What you need to know:
According to Frank Tumwebaze, there is need to reduce taxes on local raw materials such as barley, sorghum, wheat and now cassava that are used in the production of alcohol.
Minister of Agriculture Frank Tumwebaze has asked government to incentivize raw materials used in the production of local beverages.
This, he said, will encourage farmers to increase production, noting that: “There is need to reduce taxes on local raw material such as barley, sorghum, wheat and now cassava that are used in the production of alcohol if we are to spur alcohol production.”
Mr Tumwebaze was speaking during a forum in which Uganda Breweries hosted farmers to discuss the potential of scaling up supply of raw material as a way of building capacity for full local sourcing.
“Uganda Bureau of Statistics, estimates that agriculture employs 70 percent of the population, contributes about 33 percent of export earnings and makes up about 24 percent of gross domestic product. By harnessing the potential of a private sector led initiative to improve farming output and yield in the country, I am confident that we shall see an even bigger spike in the contribution of agriculture to GDP,” he said.
Mr Andrew Kilonzo, the UBL managing director, said through such meeting they want different stakeholders to discuss how all entities can work together to support the manufacturing industries to scale up sourcing of inputs.
Through initiatives such as the Local Raw Materials, he said UBL wants to make farming more productive and profitable for Ugandans, which is critical in reducing poverty, boosting prosperity and creating jobs.
“The use of Local Raw Materials is acknowledged to have a highly positive impact on the economy seen in both the revenue collection and income for the farmers,” Mr Kilonzo said, but noted illicit and unpackaged beverages, which currently stands at 64.5 percent, continue to pose a challenge.
Data from the Euromonitor study indicates that only 35.5 percent of products in the alcohol and beverage sector are legal and meet accepted stands. “We seek support in enacting policies and laws that protect our industries against illicit and counterfeit product, which costs government more than Shs1.6 trillion annually in leaked taxes,” he said, adding that UBL will continue to advocate for a well-regulated environment for all players to build Uganda in a mutually beneficial way.
Uganda Breweries currently works with more than 2,5000 farmers across the country from whom it purchases more than 8,000 tonnes of barley, 15,000 tonnes of sorghum, 18,000 tonnes of maize and 1,000 tonnes of cassava.
At least 30 percent of the farmers are from northern Uganda, while 25 percent are from eastern, 35 percent from western and 10 percent from central Uganda.