Fight over proposed sugar bill

Big sugar producers insist government must incorporate zoning clause                                     

Kampala, Uganda | PATRICIA AKANKWATSA | The fight over the proposed Sugar Bill 2016 seems to be far from over as President Yoweri Museveni promises to return it back to Parliament barely four months since it was passed in November last year.

Museveni, who was speaking during the recently concluded National Resistance Movement retreat at the National Leadership Institute in Kyankwanzi, is reported to have said he will not sign the Sugar Bill in its current state into law.

“The way you (Parliamentarians) are behaving, you are antagonizing our old sugar people and I don’t know the relationship you have with small sugar people. Some of you have got a suspicious relationship with the small sugar people and now you are sabotaging my plan,” he said.

“Because now when I tell Madhivani he says you are sabotaging me, I am about to close. They aren’t lying (and) even if they are lying; you need to know where your interest lies.”

“Some of you leaders get mixed up like the way you handled the sugar bill which I am going to send back to you…The way you passed the sugar bill, this industry will collapse,” he added.

Museveni said he had plans to encourage big sugar producers to venture into production of refined sugar to be used in the manufacturing of medicines.

Though the manufacturers have welcomed Museveni’s views, sugar growers are opposed to the new decision.

“This is the best bill in the country compared to other countries,” Michael Mugabira, the coordinator for Uganda Sugarcane Growers Association told The Independent in an interview.

“It disputes monopoly of these big manufacturers. If they are not ready for competition, then let them drop out of the business.”

Mugabira said he would like to see President Museveni sign the Bill into law.

On the other hand, manufacturers, want the Bill to be revised especially with the issue of zoning so as to restore sanity in the industry.

“MPs need to be aware of what has transpired in neighboring countries where zoning was halted, the sugar industry collapsed,” Kenneth Barungi, the spokesperson Kakira Sugar Limited said in reference to the Kenya’s sugar industry in which majority of the sugar factories are struggling to remain afloat as a result of cane poaching that has resulted to under-capacity.

Barungi said some of the countries in the region are now importing vast quantities of sugar overseas and depleting their foreign exchange reserves.

Earlier, the government had proposed a radius of 25km between sugar mills and out-growers in that area supplying cane to only one mill.

However, the legislators scraped off zoning of sugarcane growers by sugarcane millers, giving cane growers more power to sell their products to any sugar mill. A proper pricing methodology was also set to protect out-growers.

Parliament also voted to double the number of out-growers on the Uganda Sugar Board from two to four since they are the majority in the sugar cane growing industry.

The passing of the bill fueled fights between the out-growers and the millers as well as the giant sugar manufacturers and new players in the industry.

The big sugar companies argued that they funded the out-growers in terms of provision of raw materials and fertilizers in anticipation of purchasing the cane once it is mature.

But out-growers said the situation led to domination of sugar territories by the big companies, leaving small and new companies struggling to get supply and ultimately leading to cane poaching.

Dating back to the 1920s, Uganda’s sugar industry currently boasts of more than 13 sugar manufacturing firms dotted across the country, making it one of the most attractive investment destinations.

The sugar production has increased from merely 240,000 tons in 2008 to 386,000 tons in 2017 amidst local demand of approximately 350,000 tons.

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