LoP advocates for fair sugarcane pricing

“The economy is liberalised and the forces of demand and supply are at play but it does not stop government from regulating the pricing to ensure that people are not ripped off and that farmers get a fair income from their toil,” Ssenyonyi said.

Ssenyonyi presented a statement to Parliament on Thursday following an oversight visit he undertook with other lawmakers to Busoga region which grows sugarcane feeding factories like Kakira Sugar.

He added that the sugarcane pricing which is calculated based on one by-product [sugar] is unfair and should be reviewed to include at least five by-products including bagasse, molasses and ethanol among others.

Ssenyonyi also condemned the decision by millers to charge farmers 18 per cent Value Added Tax [VAT] on the sugarcane saying that according to the law, the tax is only charged on finished products.

“Millers should stop deducting VAT from money paid out to farmers from the sugar cane supplied because value has not been added yet to sugarcane, they are raw materials,” he said.

During the oversight visit, Ssenyonyi added that it was discovered that millers delay to pay farmers for the sugarcane supplied with farmers reporting that they wait up to six months before they are paid.
“The Ministry of Trade should pick interest of delayed payment of farmers and set a minimum period for payment of farmers for the supplied sugarcane,” he said.

The LoP also recommended that government aims to support sugar cane farmers’ cooperatives for them to negotiate better terms with millers and enable access to bulk purchases of inputs.

To empower farmers, Ssenyonyi urged government through Uganda Development Corporation [UDC] to fast-track the purchase of land that was identified in Luuka and Buyende Districts to pave way for construction of farmer owned mills.

“In 2021, government pledged to construct two sugar factories however, to date, no construction has taken place. Rather, there has been a back and forth by UDC despite the release of more than Shs8 billion for the purchase of land,” Ssenyonyi said.

He further called on the Uganda National Bureau of Standards [UNBS] to ensure accurate calibration and periodic maintenance of weigh bridges to enable accurate tonnage of sugarcane.

He added: “Sugarcane farming faces significant challenges that undermine its sustainability and profitability. Addressing these challenges requires multi stakeholder approach and implementing the recommendations will ensure a more resilient and profitable sugar cane industry.”

Sugarcane in Uganda is mainly grown in the subregions of Busoga, Bunyoro, Buganda, and Acholi where private millers have been established to purchase the cane from the farmers, organised in associations, and cooperatives.

https://thecooperator.news/govt-to-protect-farmers-as-sugarcane-prices-fall/