Hoima farmers rue shrunk market for their produce
Demand for fresh produce from the oil camps dropped to a paltry 2,490 kilograms in 2015, from 73,286 kilograms the previous year.
Thousands of farmers in Hoima are feeling the pinch from the slowdown of the oil and gas industry that has been in a lull for the past two years. Uganda’s petroleum industry has slowed down partly due to a stalemate with the government over award of production licenses as well as the prevailing low crude prices. Both factors have made the oil firms reluctant to increase their investment in the sector.
Some farmers Oil in Uganda spoke to relished the times when they were able to supply vast amounts of agricultural produce to the oil camps through Traidlinks, a non-profit organisation backed by some of Ireland’s leading businesses, including Tullow Oil. Traidlinks was contracted by Tullow Oil to build the farmers’ capacity and link them to the oil markets.
“I used to supply between 150 to 200 kilograms of vegetables every week to oil camps through Traidlinks,” recalls John Byaruhanga, a vegetable farmer in Buswekera, Hoima Municipality. “In two weeks, I would earn between seven hundred thousand to one million shillings.” However, the 55-year old farmer is now rationed and cannot supply more than 50 kilograms a week. Worse, the supply is also intermittent.
Byaruhanga is just one of the thousands of farmers who used to supply vegetables, maize flour, potatoes and other agricultural products to the oil camps.
Five years ago, farmers in oil-rich Hoima district were keen to sell produce to the camps accommodating oil workers in the district, but didn’t know how—and indeed for several years, the camps sourced their food from Kampala or even overseas. However, as exploration activities expanded and more companies moved into the sector, Traidlinks was at hand to link local farmers to the oil camps.
The Irish founded organisation set up an Enterprise Centre in Hoima in February 2012 and started by training farmers to improve their food standards. Consultants from the National Organic Agriculture Movement of Uganda were brought in to conduct the trainings. After the farmers had adopted the required farming techniques, Traidlinks started buying produce from them, cleaning it, packing it and delivering it to the oil camps.
The bubble bursts
However, after scaling down their operations, oil firms also significantly cut down on their purchases of local food stuffs from the farmers. The farmers preferred the oil market because it was more lucrative-in many cases offering twice the price offered by traders in the local markets.
According to John Bosco Kalule, the Traidlinks Agriculture Supply Chain Project Manager, over 120 farmers supplied food to Tullow camps every week. He said that the demand had been steadily increasing; from 12,966 kilograms in 2012, to 19,668 kilograms in 2013, and further to 73,286 kilograms in 2014, only for it to dip to 2,490 kilograms in 2015.
2015 is the year that Tullow Oil closed its Kisingya camp that accommodated close to 200 workers. Today the camp has less than ten workers. Tullow Oil and Total E&P were forced to take some austerity measures to cut operating costs that included closing or sharing camps and laying off workers. Total closed its Bugungu and Tangi gate camps and company workers now share the Buliisa camp with a handful of Tullow Oil workers who were lucky to retain their jobs.
Kalule explains that the severe reduction in numbers in the oil camps has had a big impact on the farmers because his organisation has been forced to rotate their supply in order to equally share the small market.
All is not lost however, according to Kalule, as Traidlinks is working hard to link the farmers to other retail markets across the country. “Farmers who got opportunity to sale their produce have appreciated and attained the standards. With a reduced market in the oil camps, we are linking them to other markets such as super markets,” he told Oil in Uganda.
In the meantime, the farmers will bear the low prices offered by local traders as they wait for the oil camps to fill up again.
Report by Oil in Uganda Staff