16/05/2012 (The Observer) - An early morning drizzle on a chilly Sunday morning on Bugala island in Lake Victoria creates a perfect scenario to debate the red flags raised by a section of environmentalists over the oil palm project. These environmentalists accuse the project for the increasing environmental degradation of the island.

“The helicopter circled around the island but I didn’t see any evidence of degradation. I even thought, the helicopter wouldn’t find space to land,” said Kanayo F. Nwanze Kanayo, the International Fund for Agricultural Development (IFAD) President, during his recent tour of the islands.

A new report titled ‘Land, life and Justice: How land grabbing in Uganda is affecting the environment, livelihoods and food sovereignty of communities’ released recently by Friends of the Earth International (FOEI) pins the oil palm project in Kalangala district for the growing deforestation. The report notes that the oil palm project, which currently sits on 10,000 hectares of the island’s land, has wiped away many trees. However, according to Maria Bradley, the outgoing Country Programme Manager for IFAD, there has been no change in the forest cover in Kalangala.

“The protected areas have never been touched,” she said before adding: “Where farmers have cut down some of their forest land, which is private land, they have been replanted into palm, which are also trees.”

She noted that of the 10,000 hectares, 6,500 hectares were bought by government from private individuals and leased out to Oil Palm Uganda Limited, a subsidiary of Bidco. The 3,500 hectares are under smallholder farmers also growing oil palm trees. Bradley also noted that the project has adhered to Nema’s requirements of keeping 200 metres of protective border from the lake to avoid runoffs and agricultural chemicals ending up in the lake.

The palm oil project in Kalangala was conceived in 1997 when IFAD approved the Vegetable Oil Development Project (VODP). As a result, government in 2004 signed an agreement with Oil Palm Uganda Limited (OPUL), which brought on board private investors to partner with government to push the crop. Originally, the total project cost was to be $60 million, consisting of an IFAD loan of $20 million, $33.1 million of co-financing from the private sector partner, $3.8 million from the government of Uganda and $3.1 million from beneficiaries.

However, due to an increase in the scale of the Oil Palm Subproject, the private investor and the government increased their contributions to $120 million and $12 million respectively, bringing the total cost to about $156 million. According to Willy Lugolobi, the LCV Chairman, Kalangala district, about 1/3 of the planted area was formerly grassland but is now green because of the palm trees and cover crops.

“All those allegations of environmental degradation are naked lies perpetuated by selfish people looking for funding,” said Lugolobi before adding: “There are people who want to justify certain projects and to do that, you have got to create a problem.”

Kalangala was years ago devastated by the coffee wilt which cleared the island of their major cash crop forcing everyone into fishing. And with illegal fishing methods, there has been growing concerns of fish depletion. Also, some farmers had resorted to charcoal burning as the only alternative source of income.

“Oil palm is so highly productive. You get about 4.5 tonnes per hectare compared to half a tone per hectare of an oil seed crop like soya beans, sunflower, corn,”

Bradley noted. Farmers have been able to produce oil palm fruit bunches totalling to 6,023 tons (worth Shs 2.41 billion) since 2010. As a result of this project, transport and communication on the islands have improved. A number of farmers have also opened up small businesses such as restaurants, hair salons, and poultry/piggery units, among others

For the second phase which started last year, IFAD has earmarked $53m for the project. The oil palm project will expand to Buvuma island in Mukono district where government has already secured 5,600 hectares of land, and will also focus on oilseed development around four hubs (Lira, Eastern Uganda, Gulu and West Nile) covering 43 districts.