Wednesday February 21 2018

Sugar producers petition government over proposed law

Processing. One of the sugar plants in Jinja

Processing. One of the sugar plants in Jinja District. PHOTO BY DENNIS EDEMA 

By Jonathan Adengo

Kampala. A section of small scale sugar producers have petitioned government over the proposed sugar Bill which they say is against the spirit of liberal economies such as Uganda.
The small scale millers say the Bill is one sided and geared at catering for the interests of the processers while disregarding the interests of those who are producing raw materials for this industry to survive.
President Museveni in his letter to government said the issue of licensing sugar mills without regard of their source of raw materials has caused anarchy among the sugar sector.

He also said the companies which have no farmland or established out-grower networks entice contracted farmers of other sugar companies by offering them quick money in total disregard of the farmers’ contractual obligations to the established sugar companies.

“Sugar cane poaching has led to unreliability of the sugarcane inventory system for the established sugar companies,” he wrote.
However, some of the small scale millers such as Mayuge Sugar industries who are affected by the proposed sugar policy and Bill say this will call for automatic reallocation of factories which are within the 50km radius.
Mr Omar Bongo Muwaya, the Mayuge District chairperson in a letter to the president, said such a move would have economic consequences on the people in the area and the greater Busoga region as the presence of multiple factories in the area has diverse socio-economic benefits.
He said one such benefit is that farmers enjoy cash payments immediately upon delivery of the cane to the factories as opposed to credit payment systems.

He said the small players have been able to employ more than 13,500 Ugandans and also helped them with interest free loans for sugar cane plantation and transport, which has improved production capacity and household incomes in the country.
However, Mr David Kiiza, the officer in charge of sugar at the ministry of trade says the government received the small millers grievances and cabinet would sit to debate the issues.
He also said the Bill is expected to be passed at the end of March after the Members of Parliament on the Trade Committee have returned from other abroad.

Dr Mike Ibrahim Okumu, a lecturer at the School of Economics in Makerere University said the sugar industry has since 2006 witnessed an inflow of millers from four millers that is Kakira Sugar Ltd, Kinyara Sugar Ltd, Sugar Corporation of Uganda Ltd and Sango Bay Estates Ltd, with over six more millers coming on board and many more with licenses but are yet to set up shop.
He said there has been an increase in capacity installation, which in addition to the increase in the number of millers has contributed to a jump in sugar production from 193,769 Metric Tonnes in 2004 to more than 500,000 MT as of 2015.