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Finance Ministry needs Shs 2bln to establish Sugar Board

KAMPALA, November 23, 2023 – Due to the lack of required funds, Government has failed to establish a Sugar Board to regulate the sugar industry, according to the Minister of State Finance [Privatisation and Investment], Evelyn Anite.

The Minister said the Sugar Bill was assented to after the approval of the 2023/2024 budget where the Sugar Board that requires Shs 2 billion, was not provided for, and has now decided to operationalise a Sugar Council as an interim measure.

“As you may be aware, the government generally encountered resource constraints as a result of Covid-19 pandemic. Therefore, my Ministry was not able to provide the required funding,” said Anite.

Minister Anite was appearing before the committee chaired by Mbarara City Woman Member of Parliament, Rita Atukwasa.

The Committee is considering a petition by Uganda Sugar Manufacturers Association [USMA] against licensing of new millers.

The Sugar Act, 2020 establishes a Board to regulate the sugar industry and will be charged with licensing of sugarcane millers, among other functions.

Anite said that the financing of Sugar Board activities would necessitate facilitation through a supplementary.

She said that a Sugar Council to be funded by sugar millers will be established to regulate the sector in the interim.

“This new body would have no recourse on government resources for some of its activities as they would be privately funded by sugar millers. Government did not want to borrow and consulted sugar millers who were willing to finance the Sugar Council,” she said.

Members of Parliament however questioned the independence of the proposed council, saying that millers would have room to manipulate the sugarcane out growers.

Apac District Woman Member of Parliament, Betty Engola said, “Millers may exploit sugarcane out growers because we discovered that majority of the millers do not have a good relationship with the out growers.”

Eunice Apio, the Oyam County North said that government would be arming established millers against the new ones.

“When we went to Busoga on oversight visit, we interacted with millers. It appears to be a rift between established millers and the newbies and if the Council is funded by millers, majority of whom are the giants, there will be conflict of interest,” said Eunice.

Nwoya County East MP Geofrey Okello said that government needs to be clear on how the Council will operate.

“The Sugar Board is the central pillar of implementation of the law. Its absence renders the law ineffective,” he said.

USMA petitioned Parliament on July 17, 2023 complaining about the new sugar mills that were licensed by the Ministry of Trade, Industry and Cooperatives and those that had commenced construction of their factories.

The petitioners aver that the above operational mills are fighting for less available sugarcane, leading to crushing of underage cane and this, they said, leads to loss to out-grower farmers, companies and government since immature cane contains less sucrose.

The sugarcane sub-sector in Uganda is currently regulated under the 2010 National Sugar Policy and the Sugar Act, 2020 and according to industry experts, these regulations have hardly mainstreamed the operations of the sub-sector, leaving a broken relationship between powerful millers and powerless farmers.

However, it is unlikely that a Sugar Board will be established by government since it has presented Rationalisation of Government Agencies [Repeals and Amendments] Bill 2023, seeking to merge and abolish some of the agencies, including those in the agriculture sector such Uganda Coffee Development Authority [UCDA], Cotton Development Organisation [CDO], and Dairy Development Authority [DDA].

According to the Minister of Public Service Wilson Mululi Mukasa, government wants the functions of the agencies to be abolished to be reverted to the mother ministries.

In Kenya, Coffee Board of Kenya, Kenya Sugar Board, Tea Board of Kenya, Coconut Development Authority, Cotton Development Authority, Sisal Board of Kenya, Pyrethrum Board of Kenya, Horticultural Crops Development Authority were merged to form Agriculture and Food Authority, although government wants to reinstate Coffee Board.

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