Parliament has passed the Sugar (Amendment) Bill 2023, setting a new minimum price for sugarcane prices countrywide.
The Bill, which seeks to establish an industry stakeholder council to oversee the sugar sector with funding sourced from a levy imposed on millers, was tabled for the first reading by industry state minister David Bahati about two years ago.
Under this arrangement, the Government’s role will be limited to regulatory oversight, exercised through its representatives on the council namely: the permanent secretary and other technical officers serving at the council’s secretariat.
According to the Bill, cane prices shall be derived from a new formula; which is PC = PS×R×D. In this formula, PC is the price of sugarcane per tonne, PS is the average price of sugar per tonne, R is the rendement (tonnes of sugar made per every 100 tonnes of sugarcane) fixed at 8.5%, but can be negotiated higher depending on the circumstances.
On the other hand, D is the share of the proceeds, set at a minimum of 55%.
According to the Sugar Act 2020, the sugarcane price was determined using a formula; CxRxD, where C is equal to weight (tonnes) of sugarcane, R is rendement, and D is the percentage to be negotiated by concerned parties as decided by the sugar board, and the minimum shall be 50%.
However, this formula caused conflict between farmers and millers, after farmers complained of unfair pricing during bumper harvests.
Two years ago, price instability led to a sharp drop in sugarcane prices, with a tonne falling to as low as sh98,000, down from over sh200,000.
Under the amended Section 24 of the Sugar Act, any miller who pays a grower or outgrower a sugarcane price that violates the provisions of this Act may have their licence revoked by the minister.
The passing of the Bill yesterday followed an amendment to Schedule 3 of the Sugar Act by Masindi District Woman Member of Parliament (MP) Dr Florence Akiiki Asiimwe.
She argued that the new arrangement would resolve the longstanding standoff between outgrowers and millers, which had nearly crippled the industry.
Asiimwe was backed by Bahati, who said this is something the Government has been pursuing all along.
“I agree with the amendments and this is one of the things that we have been looking for to harmonise the formula. I want to confirm to members because there are some fears from farmers about those farmers who have already negotiated and signed agreements of the rendement of above 8%,” Bahati said.
He added: “We want to confirm that those agreements will not be affected after all the 8.5% is lower than the 9% Kinyara Sugar Company has already signed.”
However, speaking on the floor of Parliament, Dr Timothy Batuwa Lusala (Jinja South Division West) unsuccessfully opposed the provision allowing negotiations on rendement.
He wanted a standardised rate that would reward farmers whose cane yields more sugar. In response, Deputy Speaker Thomas Tayebwa clarified that such concerns would be addressed by the council through its regulations.
Veto powers
Also, MPs from sugarcane-growing areas led by Moses Walyomu (Kagoma County) successfully opposed a clause in the Bill that sought to grant veto powers to the trade minister over decisions made by the proposed sugar industry stakeholder council.
In the committee report, which was tabled by trade committee chairperson Sylvia Nayebare (Gomba Woman MP).
In the committee report tabled by Nayebare, MPs had proposed for the insertion of clause 3(a) which stated: “The council shall, within the time prescribed by the minister through regulations, consider the application and make a recommendation to the minister to grant or not to grant a licence.”
On the other hand, sub-clause (d) also provided that the minister shall not make a decision on the application for a licence where the council refuses to recommend a grant until after the expiry of the prescribed time in the sub-section.
This, however, would cause more intrigue according to Maurice Kibalya (Bugabula South) and Haji Idi Isabirye (Bunya South).
“You remember when we were in the consultative meeting, you called and these were the scenarios we tried to avoid. Hon Bahati was in the meeting and we agreed that the powers of the minister would be to grant after the council has agreed. We are putting a scenario where the minister is also having space to say; if the council says yes, I can say no,” Kibalya retorted.
On his part, Walyomu said it defeats logic for a minister to be scrambling for power when he is already represented on the council by three members.
Attorney General Kiwanuka Kiryowa, however, explained that under Clause 9 of the Bill stipulates that any person aggrieved by the decision of the minister is free to apply to court for review of the decision.
“The only way the minister gets involved is when a person is aggrieved. If the council sends a recommendation to a minister to grant or not to grant and the person who applied doesn’t complain, the minister can’t get involved. Where the applicant is aggrieved, he goes to the minister and tells the minister how the council has mistreated them,” Kiryowa elaborated.
Kiryowa was backed by Joab Businge (Masindi Municipality), who said this will cushion applicants against instances of conflict of interest.
The stand-off was later resolved by the trade committee chairperson [Ayebare], who conceded that aggrieved parties can appeal to the council not court as previously stated.
Reactions from farmers
Reactions from farmers Speaking to New Vision, David Christopher Mawangwe, the chairperson of the sugarcane outgrowers supplying Kakira, praised Parliament for passing the Bill, saying it was long overdue.
“This is a new dawn. I want to congratulate all farmers because we have been waiting for this for the last four years. We have always wanted the issues of sugarcane organised. Although the Government has continuously brought in investors, it has not regulated the prices. Now that they have done so, we want to thank all our representatives from the sugarcane growing areas, especially Haji Iddi Isabirye,” Mawangwe said.
He added: “You have represented us very well. Growing sugarcane has really been a challenge, yet it is the leading cash crop of Busoga. Now that the law has been passed, we hope the prices will not keep falling.”
