Sunflower oil processors urge govt remove levies in production chain

05Dec 2019
The Guardian
Sunflower oil processors urge govt remove levies in production chain

SUNFLOWER oil processors have suggested the need for the government to revise the Value Added Tax (VAT) charged in the sector to increase productivity.

Processors said the tax has been proved a hindrance to the growth of the factories thereby giving room to foreign investors to penetrate into the sector.

They were speaking on Tuesday at a meeting with the Agriculture deputy minister Omary Mgumba who visited Singida Region to inspect various agricultural projects. They appealed to the government to remove the levy from the whole chain of sunflower oil production and if possible to provide subsidy in the purchase of improved sunflower seeds and other inputs.

“Sunflower is always in small supply and during harvesting season we find ourselves not alone, we have to bear stiff competition in securing the crop for extraction, and sometimes we deliberately lay our machines idle until when we have much sunflower because when we have adequate crop we can produce up to 300 tonnes of sunflower oil per day, while the machines have a capacity to produce 750 tonnes per day,” said Nelson Mwakabuta, Public Relations Manager of Mount Meru Sunflower factory.

Mwakabuta asked the government to provide farmers with seeds subsidy as well as increase production thereof, taking into consideration seed quality. He said traditional seeds yield bigger crop weight but have little oil.

He said there is a type of traditional seeds such as Jupiter-chotara which yields 75-80 kgs per bag, but modern hybrid seeds yield between 60 to 65 kgs per bag.

He said in shops hybrid seeds are sold at 7,000/- per kilo and added that last year a better quality of seed – ‘Hisen 33’ was brought into the country that is said to withstand both drought and heavy rains sold at 35,000/- per kilo, a price many farmers could not afford.

The Mount Meru Sunflower factory official said there have been unfair competitions in the market within some small sunflower extractors who do not pay any tax.

The director of Singida Fresh Oil Mill Khalid Ally Omary asked the government to remove levies from the whole sunflower oil production chain in respect of local producers so as to bring about meaningful competition from importers of sunflower oil.

He said they try their level best to go in tandem with the speed of the fifth-phase government but they are hindered by various government levies, and asked for temporary tax exemptions at least for importing essential equipment and spare parts for their factories.

He said Fresh Oil Mill have a big sunflower oil extracting factory in Singida, but it has remained idle for the past three years due to failure to obtain tax exemption for importing vital spares.

He said right now they have a middle-capacity plant producing 720 tonnes of oil per month and has employed 167 people but again, they are confronted by high VAT rates in the production chain, necessitating high retail price that cannot compete in the market.

Responding to some of the demands, Deputy Minister Mgumba said many complaints referred are crosscutting that touches one ministry, hence since the fifth-phase government often listen to its people, he will sit with his colleagues to see how best to correct the situation.

Speaking on the deficiency of seeds, Mgumba said the government has already enabled ASA to produce enough quality seeds and advised sunflower oil extractors to enter into agreements with farmers to give them loans to buy seeds and then settle the issue during harvest.

He said the only cure in competing with the importation of oil is for them to produce enough oil to satisfy the local market.

He also directed the Singida District Administrative Officer to convene a meeting involving owners of oil processing plants, farmers and banks to discuss the challenges and how to increase sunflower oil production.

During the visit the deputy minister, accompanied by various government officials in the district, had the opportunity to see for himself sunflower growing in various wards and villages as well as sunflower oil extraction factories.

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