President Yoweri Museveni has rejected the sugar bill 2019 and sent it back to Parliament urging that the legislation in its current form has already created anarchy in Uganda’s sugar industry.
The President’s position was communicated by Deputy Speaker, Jacob Oulanyah who read Mr. Museveni’s letter during Wednesday’s plenary sitting, in which letter the President described the small sugar growers as parasites who have destabilised the sector.
Mr. Museveni wrote: “It would also be a big mistake to destroy our sugar industry in the interest of small parasitic newcomers and undermine the big historical actors (such as) Kakira, Lugazi, (and) Kinyara. This Act legalizes anarchy in the sugar industry for no good reason.”
The President said that all sugar farmers of less than six acres shouldn’t be allowed in growing sugarcane and the activity should be left to the medium and large scale farmers that should partner with the large factories.
The Bill passed by Parliament lifted the zoning policy to create an open market for sugarcane growers to sell their cane to willing buyers anywhere in the country.
The zoning policy barred sugarcane growing or sale beyond 25km radius of a sugar mill. The MPs approved the popular view contained in the report of the House committee on Trade, providing for the lifting of the zoning.
“The proposal for the 25km zoning radius of mills would unfairly strengthen existing large scale millers over small scale millers yet there is in existence a standard policy on liberalised economies to promote competitiveness and efficiency,” the committee report stated.
The report also urged the government “to protect small scale industries from unfair competition”.
However, Mr Museveni flatly rejected the Parliament view and said small scale farmers have no reason to try out sugarcane lest they create a mess in the industry.
“This Act legalises anarchy in the sugar industry for no good reason. Small farmers of less than six acres should not be allowed into growing sugar cane. It should be the medium and large-scale farmers that should partner with the factories,” his letter reads.
The President defended his decision to reject the Act on grounds that failing to implement the zoning policy is already destroying the sugar industry, adding that Kakira’s sugar production dropped from 180,000 tonnes in 2014 to 125,000 tonnes in 2017.
And whereas the installed capacity of the sugar factories is 600,000 tonnes, the big shots are only producing 365,000 tonnes because of failing to implement the zoning policy and the three biggest account for 400,000 tonnes of this.
It should be recalled that Parliament passed the Sugar Bill 2018 into law in which MPs unanimously agreed to reject the zoning proposal arguing the move would create a monopoly and instead proposed to have a nucleus operating area of 2,000 hectares and proposed an amendment that a sugar mill or plant has a nucleus estate instead of a zone of 2,000 hectares from a 25km radius.
