A proposal by government to slap a fine of Shs10m on individuals who establish sugar mills within a 25km radius of another firm has been rejected by sugar manufacturers, who argue that the charge is ‘very low’.
The companies under their umbrella association, the Uganda Sugar Manufacturers Association (USMA), raised the objection while appearing before MPs of the Parliament Committee of Trade, Tourism and Industry.
The team had appeared before Parliament to present their views on the Sugar Bill 2016, which is aimed at regulating activities of the sugar industry that has been bogged by unstable pries for quite some years.
In their argument, the sugar manufacturers argued that the said penalty is small and want parliament to hike the fine to Shs500m, instead of the Shs10m being proposed in the bill.
Jim Mwine Kabeho, the USMA chairman, who also doubles as Director Madhvani Group, fronted the idea while commenting on Section 13 (2) of the Bill that stipulates that no sugar mill should be set up 25km radius within each other.
According to Mwine, the low supply of sugarcane to companies has left the manufacturers grappling with shortages, limiting their exports.
He has cited out the low harvest from an acre that was initially 35tonnes, but this has since dropped to just 20tons.
Mwine also told MPs that putting sugarcane mills next to each other has created fierce competition among the players, who buy sugarcane at 12 months, yet the required maturity period for sugarcane is 18 months. Due to the practice of harvesting immature sugarcane, Mr. Mwine said, farmers are now losing an average of 4 tonnes of sugar per hectare monthly.
He also revealed that although Ugandans are exposed to the risk of consuming sugar processed from immature sugarcane, which is also the of low yield.
Deliberating about the high sugar prices, Mwine noted that Uganda has the highest price of sugar in the whole world, a trend he blamed on the high sugarcane price charged by the farmers which, at the moment, is Shs175 for each sugarcane.
Once adopted by Parliament, no one will be allowed to establish or operate a sugar mill, jaggery mill or a plant to process the by-products of sugar-cane without a valid license granted for that purpose by the Board.
If found acting in contravention of this particular section, the culprit will be fined Shs10m.
The bill also proposes for the immediate closure of the sugar mill that was established and was operating illegally.
The prosecution of a person under this section doesn’t prevent the Board from licensing the person in accordance with this Act.
The Bill also provides for the establishment of a National Sugar Research Institute that will be mandated with breeding of sugarcane varieties suited for various agro-ecological zones of Uganda.
The Institute will also take on the responsibility of conducting research and nutritional requirements of sugarcane in order to provide recommendations on the appropriate fertilizers.