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On Tuesday, January 28 millers and farmers met at Parliament, with the Deputy Speaker, Thomas Tayebwa, chairing the session. The purpose of the meeting was to resolve disputes between the two parties regarding the Sugar (Amendment) Bill, 2023 provisions.
The meeting concluded that, once the Bill is passed into law, millers will share proceeds from the sale of sugar and its by-products, such as molasses, manure, spirits, and biogas, with farmers. Specifically, millers will deduct 45 per cent of production costs and share the remaining 55 per cent with farmers who supply sugarcane.
Jim Kabeho, Chairperson of the Uganda Sugar Manufacturers Association, explained that the 55 per cent share is the minimum required by law, with the possibility of negotiating higher amounts depending on market conditions.
“This is the minimum payment to farmers at any given time. The percentage can increase based on market prices and fluctuations in sugarcane production,” Kabeho stated.
Julius Katerevu, Chairman of Greater Mukono Sugarcane Growers Cooperative Society Ltd, welcomed the resolution, highlighting that farmers have struggled with production costs for years.
“With this new provision, farmers will survive. Many have not been breaking even due to the high costs of production. This has been the humble cry of farmers,” Katerevu said.
Sugarcane farmers at the meeting expressed frustration over the mistreatment they have faced in the sugar industry, urging that the new law should not favour millers.
David Byensi, Treasurer of the Masindi Sugarcane Growers Association, voiced concerns about the proposed grace period for millers, saying, “The three-year grace period is too long. Sugar factories have been operating in Uganda for decades, and this delay is unnecessary.”
In response, the meeting resolved to grant millers a two-year period to begin implementing the 55 per cent share. This grace period acknowledges that new investments in bi-product generation, such as biogas, require adequate preparation time.
Henry Bagiire (NRM, Bunya County West) argued, “The two-year grace period is realistic. Any new investor needs at least a year for verification and approval, and those generating power from sugarcane will need another year to obtain a license. Let’s not put too much pressure on the millers.”
Ravi Ramalingam, General Manager of Kinyara Sugar Ltd, defended the grace period that farmers had opposed, citing his two-year struggle to obtain a license for power generation. Other millers noted that importing necessary machinery is also a lengthy process.
Additionally, the meeting established a minimum recovery rate of nine per cent per ton of sugarcane. Both farmers and millers agreed that this rate would reduce the tendency to harvest immature sugarcane, which yields low returns.
“Millers will no longer accept immature sugarcane. They will reject it if it doesn’t meet the minimum recovery rate. Parliament has agreed on this percentage, which is based on a World Bank study,” Tayebwa confirmed.
The Sugar (Amendment) Bill, 2023 aims to amend the Sugar Act 2020 and establish the Sugar Council, which will consist of three millers and four farmers tasked with regulating the Sugar Industry. The Council's operations will be funded through levies on millers, with farmers contributing just 15 per cent of its funding.