Kampala – More than 1,000 tobacco farmers in the Bunyoro sub-region are set to smile their way to the bank in compensation for denied payment since 2017 by private companies.
Government has revealed that the compensation of tobacco farmers is expected to start in two weeks following a delay.
The Minister of State for Industry, David Bahati, blamed the delay in payments to the verification process aimed at ascertaining the affected farmers.
He was responding to a matter of national importance raised by Hon. Asinansi Nyakato (FDC, Hoima City) during plenary sitting on Thursday, August 5 (2021).
“It is true that Parliament appropriated UGX11 billion in the 2020/2021 supplementary budget for compensation of the farmers. We do want to apologise that the verification took long,” Bahati said.
The Deputy Attorney General, Jackson Kafuuzi, told the legislators that government is in the process of signing a Memorandum of Understanding (MoU) with the companies.
“This is a pledge government made out of goodwill because the companies are private. They have to pay back the money to government because it is a debt they owe to Ugandans,” Kafuuzi said.
He added that the Ministry of Trade has collected all the required data to inform the MoU.
“We have to agree with the companies that the claims found by the Ministry of Trade are the amounts they owe farmers. We intend for payments to begin in two weeks’ time and by then, MoUs would have been signed,” he said.
He also allayed fears that the companies in question closed and that government would not be able to recover the funds, thereby causing a financial loss.
Kafuuzi said that government has been in negotiation with the companies and they raised concern over the need for government to ensure the claims from farmers are in tandem with what they will be expected to reimburse.
“I will give you an example, 500 people went to court and they are claiming about UGX 2.5 billion. The companies are in court contesting that and we said we shall clear those that are not contesting now. I am asking for patience from you and we shall present the MoUs when they are ready,” he said.
In raising the matter, Hon. Nyakato questioned why the farmers have not been paid up-to-date, even after the funds were appropriated.
“It is my request that government provides farmers with a payment plan and effects their payments,” she said.
Nyakato also called on the Ministry of Trade to collaborate with tobacco companies to update and make public a credible register of the beneficiaries, following inconsistencies in the list that the ministry has.
Hon. Pius Wakabi (NRM, Bughaya County) asked government to expedite the process to pay the farmers, saying that the farmers have suffered for long.
“In May this year, a tobacco farmer committed suicide after waiting for a long time. I am not even 40 years but when you consider the rate at which my head is turning white, it is the pressure from tobacco farmers,” he said.
Hon. Rose Obiga (NRM, Terego district woman) urged government to consider compensating tobacco farmers from West Nile, whom she said have for long petitioned government.
“As we consider Bunyoro region, it is my humble appeal that West Nile should be considered for the same,” she said.
Bugweri County MP, Abdu Katuntu advised government to exercise caution while handling the matter, citing the need to sign a MoU with the companies before payments are made.
“We need to know the legal regime that governs this compensation. Is it ex-gracia, such that we know that these private companies have done bad business and we are not paying on their behalf but we are trying to help our people or is it a commercial arrangement,” he inquired, adding that “We should also ask ourselves what message we are sending to our people – that you fail in business and government compensates? We need a clear policy on compensation.”
The Deputy Speaker, Anita Among, directed the Attorney General to present the MoUs to Parliament before any payments are made.
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NIMATIBACK and Continental Tobacco purchased tobacco leaf from farmers who say they had contracts that stipulate the terms that include supplying the agreed quality and quantity while the tobacco companies provide inputs and pay the farmers once supply is done.
The two companies however failed to pay a total of Shs11 billion for tobacco leaf supplied between 2017 and 2019 by farmers in Bunyoro.