Why sugarcane outgrowers oppose Museveni zoning policy

Angry. Sugarcane outgrowers in Ngogwe Sub-county confront Buikwe District chairperson Mathias Kigongo when he attempted to inform them of the presidential directive in Ngogwe Sub-county last week. PHOTO BY JESSICA SABANO.

What you need to know:

  • Skeptic. The directive has drawn mixed reactions from key section of outgrowers in Greater Mukono districts of Buikwe and Kayunga, who say it is a calculated move to favour only well-established sugar producers more than new sugar millers and kill the spirit of competition among sugar producers.

BUIKWE.

On April 28, President Museveni issued a directive to district leaders not to license any new sugar factories unless their source of sugarcane is guaranteed.

Mr Museveni observed that some sugar companies have been licensed without any clear source of raw materials or established outgrower networks, forcing them to hoodwink farmers to sell canes to them in total disregard of the farmers’ running contracts with established sugar companies.
The President also directed that for a new sugar factory to be established in an area, it must be at least 50km away from an already existing one.

Mr Museveni also warned that failure to adhere to the zoning policy had created a crisis in the sector and has forced sugar prices upwards.

Currently, a kilogramme of unpacked sugar, which was sold at Shs4,600 six months ago, goes for Shs6,000, while packed sugar is now selling at Shs7,000 a kilogramme, up from Shs6,000.

The President also said the police would step in where necessary to ensure compliance and help control the abuse of ‘territorial integrity’ of the already established sugar companies.

“… no sugar mill or company shall be permitted to seek or purchase sugarcane from outgrowers from another sugarcane zone, more so where the outgrowers have an existing commercial understanding with another sugar mill,” the President directed.

Outgrowers not happy
But the directive has drawn mixed reactions from key players in the sector, especially sugarcane outgrowers, who view it as a calculated move to kill the spirit of competition among sugar producers. A section of outgrowers in Greater Mukono districts of Buikwe and Kayunga claim the zoning policy favours only well-established sugar producers more than new sugar millers.

“The presidential directive is unfair and stands to favour only giant companies. For instance, the requirement that one sugar mill has to be situated 50kms away from another, obviously means that some new sugar mills will close business because they do not meet this requirement,” Gerald Muwonge, the chairperson of Kayunga District Sugarcane Farmers’ Association, says.

The new sugar companies in Greater Mukono include GM Sugar at Kitogoma Village, Buikwe District and Ssezibwa Sugar Factory at Kayanja Village in Mukono District.

Mr Muwonge says many of their members had given up growing sugarcane because of accumulating arrears which Sugar Corporation of Uganda Ltd (Scoul), owes them, resulting from unpaid cane supplied. Kayunga District alone has about 8,000 sugarcane farmers.

“There is a hidden agenda in the President’s directive, which we shall not accept,” Mr Moses Katabaruka, a sugarcane farmer in Kayunga, says.

The sugarcane farmers also say the new sugar companies pay them better and cash on delivery for their cane compared to the traditional sugar producers, including Scoul, which pay them one month later after they have supplied the sugarcane.

“Scoul has to give a farmer a harvest permit before he/she harvests the cane for them to buy it, but GM doesn’t,” Mr Muwonge says.

By issuing a directive, the outgrowers claim the President is contradicting his earlier commitment of empowering local producers and boosting household incomes.

He says the presidential directive will be difficult to implement unless all the sugarcane farmers are brought on board and their issues addressed.

“They (government) need to first consult the outgrowers on that issue of zoning rather than imposing it on us,” he said in a telephone interview with this newspaper recently.
But Mr Don Wanyama, the senior presidential press sectary, says the directive aims at streamlining the sugar industry.

“The President only intervened to ensure that the sugar policy is forced to solve the problem of unsustainability in sugar production. So, he wants an organised sugar industry that can benefit all stakeholders and nothing else,” Mr Wanyama says.

However, Mr Patrick Dhikusoka, the senior general manager in charge of administration at Scoul, says he is happy that government has come up to implement the National Sugar Policy, which was introduced eight years ago.

“The President is not introducing anything [new], what he says in already in the sugar policy. With this directive, all the stakeholders, including the farmers, manufactures and consumers, will benefit. Since manufacturers will be producing to full capacity, government will be getting more revenue from VAT,” he says.

He says by enforcing the policy, government would save the sector from plunging into the Kenyan situation where nearly eight sugar mills are concentrated in the Western region.

“They are all competing for the same cane and as a result, they all produce only 650,000 tonnes of sugar against a demand of 860,000 tonnes, leaving a 210,000 –tonne deficit. We really want to avoid such a scenario,” he says.

Scoul is operating at a low capacity of 65,000 tonnes rather than 90,000 tonnes at full capacity –a situation blamed on sugarcane poaching, according to Mr Dhikusoka.
Currently, Uganda has 10 sugar factories and more 10 others are set to join the industry in the near future.

During a meeting in Kangulumira Town in Kayunga District to discuss the President’s directive last week , the farmers resolved to march to Parliament soon and present a protest memo to Speaker Rebecca Kadaga.

“We are going to organise our colleagues in Busoga region to join us and after meeting the Speaker, we shall march to State House to meet President Museveni,” Mr Muwonge says.

By Fred Muzaale, Herbert Mugagga
& Chris Kisekka