Sugarcane farmers in Kinyara have secured an arbitrator who will mediate between them and Kinyara Sugar Factory management as they push for increased payment for their cane, among other issues.
Kinyara Sugar pays Shs78,500 to outgrowers per tonne of sugarcane they supply to the factory. However, the farmers claim that this is the lowest payment in the country and the East African region.
More than 1,000 sugarcane farmers, led by Mr Mahmoud Kazimbiraine, have petitioned the Centre for Arbitration and Dispute Resolution (CADER) to have the price increased to match that in Busoga region.
The farmers in Busoga, who supply Kakira and Lugazi sugar factories among others, earn about Shs105,000 per tonne.
“We also want a share of the proceeds from the molasses and power generated out of bagasse,” Mr Kazimbiraine said.
Currently, Kinyara generates more than 10 Megawatts of power of which, over 3 Megawatts are sold to the national grid. The factory also sells molasses to business people.
Mr Kazimbiraine argues that since the farmers supply more than 60 per cent of the total cane crashed by Kinyara sugar factory, they are entitled to a share from the income generated from power and molasses.
On December 2, 2015, the farmers led by Mr Kazimbiraine wrote to Kinyara sugar factory, demanding the revision of the Cane Production Contract (CPC) to include the farmers’ demands but the management of Kinyara did not respond to them forcing the farmers to seek for an arbitrator.
CADER has since appointed Mr Wilson Keezi to mediate.
Mr Keezi is one of the mediators in the ministry of Justice and Constitutional affairs.
What the law says
Clause 13 of the Cane Production Contract states that “in case of any dispute arising in the performance of this contract, the aggrieved party should forward its complaint to the Out grower department through the agriculture manager requesting for the appointment of the mutually agreed arbitrator. If the other party does not heed, the aggrieved party should seek for the appointment of an arbitrator by the president of the Uganda law society.”