Fears over proposed palm oil growing project in Kyotera

Some of the squatters on Sango Bay Estate land attend a meeting at Kakuuto Sub-county headquarters on October 21 last year. Many are worried of eviction. PHOTO / FILE

What you need to know:

  • Oil palm is one of the most sought after crops in the world today from which comes about 40 percent of all traded vegetable oils—raw material for household essential items such as cooking oil and soap.
  • It is a perennial crop with a 25-year life cycle and one that thrives in rainfall/warm temperature laden areas. After piloting the crop farming in Kalangala and Buvuma districts, government is now spreading it to other areas, including Sango Bay area in Kyotera District, where anxiety and insecurity has gripped communities, writes Frederic Musisi & Ambrose Musasizi

Early in the morning, the Sango Bay area in Kyotera District is a vast expanse of infinite misty flatness.

Its grey-green to the far horizon, interrupted only by pockets of forests, plantations, farmlands, and homesteads.

Kyotera, on the fringes of Lake Victoria to the South, is a low-lying plateau of savanna grassland. The district was the gateway to Tanzania through the Mutukula border point, and was part of Rakai until it was carved out in 2015.

On July 1, 1933, the then colonial British administration leased some 59,084 hectares (equivalent to 146,000 acres) to the Indian owned Sango Bay Estates Limited (SBEL), the oldest sugar manufacturing company established in 1930, to undertake, among other business ventures—agricultural production, including sugarcane growing, and timber processing on the land constituting central forest reserves until 1966.

The leased landcame to be known as Sango Bay estate. The total acreage cut through Kabira, Kyebe, and Kakuuto sub-counties.

According to one online East African Geographical Review journal, SBEL attempted numerous unsuccessful ventures, including sisal until 1956 when the main use of the estate was exploitation of timber.

“In 1956, the lease of the estate changed hands, and, in an attempt to increase the return from the land, experimental plots, each of 200 acres had been planted with coffee and sugar-cane by 1960. The coffee failed completely, but the sugar was sufficiently successful to warrant the planting of a further 700 acres in 1962,” the journal reads in part.

The journal adds that SBEL’s sugar manufacturing business failed owing to its economic model whilst the establishment of a sugar factory did not bring with it a general increase in the prosperity of the area.

It did not encourage immediate changes in the crops grown in the neighbourhood, nor was there any sharp rise in the income of surrounding communities  as most of the workers on the estate were immigrants from neighbouring Rwanda.

The expulsion of Asians by President Idi Amin in 1972 was the last blow to SBEL’s undertakings in the area.

In 2012, the government attempted to reclaim the land but ran into several hurdles, including dealing with those with political ties who had acquired parcels of land.

Last year, government moved in to take over the land following the greenlight from the Attorney General’s office.

The State Minister for Lands, Mr Sam Mayanja, who has visited the area, ordered the cancellation and vacant possession of all titles.

The decision to reclaim the land, according to documents seen by Daily Monitor, was premised on SBEL “not having fulfilled its obligation” to utilise the leased land excluding the central forest reserves for agricultural purposes.

Enter oil palm

The tract of land, officials told this newspaper, was also found suitable—within the Lake Victoria catchment, peppered with warm temperatures and all-around convectional rainfalls—for oil palm growing. Plans are now underway to handover the land to another investor BIDCO Uganda Limited.

“Palm oil is a crop that requires a lot of rainfalls that are well distributed throughout the year. That is why we started out in Kalangala, Buvuma, and now Sango Bay. We are also looking at other areas such as Mayuge and others around Lake Victoria for expanding growing the crop,” Ms Connie Magomu, the national oil palm project manager, said. “Uganda is on a mission to promote oil palm. As a country, we import 350,000 metric tonnes of vegetable oils of which 97 percent is crude palm oil and its derivatives, and we spent about $300m averagely. In 2020, we spent $289m, 93 percent of which was palm oil and its derivatives so it is important that save that money by growing the crop here,” she added.

According to projections by the oil palm project, Uganda needs at least 100,000 hectares (247,105 acres) of palm oil plantations for the country to be self-sufficient.

“In 2003 when we (Uganda) signed a MoU with BIDCO, we were talking about 40,000 acres which 23,000 hectares was under nucleus state (specific gazetted locations) and 13,000 under out growers’ schemes. So, expansion to Sango bay is part of government’s scheme for import substitution,” Ms Magomu said.

The decision to extend palm oil growing to Kyotera is based on documents seen by this newspaper, which reveal that BIDCO requires another 15,000 hectares for the project.

This is part of the unmet part of the 2003 deal between the Finance ministry and BIDCO, granting the latter chunks of land and tax holidays. 

In the FY2019/2020, the Finance ministry wrote off Shs194b and Shs79.4b by June 2021 as Value Added Tax (VAT) supposed to be paid by BIDCO for 17 years between 2003 and 2020.

In 1997, government and the UN’s International Fund for Agricultural Development conceptualised large scale palm oil growing in Kalangala as part of the Vegetable Oil Development project to address rural poverty by involving smallholder farmers in vegetable oil crops production.

Subsequently, the government and BIDCO signed an MoU on April 4, 2003,for development of 40,000 hectares of oil palm in a phased manner.

The government would provide 26,500 hectares to BIDCO for growing the crop and with small holder farmers/out growers facilitated to grow oil palm on 13,500 hectares.

The palm-oil growing project kicked off with 11,000 hectares on Bugala in Kalangala Island.  More land—7,500 hectares—was allocated for the project on Buvuma Island to the east of Lake Victoria.

This, however left another 15,000, which government is trying to acquire. Besides Sango Bay, the government also plans to extend the crop to other lake basins like Mayuge in eastern Uganda.

Under the MoU, the government was to upgrade and maintain the Masaka - Bukakata, Luuku- Kalangala roads, provide functional ferry services, and push further towards Bugala island of Kalangala, and provide a package of tax incentives for 25 years.

A bulldozer pulls down a fence of one of the squatters in Sango Bay area, Mr Faustino Muregyezi, in Bukaali Village on March 18.  PHOTO / FILE

The tax incentives included government paying VAT for the products by BIDCO from the first year of the project activities and ending after 11 years (until 2013).  Clause 3 of article 4 of the MoU stipulated that the company would then refund the VAT paid by the government with interest over a period of eight years in eight equal installments, including accrued interest, 12 years after.

 “The government has so far paid for 17 years and is still continuing while the chances of recovery appear to be slim,” Auditor General John Muwanga revealed in his latest report submitted to Parliament in late January.

This as, sources familiar with the matter told this newspaper, the matter was taken to Cabinet, which approved the decision to give Sango Bay land to BIDCO.

Top down project?

Across several villages in the three sub-counties under Sango Bay estate, anxiety and trepidation has gripped communities over the looming eviction from the land.

Mr Javira Kayondo, 25, a resident of Bukala in Ndolo Parish, Kabila is staring at a bleak future.

“Some of us our parents are buried on this land on which we were born; we don’t know anywhere else. So, when someone tells you that you are supposed to vacate because government has found an investor to develop the land, you can imagine the feeling,” Mr Kayondo said.

He asked authorities to verify the bona-fide land owners who should be allocated part of the land.

“I don’t know anywhere else. But in one of the meetings, the officials said the wise ones should start moving like yesterday. But go where, if you don’t even have money to start afresh?”

Another resident, Isaac Bigirwa, claims his family has lived here for the last 80 years. He is also relieved that the government is taking over the entire Sango Bay.

For the last decade, he has been at loggerheads with the family of Faustiono Muregyezi, whose title was recently cancelled.

Unknown individuals attacked his family in the night last August and razed down his house. He said police have not helped him.

The Bukala A Village chairperson, Mr Eugenius Ssenganda, said while government urged all residents across the three sub-counties to register on which basis verification and possible compensation will be undertaken, they remain oblivious to the next course of action.

“I have been chairman here for 33 years and I know of some individuals who were born on this land, and it is all they have known. I think the most logical thing to do is to give them some land for their lives to continue,” he said.

Ms Agnes Namusitwa, the chairperson of Mutukula town council in Kakuuto, in whose constituency is home to some 10,000 people, accused government of barely engaging locals in regard to the project.

“At each meeting they have convened usually through the RDC’s office, they have been telling people to vacate as fast as they can. The communities turn to us for solace but what should we tell them?” Ms Namusitwa said.

“It is one of those top down projects, while at the same time they tell you how communities will benefit. We feel that we were left out in the planning process. Meanwhile, activities have been ongoing and the only person they consult is the RDC but still as local leaders we should be in the know and engaged,” she added.

The Kyotera County MP, Mr John Paul Mpalanyi, noted the lack of an environmental and social impact studies ahead of the project, which will start in June.

“Sango Bay forms almost 30 percent of the total district. As a leader, you would expect me to be upbeat but since they started gearing up last year, no one has ever seen fit to involve as the area representative,” Mr Mpalanyi said.

It is estimated that at least 10,000 residents will be evicted. Moses Ddumba, the former Kyotera RDC, who was moved to Kasese District,  last month said there are at least 300 are the bona-fide occupants who will be compensated.

“We have registered all settlers. The ones with a genuine claim are between 350-380 and will considered. A team from the Chief Government Valuer will be coming on the ground to evaluate what economic activities they have on the land on which basis compensation will be made,” Mr Ddumba said .

“It is also not true that many people are going to be displaced. Remember this was land that was once leased in 1933 for 99 years, which means most people who are here are encroachers. Nearly 70 percent of settlers have left,” he added

But Mr Mpalanyi added that district leaders have barely been involved.

“I have heard of a series of meetings concerning evictions, people are anxious and worried, but I don’t know the details. I regard most of what I know informal because it is me who has reached out to be briefed,” he said.

Mr Mpalanyi is also worried about the negative impacts associated with oil palm growing in other areas such as Kalangala and Buvuma such as migrant workers from other areas trooping the villages to work on the farms.

“We should know how we are going to benefit. It is about being open and involving the right people. They should not just come and claim the project is going to create 4,000 jobs, without involving us in the critical planning processes,” he said.

However, Ms Magomu said it is not deliberate to leave out local leaders.

“It is really in the early days, but first we had to ensure that the needed land is acquired and we have been working with the district technical people. Now that most things are clear, we will move into the process of sensitisation, and carrying out the pre-project studies as a necessity,” she  said.

“What should be expected is, in the next two-three years, we will be planning the project so there will be all kinds of work, including planting the nucleus growing area which will also serve as a nursery for seedlings we will give to the out growers. The crop takes three- four years and yields keep increasing up to about eight  years and then you’ll see the real palm oil getting out,” she added.

Last month, Prime Minister Robinah Nabbanja had a meeting of inter-ministerial agencies steering the project during which it was agreed that the project affected persons be assessed to establish the bona-fide occupants and the Chief Government Valuer undertakes their evaluation by mid-this month.


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