URN.The Bugisu Cooperative Union (BCU) has challenged the agreement signed between government and the Uganda Vinci Coffee Company Limited and asked parliament to terminate it.
The Bugisu Cooperative Union (BCU) has challenged the agreement signed between the government and the Uganda Vinci Coffee Company Limited and asked parliament to terminate it.
John Musira, the Board Vice Chairperson of the Cooperative Union on Tuesday told Parliament’s Trade Committee that the provisions in the agreement will demoralize coffee farmers, something that will affect the country’s economy.
The Bubuulo East MP also noted that coffee farmers had not been consulted by the government prior to the signing of the agreement.
On 10th February 2022, Ramathan Ggoobi the Secretary to the Treasury signed on behalf of the government a coffee agreement with Enrica Pinetti, an Italian investor and the Board Chairperson of Uganda Vinci Coffee Company Limited.
The company was given free land in the Industrial and Business Park at Namanve measuring 27 acres after it indicated its capability of establishing a coffee processing facility in Kampala. It will be given exclusive rights to buy a chunk of Uganda’s coffee and its concession will end in 2032, but is subject to renewal.
The company agreement with the government has provisions to exempt the Vinci Coffee Company from paying taxes including Income Tax, Pay As You Earn, Excise duty, and NSSF. This document has provisions that seek to subsidize this company by giving them a special tariff of 5 cents per unit in terms of electricity.
In his statement to the Trade Committee, Musira noted that the agreement is to negatively affect farmers and processers of coffee in the country and several people risk losing livelihood if the agreement is implemented.
Meanwhile, Robert Kabushenga, a coffee farmer also warned that the agreement is to create another avenue for corruption in the country if enforced.
The former Chief Executive Office (CEO) Vision Group also appealed to the MPs to reject the agreement and cautioned them to stand up for their constituents who are mainly coffee farmers.
Early this month, the Speaker of Parliament Anita Among tasked the Trade Committee to inquire into the coffee agreement following a query by the Opposition tabled by the Shadow Minister for Agriculture, Abed Bwanika.
Bwanika, asked for a cancellation of the agreement and holding accountable the government officials involved in the drafting and signing of the agreement saying that it is in contravention of the Constitution, the National Coffee Act and other laws.
The former presidential candidate said that the agreement needed to be canceled so that Ugandans who earn their livelihood from coffee are protected. Bwanika said that the agreement was discriminative to Ugandans and seeks to alienate coffee farmers and that the exemption of taxes is very disturbing and needs parliament to look at its impact on the economy.
Bwanika also says that there is no evidence that the Vinci company has experience in processing and exporting coffee and that giving the company authority to determine coffee prices contravenes Section 52 of the National Coffee Act, 2012 which gives the mandate to Uganda Coffee Development Authority.
