Mixed Reactions as Sugar Bill Receives First Reading in Parliament

The Sugar Amendment Bill (2023) has ignited mixed reactions among stakeholders in Uganda’s sugar industry, following its recent introduction in Parliament. Presented by the Minister of State for Trade, Industry, and Cooperatives, Mr David Bahati, the Bill aims to establish the Uganda Sugar Industry Stakeholder Council, replacing the defunct Sugar Board created by the Sugar Act (2020).

Key provisions of the bill include the composition of the council, with representatives from sugarcane growers, millers, and government officials. However, the proposed funding mechanism, wherein millers contribute through a sugar levy, has raised concerns, particularly among sugarcane growers.

Mr Isa Budhugo, Chairperson of the Uganda Sugarcane Growers’ Association (USGA), voiced reservations, emphasizing that a council funded by millers may lack independence. He urged the government to fully fund the regulatory body to ensure impartiality in decision-making. Budhugo also criticized the council’s composition, particularly the appointment of the chairperson by the minister.

The bill further seeks to amend the formula for determining sugarcane prices sold to millers, aligning it with international norms. Sugarcane growers, represented by Budhugo, expressed skepticism about adopting international formulas, calling for extensive research and impact assessment. Some farmers argue in favor of market-driven pricing based on supply and demand.

Additionally, concerns were raised about the proposed zoning system, with millers advocating for a 25-kilometer radius between mills. The Uganda Sugar Manufacturers’ Association, representing millers, had previously petitioned Parliament against what they deemed an unfair licensing trend for new sugar factories. However, farmers argue against zoning, asserting that it limits their options and transportation flexibility.