The sugar industry in Busoga Sub-region is grappling with a crisis as two prominent factories, Shakti Sugar and Bon Sugar Mill Ltd (C.N Sugar Ltd), located in Kamuli and Bugiri districts, face imminent closure. The Uganda Sugar Manufacturers Association (USMA) is calling for the revocation of their licenses, alleging a violation of the Sugar Policy and contributing to an unstable supply of sugarcane in the region.
Since the implementation of the Sugar Act, the Ministry of Trade has granted licenses to seven millers, including Shakti Sugar Limited, Bon Sugar Limited, Modern Agri Sugar Ltd, Kikajo Sugar Ltd, Kelon Sugar Ltd, and Tyrol Investments Ltd. However, the USMA contends that the licensing of multiple factories within one sub-region has disrupted the supply chain, leading to adverse consequences for the industry.
President Museveni, in his Christmas message on December 22, criticized the decision to license factories without a sufficient supply of sugarcane. The President’s remarks highlight the ongoing debate surrounding the Sugar Act, which was signed into law on April 28, 2020. Some Members of Parliament, particularly from Busoga Sub-region, had previously rejected the notion of zoning, which would restrict the establishment of sugar mills within a 25-km radius.
Shakti Sugar finds itself in proximity to Kamuli Sugar and the nucleus farms of Kakira Sugar and Lugazi Sugar, both already licensed and operational. Bon Sugar Mill Ltd (C.N. Sugar Ltd) is situated 19kms from Bugiri Sugar Ltd, alongside other licensed millers with significant investments in the region.
The USMA raised concerns about the adverse effects of these licenses on the sugar industry’s growth, prompting the Ministry of Trade to issue notices preventing new millers from undertaking any development until a sugar board is established.
Jim Kabeho, the chairperson of USMA, emphasizes the need for a council to regulate and manage the licensing of new sugar factories in order to address the instability in cane supply. Millers currently operate below optimal crushing capacities due to cane shortages attributed to poaching.
The shortage of cane in Busoga Sub-region has also affected farmers financially. The cost of a ton of cane has risen to Shs240,000 due to scarcity, while millers have offered as low as Shs96,000 in 2021. The Chairperson of the Uganda Sugarcane Growers Association (USGA), Mr. Isa Budhugo, contends that factories between 20 and 30 percent completion cannot be relocated, emphasizing the absence of zoning provisions in the sugar law.
Mr. Budhugo attributes the cane shortage to millers halting agricultural aid to farmers. He advocates for more sugar factories in Busoga, citing the vast available land, with 2.4 million acres but only 300,000 acres occupied by sugarcane, according to the 2014 population and housing census.
David Mombwe, General Secretary of the Busoga Out growers Association (BSGA), expressed concern over the inclusion of zoning in new legislation, citing past surplus cane that was sold to Kenya and Atiak in Northern Uganda between 2017 and 2021. The ongoing debate surrounding the sugar industry’s future in Busoga raises critical questions about sustainable growth and regulatory frameworks.
