advantage of such organizations is that • it would be easier for mobilizing the concessional financial resources from international funding agencies • for taking up large scale planting • creation of required infrastructure for processing and marketing of tea with professional management.

15. INVESTMENT POTENTIAL FOR EXPANDING TEA AREA AND INCREASING TEA EXPORTS & EMPLOYMENT GENERATION • The identified area suitable for expansion of tea area is around 200,000 ha. • Since the tea factories use wood fuel to fire up the boilers, • leaving aside 1/3 of the available land area for energy source plantations, the net available area excluding the current area under tea would be in the region of 100,000 + ha • This area could be brought under tea in a phased manner @10,000 ha per annum over next decade – say from 2020 to 2030

16. Cont. • With an average production @2000 kg made tea /ha, the additional production that would accrue when the entire planted area start bearing the crop – say by 2035 would be around 200 + million kg. • It would call for an investment of around 1.5 Billion USD (inclusive of processing factories, and ancillaries).

17. The proposed expansion would provide gainful employment for nearly 0.5 million persons in plantation and ancillary activities – a fulfilment of one of the main objectives as envisioned in Uganda’ Vision 2040

18. THE WAY FORWARD • For achieving the enhanced production and exports there is a need for: • A stand-alone tea policy and an institutional framework is essential for enabling environment • to harmonize public and private interventions, • to coordinate and to regulate the supply of inputs and • Land tenure and land use policies to ensure that economies of scale in production and cropping and farming systems are sustainable in the long run; • Several attempts have been made for revitalizing the tea industry in Uganda. • The envisaged plans, for various reasons, seem to have not yielded the desired results and hence needs to be reviewed towards an enabling regulatory and business environment.

19. Solidaridad works towards sustainable and inclusive economy that maximises the benefit for all. Solidaridad work with partners to bring about “CHANGE THAT MATTERS”, Solidaridad with its expertise would like to offer its services for Assessment of the business case and finance proposal; Draw conclusions on the investment readiness, feasibility of the investment case; When 1 and 2 are positive, develop a support package on headlines needed to support the tea plantations in getting investment ready while linking them with impact investors that show interest. HOW SOLIDARIDAD CAN BE OF HELP TO ADDRESS THE CORE ISSUES

20. SOLIDARIDAD HAS WORKED WITH THE TEA INDUSTRY ACROSS THE WORLD Asia: Initiator of successful sustainable tea programmes in close cooperation with tea associations & businesses in India, Sri Lanka, Indonesia, China and Vietnam since 2007. US & EU: Supporting Asian producers & brands with consumer campaigns on sustainable tea Utrecht Beijing San Francisco Delhi Guatemala City Accra Nairobi Lima South America: Supporting smallholder tea growers of Argentina to increase exports to US and EU Johannesburg Buenos Aires Africa: Supporting estates, smallholders and tea businesses to produce tea in a sustainable way. Operating in tea industries of Kenya, Malawi, Mozambique

21. SOLIDARIDAD’S ASSOCIATION WITH UGANDA TEA OVER THE YEARS & CURRENT 2019 INTERVENTIONS • Re-tooled both private and public Tea Extension workers (EATTA, TRI, Ethical Tea Partnership PPP Project). • Supported UTZ Certified Tea in Uganda. • Supports on going Government of Uganda Tea Policy Development Process. • In partnership with UNDP supported investment readiness of Kayonza Grower Tea Factory Limited to develop investible proposals and business plan. • Kayonza Grower Tea Factory is owned by 8,000+ smallholders in Kanungu District. • The Smallholders planted brought more land under Tea through the Government of Uganda Subsidy. The spin off was increased leaf over stretching the installed processing capacity. • Government of Uganda has supported Kayonza GTF to set up a third processing line.

22. SOY AND COTTON PRODUCERS OF BRAZIL RESPONDED BY DEVELOPING THEIR OWN SOLUTIONS FOR SUSTAINABILITY Soja Plus is a transparent and participatory process of continuous improvement of environmental, social and economic production from a better management of rural property. The actions are implemented in close partnership with rural producers, state and municipal governments, civil society, industry and commerce, research institutions, education and extension. The Responsible Brazilian Cotton program (ABR) epitomizes the union of cotton growers in favour of a more sustainable cotton production in Brazil.

23. TODAY ABRAPA HAS EMERGED AS A COMPETITIVE ADVANTAGE FOR THE COTTON INDUSTRY OF BRAZIL

24. INDIAN PALM OIL INDUSTRY HAS ALSO DONE IT TOGETHER WITH SOLIDARIDAD PRESSURE FROM RSPO SOLVENT EXTRACTORS ASSOCIATION & SOLIDARIDAD DEVELOPS & LAUNCH INDIAN PALM OIL SUSTAINABILITY (IPOS) FRAMEWORK • Expensive system that requires Indian industry to pay between $5 to $50 per ton • The producers have to pay a high amount for certifications without assured purchase RECEIVED RECOGNITION FROM INDONESIAN AND MALAYSIAN GOVERNMENT

25. SOLIDARIDAD’s Initiative in India • Launched on 4th April 2019 in partnership with Indian Tea Association • To create awareness among STGs on Good Agricultural Practices • Monitor Quality of Green Leaf supplied and Traceability • Vendor Development for Supply of farming inputs to STGs • Create SHGs to be coordinated by Solidaridad Farm Support Team

26. WHAT IS TRINITEA LOCALLY DEVELOPED, OWNED & GLOBALLY RECOGNISED DIGITAL SUSTAINABILITY ASSURANCE TAILORMADE FOR INDIAN REALITIES PROMOTION OF HIGH QUALITY INDIAN TEA IN TARGET EXPORT MARKETS TRINITEA IS A TEA PRODUCER’S SELF-ASSESSMENT DIGITAL TOOL PROVIDING TAILOR MADE EXTENSION SOLUTIONS TO THE TEA SMALLHOLDERS FOCUSSED ON IMPROVED QUALITY, BETTER YIELDS & FOOD SAFETY COMPLETE TRACEABILITY SOLUTION LINKING SMALLHOLDERS TO THE TEA BUYERS AND ALSO INPUT SELLERS AS WELL AS GOVT. SCHEMES DOES NOT COMPETE AND RECOGNISES ALL MAJOR SUSTAINABILITY STANDARDS 40 SOLIDARIDAD TEA INDUSTRY PROFESSIONALS & ITA/UPASI OFFICES ON THE GROUND TO SUPPORT

27. BENEFITS OF TRINITEA For Tea Packers For smallholders For Tea Factories 1) Agriculture information systems (ICT tools and Data analytics) for effective knowledge sharing and performance monitoring implemented and used 2) Improved access to farm inputs and Government schemes at cheaper rates 3) Free training by reputed industry experts on critical aspects that reduce crop losses and enhance tea quality 4) Support for smallholder group governance for aggregation of inputs and outputs 5) Better linkage with supply chain through a transparent system 1) Transparent supply chain 2) Product differentiation through sustainability claims at nominal costs in India and abroad. 3)1 Event each year for promoting sustainable Indian tea in key International markets 4) Risk Identification and risk management across the supply chain 1) Reduced procurement cost 2) Better quality tea leaf 3) Better control of heavy metals through better control of the smallholder supply through traceability system 4) Easier certifications 5) Enhanced opportunity for communicating on sustainable practices at no cost

28. ACKNOWLEDGEMENTS - INPUT TO THIS PRESENTATION WERE FROM THE BELOW LISTED SOURCES • National Agriculture Policy: Sept 2013: Ministry of Agriculture, Animal Industry and Fisheries (MAAIF). • Research series no. 119 Uganda’s tea sub-sector: a comparative review of trends, challenges and coordination failures Economic Policy Research Centre, Kampala, Uganda - September 2014). • Progress achieved in implementation of 2016 Manifesto May 20, 2019 - Official statement presented by Hon. Vincent BamulangakiSsempijja the Minister for Agriculture, Animal Industry and Fisheries at a media briefing on Manifesto implementation. • The current status of the Uganda tea industry during the period 2018: Uganda Tea Association 2nd July 2018. • Comprehensive Africa Agriculture Development Programme - New Partnership for Africa’s Development (NEPAD) • Second National Development Plan (NDPII) 2015/16 – 2019/20; June 2015 • Uganda Vision 2040 • Solidaridad intranet resources and repositories.

29. Thank you