UGANDA – The Uganda Sugar Manufacturers Association (USMA) has urged for the amendment of the Sugar Act of 2020, proposing a suspension of all currently issued sugar licenses by the Ministry of Tourism, Trade, and Industry.
The association, led by Chairperson Jim Kabeho, alleges that some licenses were illegally issued, claiming non-compliance with both the 2010 Sugar Policy and the 2020 Sugar Act.
USMA is advocating for the establishment of the Uganda Stakeholder Sugar Council to oversee and make recommendations before the issuance of licenses.
Jim 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 and other sugar millers, including Kakira Sugar Ltd, Kinyara Sugar Works, and Sugar Corporation of Uganda (SCOUL), presented their case before the Committee on Tourism, Trade, and Industry on Monday regarding the Sugar (Amendment) Bill, 2023.
The association opposes the current law’s requirement for sugar millers to share proceeds from sugarcane by-products with farmers at a rate of 50 percent, deeming it impractical and a hindrance to investment.
Kabeho argued, “If we are to keep the sugar industry in Uganda competitive, the 50 percent is already higher than the worldwide industry standard.”
The USMA highlighted the challenges in Uganda’s sugar market, citing low competitiveness in the region due to lower sugar prices in Kenya and Tanzania.
The committee acknowledged the disparity in sugar cane prices paid to farmers in Kenya and Tanzania compared to Uganda. The sugar millers argued that sharing by-products at a rate of 50 percent complicates the market further, urging the removal of such provisions from the Bill.
Rajbir Rai, Director of Kinyara Sugar Works, expressed concern about the declining production in the sugar industry, leading to rising prices. He emphasized the need to reconsider the percentage shared from by-products without any increments.
USMA also raised concerns about the sugar levy imposed on millers, proposing that farmers should also contribute to finance the Sugar Council’s activities.
Additionally, the group reintroduced the idea of zoning millers, suggesting a minimum distance of 25 kilometers between individual millers. Committee members raised questions about the practicality of applying the 50 percent profit share from by-products and emphasized the need for fair considerations.
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