Farmers defy minister’s order, export sugarcane

Harvest. Farmers stand next to their harvested sugarcane ready for sale in Jinja District in April. Sugarcane growers in Busoga Sub-region have resorted to exporting the sugarcane to Kenya after sugar factories failed to consume the surplus. PHOTO BY TAUSI NAKATO

What you need to know:

  • The strike, which kicked off on July 1, is expected to continue until millers increase the price of sugarcane to at least Shs140, 000 per tonne.
  • A recent report indicates that mills have cut back on sugarcane consumption from about 650m metric tonnes per year to 430m metric tonnes.

Jinja. Sugarcane farmers in Busoga Sub-region have defied a directive by the Trade minister, Ms Amelia Kyambadde, banning the exportation of sugarcane to the neighbouring countries.
The minister rejected the move on grounds that exportation policy limits selling of raw materials of locally manufactured goods to foreigners, adding that the plan would hamper industrial growth.
However, the farmers have gone ahead to sign an agreement to supply sugarcane to west Kenya sugar company – Olepito Sugar Company.

The Memorandum of Understanding was signed on June 29, between representatives of Busoga Sugarcane Outgrowers Association (BUSGA) and Olepito Sugar Company.
Olepito Sugar Company agreed to buy sugarcane at Shs150, 000 per tonne.
Farmers agreed to supply 600 tonnes of sugarcane to Olepito Sugar Company on a daily basis.
The farmers stopped supplying sugarcane to millers in Busoga Sub-region following a reduction in its prices from Shs128, 000 to Shs120, 000 per tonne.

The spokesperson of BUSGA, Mr Godfrey Naitema, said they have decided to start exporting sugarcane because the available sugar factories have failed to consume the surplus.
“Currently, we are incurring losses of Shs2m per hectare, if you compare the current prices and the profits a farmer gets. The prices are too low, and the millers are offering low prices without negotiating with us,’’ he said.

Mr Naitema added that if Uganda is still under East African Community (EAC), they have a right to export their sugarcane.
“Laws under the EAC allow us to export our sugarcane unless they are abolished. If Uganda is exporting agriculture raw materials such as maize, water melons, passion fruits, pineapples, why not sugarcane,’’ he said.
Dr Fred Muhumuza, a renowned economist and researcher at Makerere University, said government should support regional marketing.
“If the farmers are putting in their money and their sugarcane are being bought at lower prices, it affects them because they would not want to export raw materials if there is sufficient demand for Uganda,’’ Mr Muhumuza said.

He said although the minister may have a point on how to protect the factories, she should not take a decision that undermines the farmers’ survival.
Mr Martin Luther Munu, a research analyst at Trade and Regional Integration, Economic Policy Research Centre, said exporting more raw materials is usually the reason why countries have a negative trade balance.

“The sugar industry is in one area where Uganda has done well in terms of agro-industrialisation. Therefore, companies should be supported to consume the cane so that we export sugar rather than cane in order to earn more foreign exchange,’’ Mr Munu said.
The chairperson of Uganda Sugar Manufactures Association (USMA), Mr Jim Kabeho, recently said factories are currently stuck with 800,000 kilogrammes of sugar due to reduction in its export volume to the neighbouring countries, which has also eventually caused the reduction in prices of both sugar and its raw materials.

Government move
Ms Kyambadde, in a June 28 letter addressed to the chairperson of BUSGA, invited the farmers for a meeting slated for Wednesday to discuss the issue of failure by the millers to crush their sugarcane.
“It is stated that members of your association are stranded with huge stocks of sugarcane after failure by millers to procure your cane. I was asked by Parliament to investigate this issue further and report back in two weeks’ time, so I invite you in a meeting to deliberate on challenges you are facing in regards to the sugarcane supplies to the miller,’’ the letter reads in apart.
The strike, which kicked off on July 1, is expected to continue until millers increase the price of sugarcane to at least Shs140, 000 per tonne.

On June 3, the Speaker of Parliament, Ms Rebecca Kadaga, through Mr Anthony Mula, the head of the technical team in Busoga Consortium for Development, had a consultative meeting with ministers, Members of Parliament, local government leaders and members of BUSGA in Kampala on the current sugarcane crisis in the country.
The issue of sugarcane export comes at a time when Parliament is yet to revive debate on the Sugar Bill that was re-introduced by government after President Museveni refused to sign it into law in April on grounds that it was not favouring the big manufactures.

In the Bill, government had proposed zoning of 25kms between mills with no more than one mill with outgrowers in that area only supplying sugarcane to it.
Farmers are claiming that the six sugar factories, in Busoga Sub-region including Kakira in Jinja, Mayuge (Mayuge), GM Sugar (Buikwe), Kamuli Sugar and Kaliro Sugar have failed to consume the sugarcane from more than 20,000 farmers.

Report
A recent report indicates that mills have cut back on sugarcane consumption from about 650m metric tonnes per year to 430m metric tonnes. Sugar production has also reportedly reduced from about 600,000 metric tonnes to 410,000 metric tonnes.

Sugar Bill
The Sugar Bill was passed in Parliament last year to provide for the development, regulation and promotion of the sugar industry. President Museveni did not assent to the Bill and returned it to the House.