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The Economic Valuation of the Proposed Degazettment of Mabira CFR ___________________________________________________________________________________ 4.0. EVALUATION OF DECISION TO CONVERT MABIRA CFR FOR SUGAR CANE PRODUCTION 4.0. EVALUATION OF DECISION TO CONVERT MABIRA CFR FOR SUGARCANE PRODUCTION 4.1 Sugar Production Model for Uganda Uganda’s sugar industry employs a mixed production model consisting of a nucleus sugar 4.1 cane plantation SUGAR PRODUCTION which is MODEL normally FOR owned and production managed and quality by a depending sugar company on the soil fertility. and registered UGANDA and non-registered out-grower farms. The nucleus estate is often fairly large Uganda’s and supplies sugar industry more than employs 50% a mixed of sugarcane production to the The mill sugar in companies order to provide secure sugarcane some guarantee of a certain model of throughput consisting of for a the nucleus plant sugar (Figure cane 3). plantation The Sugar quantity Company and acceptable also owns quality a processing from out-growers plant by which (Serunkuma is normally and owned Kimera, and managed 2006). by For a sugar a farmer the to provision become of an standard out-grower land preparation, he has to seedlings, be company registered and at registered the out and grower non-registered Department out- of the agrochemicals, Company. supervising The successful production applicant and technical receives a quota of the expected production and grower farms. The nucleus estate is often fairly large assistance quality depending to all out-growers. on the The soil supporting fertility. service and supplies more than 50% of sugarcane to the mill costs are deducted from the total price to be paid to The sugar companies secure sugarcane of a certain quantity and acceptable quality from in order to provide some guarantee of throughput for small farmers at the harvest time. With the level of out-growers by the provision of standard land preparation, seedlings, agrochemicals, the plant (Figure 3). The Sugar Company also owns a follow up on extension, farm practices and cane quality; supervising production and technical assistance to all out-growers. The supporting processing plant (Serunkuma and Kimera, 2006). For a it is envisaged that the sugar processing companies are service costs are deducted from the total price to be paid to small farmers at the harvest farmer time. to become With the an out-grower level of follow he has to up be registered on extension, able farm to establish practices production and conditions cane quality; on the registered it is at envisaged the out grower that Department the sugar of the processing Company. The companies out-grower are farms able that to are establish identical to the production conditions on successful conditions applicant on the receives registered a quota out-grower of the expected farms that are identical to the conditions on their their own own nucleus plantation. Figure Figure 3: 3: Centralised Centralised and and contract contract farming farming model model in sugar in sugar companies companies in Uganda in Uganda Sugar company nucleus plantation Source: Uganda Land Coalition (2006) Source: Uganda Land Coalition (2006) Sugar company – the sponsor Company owned sugar factory Company’s out growers Department Registered out growers Association Nonregistered out growers _____________________________________________________________________ 21 18 The By Economic Yakobo Valuation Moyini, of PhD the Proposed Degazettement of Mabira CFR | 2011
A registered out-grower is a self-employed farmer usually a smallholder who owns or leases land, and produces and supplies sugarcane under contract to a plantation sugar company. The size of the small farmer’s land varies from a minimum of 2 ha to larger farms with up to 400 hectares or even more. The company retains exclusive control over purchase and marketing of the out-grower–supplied sugar (Welch, 2004). The out-growers however, retain the risk of growing, harvesting and transporting their quota of cane to the sugar mill as per production contract and under the company’s supervision. The company engages to buy the estimated quota of cane agreed on, to provide technical advice, help with mechanical land preparation (bush clearing, ploughing and harrowing), planting (selection of seeds) and training and can, if required, provide financial aid in the form of loans. The company charges for all these services to the out-grower. It should also be noted that there is another category of out-growers, the non-registered small farmers whose aggregate supply of sugarcane to companies is growing. These farmers are, however, not guaranteed a market from the companies. From the status of land ownership by the three leading sugar production firms; SCOUL’s nucleus estate represents seventy five (75) percent of its total land compared to fifty nine (59) percent and 54.5 percent for Kinyara and Kakira, respectively. Kakira has the largest combined sugar estate totalling 22,000 hectares followed by SCOUL totalling 15,000 hectares and Kinyara totalling 11,000 hectares (Table 8). The Sugar Corporation of Uganda Limited (SCOUL) therefore has the largest nucleus estate and the smallest area of outsourced cane (from 3,000 ha of small outgrowers). SCOUL also utilizes 1,000 hectares of land that is directly leased from private suppliers. Among the three estates, therefore, SCOUL obtains only twenty five (25) percent of its cane from outgrowers compared to forty and forty five percent for Kakira and Kinyara, respectively. Since they rely a lot more on the cane grown in the community, Kakira and Kinyara have to build strong links with local communities and authorities. The sugar companies depend on the stability of the land tenure system and the contracts they have with farmers. Kinyara has diversified sugarcane sources and has both large and small scale outgrowers, and large self funded groups. Kinyara may therefore have the most secure sugarcane estate. Both SCOUL and Kakira have little diverisification and carry the risk of their farmers defecting to other processors, or as in the case of Kakira forming their own sugar processing company. In addition, SCOUL still has 6.6 percent of its nucleus estate on private land, and as such relies on the land owner’s willingeness to continue under the current arrangements. These conditions precipitate the desire for SCOUL to expand its nucleus estate into the forest reserve. Table 8: Status of land ownership of Uganda’s sugar factories Classification of land owned SCOUL (ha) (%) Kakira (ha) (%) Kinyara (ha) (%) Nucleus estate 12,000 75 11,000 54.5 6,400 59 Government of Uganda lease 1,000 4.5 Private land leases 1000 6.6 Outsourcing 3,000 25 10,000 45.5 4,600 41 Large private estates - 800 7.2 Small out-growers 3,000 25 10,000 45.5 2,400 21.8 Large self-funded 1,400 12.7 Total 15,000 100 22,000 100 11,000 100 Source: Adapted from Uganda land coalition (2005); Welch (2004) The Economic Valuation of the Proposed Degazettement of Mabira CFR | 2011 19
Page 1: THE ECONOMIC VALUATION OF THE PROPO
Page 4 and 5: THE ECONOMIC VALUATION OF THE PROPO
Page 6 and 7: ACRONYMS AND ABBREVIATIONS SCOUL Su
Page 8 and 9: for in the National Forestry and Tr
Page 10 and 11: 5.0. THE CONSERVATION OPTION 31 5.1
Page 12 and 13: List of Boxes Box 1: Out-growers pr
Page 14 and 15: The pro-conservation groups who are
Page 16 and 17: Figure 1: Map of Mabira CFR showing
Page 18 and 19: The Economic Valuation of the Propo
Page 20 and 21: which include schist’s, phyllites
Page 22 and 23: Wattled Starling(Creatophora cinere
Page 24 and 25: Restricted-range butterflies record
Page 26 and 27: The demand for sugar has also been
Page 28 and 29: Table 7: Projected sugarcane produc
Page 32 and 33: 4.2. THE VALUE OF THE SUGAR SECTOR
Page 34 and 35: 4.3. COST OF PRODUCTION AND THE DET
Page 36 and 37: additional sugarcane they need from
Page 38 and 39: Table 11: Estimate sugar estate lan
Page 40 and 41: ) Opportunity of SCOUL leasing land
Page 42 and 43: then the government goes ahead and
Page 44 and 45: expected from the environment (Lett
Page 46 and 47: Table 15: Example of links between
Page 48 and 49: PVB = PVC = Where: 36 ∑ = t n t =
Page 50 and 51: Table 16: Value of Growing Stock Cl
Page 52 and 53: ased on household livelihoods. Bush
Page 54 and 55: 12,078 per annum by the number of h
Page 56 and 57: part of the area proposed for degaz
Page 58 and 59: The Economic Valuation of the Propo
Page 60 and 61: to mature. Subsequently, conservati
Page 62 and 63: REFERENCES Adger, N., Brown, K., Ca
Page 64 and 65: Multinational enterprises in the pl
Page 66 and 67: Primates of Africa. The IUCN Red Da
Page 68 and 69: Edinburgh University, Scotland. Sim
Page 70 and 71: ANNEXES ANNEX 1 BIODIVERSITY DATA T
Page 72 and 73: Family Species Family Species Rutac
Page 74 and 75: Family Species Family Species Morac
Page 76 and 77: Table A2: Species list of birds rec
Page 78 and 79: Britton No. Species Common Name 467
Page 80 and 81:
Britton No. Species Common Name 716
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Britton No. Species Common Name 103
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Table A3: Species list of Mammals (
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Table A4: Amphibians of Mabira Fore
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Tirumala petiverana African Blue Ti
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ANNEX 2 INVENTORY DATA Table III Ma
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Fig AI Icut id nonsimu sperurbitiac
Page 96:
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