Sugarcane farmers suspend supply to Kinyara over prices

Sugarcane farmers in Masindi District under their umbrella Masindi Sugarcane Out-Growers Association (MASGAL), have decided to suspend the supply of sugarcane to Kinyara Sugar Company Limited until further notice.
Kinyara Sugar Company has been relying on these farmers for its sugarcane supplies to support its production activities.

The farmers’ decision comes in response to Kinyara Sugar Company’s recent unilateral decision to decrease the price for each tonne of supplied sugarcane from Shs181,000 to Shs160,000 with effect from January 25.

During a meeting held at Kabango Church of Uganda at the weekend, the sugarcane farmers, in a unanimous decision, resolved to halt the supply of sugarcane to the company until the price is increased or they sell their produce to other factories in the neighbouring districts.

The farmers argue that the reduction in the price creates financial challenges for them, particularly considering the substantial costs incurred during the sugarcane planting season.

As a counterproposal, they are suggesting that Kinyara Sugar Company revisits the price and instead raise it to Shs200,000 per tonne, which they say would cover their expenses and ensure a sustainable partnership between the farmers and the sugar factory.

The association has 7,600 registered farmers.
Mr Robert Atugonza, the MASGAL chairperson, said their discontent stems from Kinyara Sugar Company’s decision to reduce the price for each tonne of supplied sugarcane without consulting them.

Mr Atugonza said both parties should engage in a collaborative decision-making process rather than the sugar factory unilaterally setting prices, saying sugarcane is cultivated on the farmers’ land, making them the rightful owners of the cane who should have a meaningful say in the pricing.
“We grow sugarcane on our land; it’s owned by the farmers, and, therefore, we disregard that price they have decided to announce on their own,” he said.

He said they are ready to sell their sugarcane to any willing buyer who will agree on a mutually acceptable price.
Masindi District predominantly relies on the Kinyara Sugarcane Factory, which encompasses both a sugar and an industrial sugar factory, and these facilities have been the primary purchasers of sugarcane from local farmers.

However, in the adjacent districts of Kiryandongo and Hoima, there are alternative sugar factories that actively engage in purchasing sugarcane from Masindi and farmers in Masindi.
Mr Aldon Walukamba, the communications manager at Kinyara Sugar Works, reiterated the company’s stance on the interim price reduction, emphasising that the factory would maintain the current price until a new pricing structure is established.

Despite the suspension of sugarcane supply by the farmers under MASGAL, Mr Walukamba acknowledged that some individual farmers have approached the factory management in the last three days requesting permission to supply the company with sugarcane.

Mr Walukamba clarified that given the current circumstances, the factory does not anticipate any shortage in its production because the factory has its sugarcane estate ready for harvesting, and there will be no disruption in operations.

“There is no decrease in supply because some farmers (not disclosed) have opened up, coming to our factory requesting us to go and harvest their cane, and we shall keep operating normally,” he said.
Sugarcane typically take between 14 to 18 months to complete the cultivation cycle before the cane is ready for harvest.