Parliament has passed the Sugar Bill that seeks to regulate the industry but rejected a government proposal to provide operating zones for mills in the country.
In the Bill, government had proposed a zone of 25 kilometers between mills with no more than one mill in that zone and out-growers in that area only supplying sugarcane to the mill. The proposal was aimed at saving big manufacturers from small ones.
The Sugar Bill, 2016 seeks to provide for the development, regulation and promotion of the sugar industry to ensure that there is a sustainable, diversified, harmonized, modern and competitive sugar sector.
However, instead of the zone proposed by government, the Committee on Trade that considered the Bill, proposed to have a nucleus operating area of 2,000 hectares.
The Chairperson of the Committee, Robert Ssebunya (Nansana Municipality), conversely noted that the committee proposed an amendment that a sugar mill or plant has a nucleus estate instead of a zone of 2,000 hectares from a 25 kilometers radius. “This will be able to address the issue of scarcity of sugarcane, create order and will help mills to operate optimally and break even,” he said.
However, legislators noted that the nucleus would raise a number of issues concerning the availability of land. “You cannot easily get 2,000 hectares today; secondly you will be creating a monopoly in that area because this restricts out-growers to selling sugarcane to only that mill,” said Brenda Asinde (Iganga District).
Jovah Kamateeka (Mitooma District) said the country is running a liberalised economy with no restrictions and that cane growers should be able to trade freely. “A nucleus estate should be preferable but not mandatory otherwise we will be offending the Constitution,” Kamateeka said.
Gaster Mugoya (Bukooli North) added that sugar factories like Madhvani, which started in 1920 with over 320 acres, which was not much land, still grew into successful businesses.
Margaret Baba Diri (Koboko district) said that the decision for a sugar miller to acquire land is dependent on that person and what the locals in the area want to avail them.
“We cannot have government dictating the size of the area where a mill will be established because 2,000 hectares is too much and gives the miller a big expanse to have control over,” she said.
The Minister of State for Trade, Michael Werikhe, said there was need for a mill to have a basis for it to be awarded a license to avoid running out of sugarcane in case out-growers fail to supply enough cane.
Members 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.
“I propose that we have more out-grower representatives than millers on the Board. We should also endeavour to have all regions that grow sugarcane in the country represented so that nobody is left out,” said William Nzoghu (Busongora County North).