What you need to know:
- The dairy sector was established under the Dairy Industry Act (DIA) 1998, enacted by Parliament. This forthwith saw the establishment of Dairy Development Authority (DDA).
In a bid to develop the value chains of the coffee and dairy sub-sectors, the government enacted laws that created two line management structures overseen by the Ministry of Agriculture, Animal Industry and Fisheries.
The dairy sector was established under the Dairy Industry Act (DIA) 1998, enacted by Parliament. This forthwith saw the establishment of Dairy Development Authority (DDA).
The Uganda Coffee Development Authority (UCDA) was created with the passing of the UCDA Bill in 1991 by the National Resistance Council.
Both authorities aim to improve the value chains in each’s sub-sector.
The UCDA’s goal is a sustainable coffee industry, with high stakeholder value for social economic transformation, with a mission to facilitate increase in quality coffee production, productivity, and consumption.
Elsewhere, the DDA sets out to enhance dairy value addition and quality for increased market competitiveness.
It is also mandated to provide development and regulatory services that ensure increased production and consumption of milk, a sustainable and profitable dairy industry sector that will contribute to economic development and improved nutritional standards in Uganda.
Dr Michael Kansiime, the DDA executive director, says the sub-sector has undergone unprecedented growth right through the times of acute milk scarcity in the 1970s, to the times of milk powder reconstitution to meet liquid milk demand in the 1980s, to the times of self-sufficiency in early 2000s and to the current times of raw milk surplus.
Value addition in the dairy sub-sector looks at reducing post-harvest waste and increasing net dairy exports.
“The Authority is promoting skilling in value addition where a number of dairy stakeholders—the youth being the major target—are skilled in yoghurt production, ice cream, cheese making and product packaging,” Dr Kansime says.
To ensure skilling, the government set up Entebbe Dairy Training School (EDTS). Field-based training also goes on.
Uganda currently produces 2.5 billion litres of raw milk yet national consumption demand stands at 800 million litres.
This surplus has attracted foreign and domestic investment in milk processing. Currently, there are 130 licensed large scale, medium scale and cottage milk processors in the country. They all, however, process only 30 percent of the raw milk produced.
Some of the dairy products being produced include UHT milk, butter oil, ghee, cheese, pasteurised liquid milk, milk powder, flavoured milk, milk shakes, casein, yoghurts and ice cream consumed locally and for export.
Uganda also hosts the largest milk processing factory on the continent.
Dr Kansiime says in the last 10 years, the value of milk and milk products exported from Uganda has increased from $5m (Shs17.5b) in 2008 to $130m (Shs456b) in 2017 to $131.5m (Shs462b) in 2019/2020.
“At this rate, Uganda is poised to become the largest dairy exporter in Africa and the sector is slowly edging its way into Uganda’s top exports, next to coffee and tea,” Dr Kansiime says in a statement posted on the DDA website.
Tale of two sub-sectors
The DDA is currently investing in rehabilitation and equipping of milk collecting centres and improving cold chain facilities to reduce post-harvest losses, investment in mobile laboratories, reference labs in regions and accreditation of the national referral laboratory in Lugogo, Kampala, to enhance regulatory capacity for improved quality.
Investments are also being undertaken in upgrading EDTS to a national dairy training and incubation college (NDTIC) to produce dairy technologists and dairy technicians. Investments are also being undertaken in regional operational units in nine regions of Uganda to take services closer to farms.
While milk is not a forex earner in the league of coffee, the strides the sub-sector has taken cannot be disputed.
In fact, to some—like Mityana South lawmaker and Democratic Party chief whip Richard Lumu—there is an asymmetry between the two sub-sectors.
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While there appears to be near consensus in one when it comes to the approach to value addition, dogfighting is the order of the day in another.
“Is it one person processing milk? It’s a number of them. I am not saying that exporting green coffee is the best thing to do. I am saying the level is unfair and the agreement throws them out of business,” Lumu says, referring to a coffee processing deal the government entered into with Uganda Vinci Coffee Company (UVCC) in February.
The coffee agreement empowers UVCC to roast coffee beans, and manufacture coffee capsules, as well as grinding and making instant spray coffee.
These approaches to value addition are expected to yield 60,000 tonnes of processed coffee and nearly 300 jobs of skilled and unskilled labour.
“This is the worst agreement in the liberalised sector. If you are bringing Coffee Marketing Board back, you don’t bring it with [foreigners],” Mr Nathan Nandala Mafabi, the chairperson of Bugisu Cooperative Union (BCU), said.
“We are exporting our jobs…we are externalising our money. Remember, coffee is the second most traded commodity after oil in the whole world. Now, we are getting our only product, which is the highest exchange earner, and giving it to an Italian,” he added.
The Italian Mr Mafabi refers to is Ms Enrica Pinetti, an investor whose dubious paper trail was captured by the International Consortium of Investigative Journalists’ 2010 data leak of offshore companies. Three of Ms Pinetti’s companies were illuminated.
“If they want coffee, which is the second traded commodity in the world to go on, [then] they cannot bring such an Italian company to run it. In short, cooperatives should be empowered to do it,” Mr Mafabi noted.
He added: “We in BCU, for example, do grounded coffee at Elgon Pride [Coffee]. That Elgon Pride is being done by a small machine. But if we got a bigger machine, we would do it [better]. We can do value addition.”
Mr Mafabi also claims that the government’s preference to drum up support for Robusta coffee over its Arabica cousin is telling.
“Currently, they say Bugisu AA, is extinct in the market and yet it is there. They are using our coffee to brand other coffees like Robusta, Paida, Kasese coffee…,” he said.
Most coffee enthusiasts seem to prefer Arabica over Robusta, if anything because it is smoother and sweeter. All things point to the bitterness—literal, like the mug of Robusta, and metaphorical— in Uganda’s coffee sub-sector staying put.