Environment & Poverty Times No. 5

Forest or sugar

By Moses Masiga, ENR Africa Associates

In 2006, the Sugar Corporation of Uganda Limited (SCOUL) asked the Government of Uganda for an allocation of 7,100 hectares of Mabira Central Forest Reserve to expand its sugarcane production operations. The area requested represents about 24 per cent of the total area of the reserve.

SCOUL believes it will be able to increase sugar production and save foreign exchange between USD 20 million and USD 25 million each year. The corporation plans to produce between 1 and 12 MWs of electricity cogenerated from bagasse – the residue of sugar cane after extraction. SCOUL says that in the course of the project 3,500 jobs will be created and a new road network of 300 km will be developed, plus the corporation will be paying additional taxes to the government. The sugar company pledges to preserve the ecology of the remaining part of the Mabira reserve and to participate in tree planting programmes in the areas unsuitable for sugarcane production.1

Pro-conservation groups opposed to the SCOUL plan believe the Mabira reserve is an area of unique biodiversity, with bird, plant, primate, butterfly and tree species that need to be conserved. The reserve also contains important medicinal plants. They also feel the forest has great potential as an ecotourism destination and refuge, as the forest is located close to large urban centres. The forest also brings long-term benefits, not only in terms of timber and forest products, but also as a repository for water resources and as a carbon storage facility. The pro-conservation groups say the SCOUL project could endanger the reserve’s delicate hydrological cycle and a considerable number of people living around the reserve who are dependent on forest products for their incomes will lose their livelihoods. They say the Ugandan public is opposed to any change in the reserve’s status.

While SCOUL has stated the potential benefits of its plan – on which it bases its request for allocation of reserve lands – these benefits have neither been quantified nor clarified. Pro-conservation groups, led by NatureUganda, commissioned this economic evaluation on what to decide. The Sugar corporation SCOUL says the annual stream of net benefits of sugarcane growing represent a better land use option than the conservation of the Mabira reserve as it exists now: it calculates net benefits of USD 3.6 million per year from sugarcane as opposed to USD 1.1 million per year from conservation.

However, such a calculation by SCOUL is based only on a short-term gain as the economic life of a sugarcane stand is at the most five years. The economic life of the natural tropical forest stand can stretch over a 60-year period. When the present value of the standing crop of timber alone (excluding other uses) was compared to the present value of net benefits from sugarcane growing, conservation of the forest yielded a greater long-term benefit than sugarcane of USD 35.5million compared with USD 29.9 million from sugarcane growing. When the value of ecological services was added to that of the standing crop of timber, conserving the forest reserve as it exists registered a far higher net present value of USD 48.8 million.

The National Forestry and Tree Planting Act of Uganda have provisions for compensation if previously reserved lands are degazetted. Also, Uganda’s social and environmental policies are clear on compensation. Therefore if the authorities decide to allow SCOUL’s project – despite the argument of pro-conservation groups that conservation of the Mabira is a better alternative than sugarcane growing – the developer must grant compensation, estimated at USD 48.8 million. Also, before the change in land use, an Environmental Impact Assessment (EIA) process should take place in order to satisfy legal, social and environmental policies of the government of Uganda.

Despite recent pronouncements from the Government of Uganda, it is not entirely clear that the issue of degazetting Mabira Central Forest Reserve has been put to rest. The debate continues to re-surface in Uganda.

1. The Monitor Newspaper, 2007; and New Vision news Paper, 2007.

From Yakobo Moyini, Moses Masiga, Achilles Byaruhanga and Paul Ssegawa (2008) Economic Evaluation of the proposed degazettement of part of Mabira Central Forest Reserve.

 Forest versus agriculture – the case of the Mabira forest reserve

The Mabira forest reserve, on the shores of Lake Victoria in Uganda, hosts valuable wildlife, serves as a timber resource, provides ecosystem services for the water balance, and the rainforests represent a tourist destination. Following a proposed plan for clearing one third of the reserve for agricultural use, the values of the forest were calculated by local researchers. This economic evaluation of the forest shows that, from a short-term perspective, growing sugarcane would lead to more economic benefits than maintaining the forest reserve, with a return of 

World Poverty Distribution

USD 3.6 million per year in contrast to USD 1.1 million per year for conservation. However, sugar cane production is only optimal during a short time span of five years. When comparing both land use alternatives over the lifetime of the timber stock, 60 years, the benefits from the forest, and the ecosystem services it provides, exceed those of the sugarcane planting.