the economic valuation of the proposed ... - Nature Uganda

Table 9: Value of sugarcane for SCOUL out-growers in Mukono district, 2006
Description of cost items SCOUL Kakira
Area 15,000 22,000
Sugarcane (kg) 600,000 1,000,000
Price of sugarcane (Ushs/tonne) 20,200 (US$ 11.88)
Per hectare value of sugarcane based on out-grower prices (‘000 Ushs/ha) 808 918
Per hectare value of sugarcane based on out-grower sugar prices
(US$/ha)
Present value of the sugarcane at on out-grower sugar prices (‘000
Ushs/ha), based on a 5 annual ratoon, at a 22% Bank Interest rate
Present value of the sugarcane at on out-grower sugar prices (US$/ha)
based on a 4 to 5 annual ratoon, at a 22% Bank Interest rate
Value of a 7,186 ha estate of sugar cane out-grower sugar prices
(‘million Ushs), based on a 5 annual ratoon, at a 22% Bank Interest rate
Value of a 7,186 ha estate of sugar cane out-grower sugar prices (US$
million) based on a 4 to 5 annual ratoon, at a 22% Bank Interest rate
Source: Adapted from (New Vision, 2006; Uganda Land Commission, 2005)
4.2.2. Value of non-reproducible assets of
sugar factory (Land at the Company owned
nucleus sugarcane estate)
In valuing non-reproducible tangible assets of the
nucleus estate land is valued as cultivated land located
at the different sites. In Mukono District and the areas
neighbouring Mabira Central Forest reserve and SCOUL
sugar estate the land rates obtained from brokers ranged
between Ushs 500,000 to 1,000,000 per acre equivalent
to Ushs 1,250,000/ha and 2,500,000/ha. Therefore, if it
was a private land estate equivalent to 7,186 ha Mabira
CFR, without any other ecosystem values it would
Table 10: Value of land based on open market prices
Value of one unit of land
area
Land rates (range) (Ushs/acre) 500,000 – 1,000,000
475.2 540
2,822,861.53 3,207,161.99
1,711.88 1,886.57
20,285.08
23,046.67
12.30 13.56
fetch a value of Ushs 8,0982.5 – 17,965 million (US$
10.57 million to US$ 21.135 million) on the open land
market (Table 10). Economic sense would suggest that
SCOUL would not vie to buy such land if someone, i.e.
the Government, were giving it for free. If then the
government goes ahead and gives this land it would in
effect be providing an equivalent subsidy (US$ 10.57 –
21.14), on the basis of the land rates in the area alone,
to one of the three main sugar factories in the country,
thereby creating an un-level playing field in the market
place. Similar overtures might have to be extended to
the other sugarcane estates as well.
Land value (million Ushs/ha) 1,250,000 - 2,500,000 8,982.5 - 17,965
Value of equivalent land on the open
market (7,186 ha)
US$ 735.3 – 1,470.6 5,283,823.5 - 10,567,647
The Economic Valuation of the Proposed Degazettement of Mabira CFR | 2011 21