Millers agree to share sugarcane byproduct proceeds with farmers

Sugarcane millers have agreed to share proceeds from sugar(cane) byproducts with farmers once the Sugar (Amendment) Bill, 2023 is passed by Parliament and signed into law by President Yoweri Museveni.

This resolution was reached at a meeting between millers and farmers chaired by Deputy Speaker Thomas Tayebwa at Parliament on January 28, 2025.

The meeting was meant to settle disagreements between millers and farmers over the provisions in the Sugar Bill.

The meeting resolved that millers upon the sale of byproducts such as molasses, manure, spirits and biogas, will deduct 45 per cent of production costs and then share the remainder (55 per cent) with farmers who supply sugarcane.

Uganda Sugar Manufacturers Association chairperson Jim Kabeho said the 55 per cent is simply the minimum that should be provided in the law and that the percentage can be negotiated.

“We are saying this is the minimum you can pay a farmer at a given time; it can go upwards depending on the market prices and sugarcane being an agricultural product that fluctuates,” Kabeho said.

Greater Mukono Sugarcane Growers Cooperative Society Ltd chairperson Julius Katerevu said farmers had made calculations and that the above figure is welcome saying, ‘with this, the farmers can now survive. Many have not been breaking even due to the costs of production. This has been the humble cry of farmers’.

Sugarcane farmers who were in attendance repeatedly stated how they have been cheated and mistreated in the sugar industry and pleaded that the new law does not lean towards the millers.

“The proposed grace period in which the millers will start implementation of 55 per cent share is too long. Three years is not necessary for the sugar factories which have been operating for decades in Uganda,” Masindi Sugarcane Growers Association treasurer David Byensi said.

The meeting resolved to give millers two years to start implementing the proceeds sharing cognisant that those intending to invest in generating byproducts such as biogas require time to prepare.

“I think the grace period of two years is realistic; any new investor would require at least one year to get verified and approved and for those intending to generate power from sugarcane need another year to get the license. Let us not press the millers so much,” legislator Henry Bagiire (NRM, Bunya County West) said.

Kinyara Sugar Ltd general manager Ravi Ramalingam made a case for the grace period that farmers had rejected, noting that he has been pressing for a license to generate power for two years in vain. His fellow millers said the long process they go through to import machines is also long.

Immature sugarcane question

Similarly, the meeting resolved to impose nine per cent as the minimum recovery rate a miller should make on a tonne of sugarcane.

Both farmers and millers agreed that this rate would reduce the tendency to harvest immature sugarcane since it yields low returns.

“The millers will not accept immature sugarcane anymore. They will say this does not give me the minimum recovery rate. As Parliament, we are going with this percentage which is based on a study done by the World Bank,” Tayebwa said.

The Bill seeks to amend the Sugar Act 2020 to establish the Sugar Council which would comprise three millers and four farmers that will be charged with regulation of the Sugar Industry.

Its operations will be funded by levies charged on millers and farmers will only finance15 per cent of its operations.