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The Economic Policy Research Centre (EPRC) has submitted a list of recommendations to Parliament's tourism, trade, and industry committee to be considered in the Sugar (Amendment) Bill, 2023 which provides for the Uganda Sugar Industry Stakeholder Council.

EPRC’s proposals include a call to revise the composition and functions of the council, which it says are pivotal to the sustainable development of the sub-sector. 

Dr. Madina M. Guloba (PhD), a senior research fellow at the centre who presented on behalf of EPRC, noted that the title: Uganda Sugar Industry Stakeholder Council is biased. 

According to her, the title refers to an industry with a finished product being sugar, negating sugarcane, and the production processes. This, she said, makes the council an unequal bargaining platform for the two lead players (production outgrowers and industry-millers). 

Guloba recommended that the title be revised to Uganda Sugarcane Stakeholders Council. Where there is industry, be replaced by sub-sector. She argues that a sub-sector captures both the production and industry components of sugarcane. 

On the composition of the council, EPRC observed that the chairpersonship of the council lies in the docket of the trade ministry (MTIC). In this regard, if this is to proceed, she noted it is going to be biased towards industry. 

“In our observation, it is more prudent that the proposed chairpersonship be partisan. Ministry of Agriculture, Animal Industry and Fisheries (MAAIF) and MTIC should not chair this council as they both have vested interests in the stakeholders they represent. This will bias their decision on members of the council under (2) and (3),” she said. 

Four representatives of sugarcane outgrowers, EPRC observed that the criterion for selection is not clear given that the evidence gathered shows different structures and leadership of associations and cooperatives.  

Guloba said: “Some outgrowers belong to miller-managed associations, farmer-managed associations, co-operatives, and those who do not belong to any association. In addition, there are distinct differences in the sugarcane outgrower structures and leadership within and across the different cane-growing regions (Eastern, Central, North, and Western).” 

She recommended revisiting the number of representatives considering the geographical, structural, and leadership differences of out-growers associations or cooperatives. 

Other observations and recommendations 

EPRC observed that the current Act assumes that the sugarcane sub-sector has only two key stakeholders (out-growers, millers), yet the process has revealed that the subsector has a diversity of stakeholders involved in the value chain (growing, processing, adding value, using various inputs and services to produce juice or sugar and byproducts for different uses) 

As such, the centre recommends that there is need to consider the provision of additional slots to cater to other key stakeholders (e.g. research, standards). 

It proposes that the chairperson of the council shall be a person of knowledge with experience in the sugarcane industry. This, Guloba said, should neither be a miller nor an out-grower. 

However, if the millers and out-growers are to be appointed as chairpersons, this, she warned, should be on a rotational basis. 

Concerns of cane farmers 

Richard Gafabusa (Bwamba County, NRM), however, raised concern over what he termed as the Government’s reluctance to support sugarcane farmers. 

“Why are we leaving sugarcane farmers and millers to finance the Council and yet we are generating so much from the industry? The reason so many sugarcane farmers are complaining is because millers are exploiting them,” he said. 

He also questioned the sustainability of the council, saying the body risks failing to finance activities during periods when the industry is making losses. 

“How will the Government supervise the council since you do not have control? I am anticipating more chaos because of less government influence,” he added. 

The legislators also questioned the legality of licences that were issued after the Act came into force, in the absence of the Sugar Board. 

“The power to license in the Act currently lies with the board, not the minister and that is why we are wondering how the minister is coming to license now,” said the committee’s deputy chairperson Catherine Lamwaka (District Woman Representative Omoro, NRM). 

Petition 

While appearing before the committee on November 21, 2023, Sugarcane outgrowers in Busoga and Buganda regions petitioned the Parliament stating that the trade ministry licensed new millers who have not adhered to the Sugar Policy which puts a restriction of a 25km radius. 

They also decried what they called exploitation by sugar factories, saying the factories are paying them low prices for their sugarcane, which is not enough to cover their costs of production. 

They also said the sugarcane millers no longer provide them with adequate support services, such as access to credit and equipment and yet they are making the biggest profits from the business.

Several sugarcane out-grower associations said as a result of the exploitation, many sugarcane out-growers are struggling to make ends meet.  

David Christopher from the Busoga Sugarcane Outgrowers Association said they hardly make profits as every factory dictates its own price.  

“Farmers have even been forced to abandon their farms. For a peasant or a small-scale farmer, it is now very hard to invest in even one acre of sugarcane as the costs are so high. The farmers need aid to be able to plant more acreage for sugarcane. We are being paid about shillings 200 per kilogramme of cane, this is the crop that earns the least,” he said. 

According to the farmers, the sugarcane industry is not regulated properly as the current players are operating in alliance against farmers. 

They said that bureaucratic tendency by the millers caused fluctuations in the sugarcane prices which heavily affected the farmers, adding that they are being highly exploited while the factories enjoy a lion’s share of the business. 

Government’s position 

Deputy Attorney General Jackson Kafuuzi recently responded to the petition by Uganda Sugar Manufacturers Association to bar licensing of new millers. 

Kafuuzi, who was appearing before the Committee on Tourism, Trade, and Industry on November 28, 2023, said the trade ministry is better placed to respond to the legality of the new licences.

He was also responding to the issues in the Sugar Act, 2020. The Act establishes a Sugar Board but it will not be implemented following rationalising of government agencies.

The Sugar Board was expected to regulate the sugar industry through licensing of millers. When asked by the legislators on the way forward, Kafuuzi said: “It is only the line ministry that takes charge and that is why I get the concern that perhaps we should be here together with the Ministry of Trade. We would have answered these questions better together.” 

Kafuuzi, however, said the law will now be amended to introduce a Sugar Council, adding that licensing will be undertaken by the trade minister. 

He said that the move is intended to address concerns about the independence of the Council. “Clause 7 of the Bill states that one of the mandates of the Council is to review applications for sugar licensing, establishment, expansion of sugar production and provide recommendations with justifications to the Minister to grant licenses or reject,” he said.

Deputy Solicitor General Pius Biribonwoha said that the Council will consist of sugarcane farmers and millers from all catchment regions. 

“The activities of the Council, including extension services, marketing development, research, and development will be financed with funds generated from the sugar levy on millers. Government will not appropriate funds to finance activities of the council,” he said.