Biofuels bonanza? Sugarcane production and poverty in villages surrounding Budongo Forest, Uganda

In 2006 the Ugandan government attempted to give a large portion of Mabira Forest Reserve to the Sugar Corporation of Uganda Limited. The government argued the rainforest give away'' would contribute to economic development and create the opportunity for biofuel production. The proposal faced massive opposition from Ugandan civil society, which countered that deforestation would increase hunger and poverty. In order to help resolve the debate, this study examines the livelihoods of villagers living near a sugar factory and forest reserve in rural Uganda. We interviewed 821 households seeking to explore possible links between poverty and participation in sugarcane production at both the village and household level. Villages closest to the factory appeared wealthier than villages closer to the reserve. However, households pursued different livelihood strategies and invested in different components of wealth. It is therefore unclear whether the benefits of sugar or biofuel production outweigh the environmental costs of forest loss.