Igara Growers Tea Factory’s operations disrupted as farmers halt green leaf supply over unpaid dues 

UGANDA – The Igara Growers’ Tea Factory in Uganda is currently grappling with a severe crisis, with tea farmers in the Buhweju district facing four months of unpaid dues for their green leaf deliveries.  

The majority of farmers have halted the supply of green leaves to the factory, significantly impacting its operations. 

Frustration has mounted among farmers as the board of the factory has failed to settle payments for the green leaves supplied over the past four months. This crisis has led to a standstill in operations, with machines inside the factory remaining inactive. 

The financial strain on the farmers is intensified by a sharp decline in green leaf prices, plummeting from US$0.16 per kilo to a mere US$0.039-0.052. For many farmers, tea represents their primary source of income, making the unpaid dues a pressing concern. 

Nuwagaba Naboth, Director of Finance at Igara Growers Tea Factory, acknowledged the financial struggle, stating, “While these owe the factory in excess of over 3 billion shillings, the factory isn’t sure whether they will clear the arrears.” 

The Buhweju farmers, constituting a significant portion of the factory’s 7,000-plus shareholder base, are now considering establishing their own independent tea processing facility due to the prolonged payment delays. 

Igara contributes about 10% of Uganda’s tea production from 28 tea factories. Igara is the largest smallholder tea factory Company in the Country. 

Muhereza Samuel, Chairman of the Board at Igara Growers Tea Factory, shed light on the financial complexities, explaining, “Currently, a kilo of green leaf costs between Ush 150-200, while a kilo of processed tea in the auction market costs USD 1.2. The factory is operating at a cost of USD 0.9.” 

In response to the crisis, the factory is exploring options to secure advances from tea brokers in Mombasa, aiming to use these funds to settle payments with the affected farmers. 

This tea crisis is not confined to Igara Growers Tea Factory alone, as six other factories in Tooro and Kigezi sub-regions have also ceased operations due to the alarming drop in tea prices.  

With the situation becoming an industry-wide challenge, farmers are urgently calling on the government to intervene and address the root causes before the crisis escalates further. 

In Uganda, tea is the third export commodity by value. The volume in the Tea market is expected to reach 14.7m kg by 2028 with an anticipated volume growth of 6.2% in 2025, according to Statista.

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