Museveni rejects Sugar Bill, warns of turmoil in industry

KAMPALA. President Museveni has rejected the Sugar Bill and warned Parliament against putting the industry at risk over what he calls “small parasite new comers”.
On March 1, Mr Museveni wrote to the Speaker of Parliament Ms Rebecca Kadaga, rejecting the Bill, which was passed by Parliament recently.
“It is a big mistake to destroy our sugar industry in favour of small parasite new comers and undermine the big historical actors; Kakira, Lugazi and Kinyara,” Mr Museveni stated in his letter.

The Bill passed by Parliament lifted the zoning policy to create an open market for sugarcane growers to sell their cane to willing buyers anywhere in the country.
The zoning policy barred sugarcane growing or sale beyond 25km radius of a sugar mill. The MPs approved the popular view contained in the report of the House committee on Trade, providing for the lifting of the zoning.

“The proposal for the 25km zoning radius of mills would unfairly strengthen existing large scale millers over small scale millers yet there is in existence a standard policy on liberalised economies to promote competitiveness and efficiency,” the committee report stated.
The report also urged the government “to protect small scale industries from unfair competition”.
However, Mr Museveni flatly rejected the Parliament view and said small scale farmers have no reason to try out sugarcane lest they create a mess in the industry.

Argument
“This Act legalises anarchy in the sugar industry for no good reason. Small farmers of less than six acres should not be allowed into growing sugar cane. It should be the medium and large-scale farmers that should partner with the factories,” his letter reads.
The President further warned Parliament to be careful about small sugar operators who pay a high price for sugarcane, arguing that they may be depending on smuggling and money laundering and using sugar as a cover-up.
“They will destroy our sugar industry and not replace it yet the sugar industry is not only important for drinking but for beverages, the pharmaceutical industry etc,” he said.
According to the President, the sugar industry composed of ‘historical players’ already suffering setbacks and should, therefore, not be subjected to further shocks.

Kakira’s sugar production, Mr Museveni observed, has dropped from 180,000 tonnes in 2014 to 125,000 tonnes in 2017.
He further argued that the installed capacity of the sugar factory is 600,000 tonnes but it is only producing 365,000 tonnes because of failure to implement the zoning policy.
The President explained that with 10 acres, a farmer can earn Shs30.6m per harvest in 18 months. With 100 acres, he added, the farmer can earn Shs306m and Shs3.06b from 1000 acres per harvest.
Mr Museveni wants MPs to reverse their decision and scrap the provision of ‘no-zoning’ and also prohibit the licensing of small millers dealing in sugar production.

While addressing the NRM parliamentary caucus at the recent retreat in Kyankwanzi, Mr Museveni criticised the MPs for siding with small millers.
The Minister of Trade, according to Parliament Rules of Procedure, has only two weeks to table before the House a copy of the returned Bill after the President’s letter has been read to the national assembly.

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