The Uganda Sugar Manufacturers Association (USMA) is calling for an amendment to the Sugar Act, 2020. They are requesting that all sugar licenses currently issued by the Ministry of Tourism, Trade, and Industry be put on hold until the formation of the Uganda Stakeholder Sugar Council.
USMA, led by chairperson Jim Kabeho, is concerned that some licenses were illegally issued and did not comply with the 2010 Sugar Policy or the 2020 Sugar Act.
The formation of the Sugar Council would allow for recommendations to be made to the minister before issuing licenses.
Kabeho stated, “We agree that the minister would continue to issue licenses but with recommendations from the council; once the Council is in place, it can put into place some regulations.”
Kabeho, along with other sugar millers, appeared before the Committee on Tourism, Trade, and Industry on Monday, 15 January 2024. They discussed the Sugar (Amendment) Bill, 2023.
He opposed the current law that requires sugar millers to share proceeds from sugarcane by-products with farmers at a rate of 50 percent, calling it impractical and a deterrent to investment.
The association complained that the sugar market in Uganda is already low and uncompetitive in the region compared to Kenya and Tanzania.
They noted that the sugar cane price paid to farmers in Kenya and Tanzania is lower than in Uganda, making sugar production for export in Uganda unlikely for 2024 and beyond.
The sugar millers argued that the 50 percent share of by-products with farmers complicates the market. They suggested removing this requirement from the Bill.
Director Rajbir Rai of Kinyara Sugar Works also expressed concerns about the declining production and rising prices in the sugar industry.
The association suggested that the sugar levy imposed on millers to finance the activities of the Sugar Council should also involve farmers. They also reintroduced the proposal of zoning of millers.
Committee chairperson Hon. Mwine Mpaka and MP Godfrey Were raised questions and concerns about the implementation of the 50 percent profit share from by-products.
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