The Uganda National Farmers Association (UNFA) have asked the government to sell to them the Dairy Corporation Ltd.
The government had intended to sell the corporation to Malee Sampran Plc - a Thai firm - at $1 but now the farmers say they could pay $10,000.
While appearing before the Finance committee of Parliament last week, farmers' representatives led by Mr Yoasi Makaara, told MPs that it was unfair for the government to sell a farmer's owned entity to a foreigner.
"DCL was started by farmers who have been sustaining it by providing milk on credit for a long time. $1 is peanut. We can buy it at more than $10,000," Makaara said.
The committee was generally in support of the farmers' position to take over DCL instead of foreigners.
"If DCL is given to farmers, we are sure that our local people would be employed to do the work other than giving a foreigner who would bring his fellow foreigners. At least for the first time let us give DCL to local investors," Mr Nathan Mafabi (Budadiri West) said.
Mr Guma Gumisiriza (Ibanda) and James Mwondha (people with disability) suggested that if the government insists on giving DCL to a foreign investor, farmers should mobilise themselves to set up their own factory.
"Even if Malee Sampran Plc takes over DCL, they would still come for your milk. It would be better for you to use your milk and give the surplus to them otherwise they would continue exploiting you. This is when you can sell milk at your terms," Mwondha said.
"If DCL goes the UCB [Uganda Commercial Bank] way, dairy farmers should get a loan and build their own factory in order to be competitive," said Guma.
The management of DCL had early opposed government's plan to hire managers from Malee Sampran Plc to run the corporation.
They instead want the government to go for a complete divestiture of the corporation through competitive bidding.
The DCL Board Chairman, Mr David Bigira, told MPs that they would prefer a competent investor to take over cooperation. "We shall only agree with the government to take on an investor who has the capital to put in the company. Less than that the corporation would completely collapse," he said.
The government in a surprise change of heart recently abandoned the $1 lease deal of the corporation and opted to hire managers from Malee Sampran to run the company.
However, the DCL Managing Director, Mr Charles Beisa, told MPs that the major constraint of the firm is not management but lack of investment, effective regulation of the informal sector and clear direction for the company.
"They brought the agreement for me to sign but I refused. I was supposed to be number one signatory but I could not sign for a company that does not exist in Uganda," Mr Bigira also told MPs.
Malee came into the spotlight a month ago after The Monitor blew off the lid on its financial strength. Using a qualified Chartered Accountant, The Monitor carried out a professional analysis of the accounts published by Malee on the Internet - which revealed that the company's profit and loss track record has consistently been making losses.
Further analysis of the accounts by The Monitor showed that Malee's loss-making trend left it with a very weak working capital position to take on a big investment in Uganda.
MPs demanded a halt to the sale forcing the government to abandon the deal as well.
