Scoul rejects demands by outgrowers, transporters

Trucks loaded  with sugarcane in the parking yard of  Scoul  factory in Lugazi, Buikwe District, on January 11, 2022. PHOTO/DENIS SSEBWAMI. 

What you need to know:

  • On January 11, the outgrowers under their umbrella body, Lugazi Sugarcane Transporters Cooperative Society (LSTCS), announced that they had suspended the supply of sugarcane to Scoul, citing low prices of sugarcane and delay to offload trucks at the factory. They also complained about the high interest rate charged on farm inputs advanced to farmers.

A standoff between Sugar Corporation of Uganda Ltd (Scoul) and sugarcane outgrowers and transporters in the districts of Buikwe, Mukono and Kayunga has taken another twist with management of the company rejecting some proposals made by the ougrowers.
On January 11, the outgrowers under their umbrella body, Lugazi Sugarcane Transporters Cooperative Society (LSTCS), announced that they had suspended the supply of sugarcane to Scoul, citing low prices of sugarcane and delay to offload trucks at the factory. They also complained about the high interest rate charged on farm inputs advanced to farmers.

Mr Julius Katerevu, the chairperson of LSTCS, said they register a loss of Shs85,000 per tonne of sugarcane supplied to Scoul, considering the high production costs and fuel prices.
He said whenever they transport the sugarcane to the factory, priority is usually given to loaded trucks owned by the factory, which keeps them waiting for several days.
But in a January 12 statement, the management of Scoul indicated that it is not possible to provide interest free farm inputs and cash facilitation to farmers.

“There is certainly no way the company can borrow money at an interest and then give it out for free as requested. The bank’s borrowing interest rate determines the rate at which the company extends any facilitation to the farmers, which in most cases is lower than the bank interest rate,” a statement signed by Mr Patrick Dhikusooka, the company senior manager in charge of administration, reads in part.
On the delay to offload trucks and low price of sugarcane, Mr Dhikusooka said sometimes it is beyond the company’s control, for example, when there is a breakdown of  machinery.

“The slab price is in line with what is being offered by other sugar factories. Your proposal for increasing the transportation slab by Shs10,000 due to increase in fuel prices, high maintenance costs and cost of  living is not possible at the moment,” he said.
“This is because the economy has been affected by the lockdowns, which in turn greatly affected the company’s sales,” he added.

 Mr Dhikusooka said the company will continue to add only a maximum of Shs100 per litre of fuel being administrative costs and supply diesel to transporters at Shs3,900.
“It is not practical for the company to subsidise fuel and supply it at Shs3,500  per litre as suggested in your letter since fuel prices are determined by market forces of supply and demand. The company doesn’t determine the prices of fuel and as such it cannot supply fuel to transporters at a price lower than the price they purchased ,” he said.
Scoul also rejected another proposal to allow unregistered farmers to supply sugarcane to the company.

“This is of course unacceptable since the company deals with only registered outgrowers. Those farmers who may wish to deal with company must get themselves registered,”  he said.
On the other hand, however, Mr Dhikusooka said the company had agreed to provide tax certificates to transporters, but advised them to first acquire tax identification numbers. He said they are also in the process of digitalising the sugarcane trucks arrival system to reduce complaints about delays.
“We have already placed an order for the equipment and we urge you [outgrowers] to be patient and bear with us during this period,” he said.
Mr Katerevu yesterday said: “Of course their [Scoul] response to our demands is not convincing and our executive is yet to sit and agree on the way forward.” 

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