Since the end of last year dairy farmers in western Uganda have lost a major market of their produce as Kenyan authorities have locked out Ugandan milk.
"The whoe of this region is experiencing losses because farners can not meet their operational costs and are demoralised by the prices of milk. We dont have someone to buy the milk and we are giving it away free."
This is sad state of affairs for the region and the country.
Pearl Dairy's business model is to export up to 90 percent of its production, mostly to Kenya and sell the remainder locally. Its other markets are Rwanda, before the border closure a year ago and the Democratic Republic of Congo.
Overt the last three years Pearl Dairy has made significant in roads into the Kenyan market and as of last year, accounted for about a quarter of the milk market in Kenya.
Trouble begun at the end of last year when Kenyan authorities impounded Pearl Dairy's milk claiming it was counterfeit and turned back several of their consignments.
The Uganda government complained to their Kenyan counterparts and a 19-person Kenya team visited the country to ascertain that Uganda producecs all it exports, but the impasse has not been broken.
Hence the Biharwe factory's closure in February.
The ripple effect in the communities that supply the Pearl Dairy has been devastating.
Over the last two years of Pearl Dairy's operaion in the area, through their own extension services, some farmers increase more their yields to 11 liters a day per cow frrom the previous five liters. All this through better managment of their existing herds.
"We have been able to learn best dairy practices. I used to be pastoral farmer, grazing my cows over large areas, i no longer do that and my farm is now a commercial enterprise, my income frrom milk has gone up a lot," Raymond Kaweesi, a pioneer beneficiary of this initiative said.
He has been able to share the learnings and many farmers in his area have seen their fortunes improve as a result.
Pearl Dairy extension services reach more than 600 farms.
"Some farmers have already slaughtered their herds and sold them for beef. Imagine what it will take to get the back into production? Not only in terms of money but also lost trust," a regional leader wondered on condition of anonymity.
It is not clear what the problem is in Kenya.
Reports last year were that dairy darmers in Kenya had seen their farm gate pricecs falling signficantly as a result of the aggressive Ugandan entrants.
Existing big interests in the Kenyan market then decided to use underhanded methods to frustrate Uganda processors. They are clearly very powerful interests as no official communication has been forthcoming about Uganda dairy exports.
This is a blatant breach of East Africa Community protocals that allow for the frfee movement of goods and services around the five countries, that Nairobi is unwilling or unable to enforce in the case of dairy exports.
The dairty of western Uganda find themselves caught in the middle crossfire that is none of their making, that threatens to derail Uganda's emergence of a continental dairy producing nation.
Exports from dairy products roped in $150m in 2019, bettered only by gold and coffee in export receipts.
The closure of the Pearl Dairy plant in Biharwe, along the Masaka-Mbarara road, in February has seen demand for milk collapse in Masindi in the west, Kabale in the south west and Isingiro in the south.
"In our area alone at least 1000 liters go to waste daily which has a downward effect on the pricec of milk in the Mbarara and Kiruhura areas, the price has fallen to sh200 from sh800 per liter last year," David Mwine the chairman of the Rukaka Savings & Credit Cooperative Society and a dairy farmer in his own right.
"The whoe of this region is experiencing losses because farners can not meet their operational costs and are demoralised by the prices of milk. We dont have someone to buy the milk and we are giving it away free."
This is sad state of affairs for the region and the country.
Pearl Dairy's business model is to export up to 90 percent of its production, mostly to Kenya and sell the remainder locally. Its other markets are Rwanda, before the border closure a year ago and the Democratic Republic of Congo.
This has come about because in Uganda, due to lax regulation only about a quarter of all milk produced is processed. In Kenya not only is milk consumptrion more than triple that in Uganda -- 140 liters versus 40 liters per person annually, there is a higher demand for processed milk, more than two thirds of the market is processed milk.
Overt the last three years Pearl Dairy has made significant in roads into the Kenyan market and as of last year, accounted for about a quarter of the milk market in Kenya.
Trouble begun at the end of last year when Kenyan authorities impounded Pearl Dairy's milk claiming it was counterfeit and turned back several of their consignments.
The Uganda government complained to their Kenyan counterparts and a 19-person Kenya team visited the country to ascertain that Uganda producecs all it exports, but the impasse has not been broken.
Hence the Biharwe factory's closure in February.
The ripple effect in the communities that supply the Pearl Dairy has been devastating.
Over the last two years of Pearl Dairy's operaion in the area, through their own extension services, some farmers increase more their yields to 11 liters a day per cow frrom the previous five liters. All this through better managment of their existing herds.
"We have been able to learn best dairy practices. I used to be pastoral farmer, grazing my cows over large areas, i no longer do that and my farm is now a commercial enterprise, my income frrom milk has gone up a lot," Raymond Kaweesi, a pioneer beneficiary of this initiative said.
He has been able to share the learnings and many farmers in his area have seen their fortunes improve as a result.
Pearl Dairy extension services reach more than 600 farms.
"This ecosystem of farmers, traders and transporters built to support the 800,000 liter a day plant, is in danger of being broken up....
"Some farmers have already slaughtered their herds and sold them for beef. Imagine what it will take to get the back into production? Not only in terms of money but also lost trust," a regional leader wondered on condition of anonymity.
It is not clear what the problem is in Kenya.
Reports last year were that dairy darmers in Kenya had seen their farm gate pricecs falling signficantly as a result of the aggressive Ugandan entrants.
Existing big interests in the Kenyan market then decided to use underhanded methods to frustrate Uganda processors. They are clearly very powerful interests as no official communication has been forthcoming about Uganda dairy exports.
This is a blatant breach of East Africa Community protocals that allow for the frfee movement of goods and services around the five countries, that Nairobi is unwilling or unable to enforce in the case of dairy exports.
The dairty of western Uganda find themselves caught in the middle crossfire that is none of their making, that threatens to derail Uganda's emergence of a continental dairy producing nation.
Exports from dairy products roped in $150m in 2019, bettered only by gold and coffee in export receipts.
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