MPs approve zoning in sugar bill

BY: Eyalama In Business On

The Parliamentary committee on trade has included zoning in the Sugar Bill 2016, which was recently returned by President Museveni.

The Sugar Bill is meant to ensure that there is a sustainable, diversified, harmonized, modern and competitive sugar sector to meet domestic, regional and International sugar requirements.

President Museveni refused to assent to the bill saying that the lack of zoning is killing the sugar industry in Uganda. He argued that the small new companies undermine the big historical players like Kakira, Lugazi and Kinyara Sugar companies.

Museveni in his letter dated 1st March 2019 to Parliament read by the Deputy Speaker Jacob Oulanyah directed Parliament to ensure that zoning is added in the proposed law.

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Museveni says small farmers with less than six acres should not be allowed into growing sugar cane, but medium and large scale farmers should partner with the factories.

Now the parliamentary committee which has been scrutinizing the bill for the past two weeks has approved the president’s recommendation of zoning.

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In a report authored by trade committee chairperson Kasule Robert Sebunya, the committee recommends that a 25 Kilometre radius be stipulated in the sugar bill as minimum distance between millers and that the factories that fall within the radius be relocated at a cost met by the government that had earlier issued the license.

The report recommends that all new licenses issued after 2004 should all be recalled and the ministry prior to licensing should ensure all applicants must fulfil the conditions of minimum nuclear estate of 2,000 hectares, 25km zoning requirement and protecting out grower’s food crop land.

“The committee recommends that government makes a decision on cost of relocation of existing mills since it’s an acceptable principle that he who issues a license can revoke it at any one time and report within 6 months.” Kasule’s report reads.

The committee also recommended that government takes deliberate steps to support out-grower farmers in forming cooperatives to protect them from bad commercial practices of unscrupulous sugar mills.

The Deputy of Speaker of Parliament Jacob Oulanyah has however deferred the debate on the bill to Tuesday next week.

The minority report was read by Masaka Woman MP Babirye Kabanda amid praises from MPs who are opposed to zoning.

She also says relocation of small millers at a fee of 50 billion shillings each is not feasible and it is expensive.

There has not been a comprehensive regulation of the sugar industry.

Initially, sugar companies funded an out-grower system where a company gives an out-grower seeds and fertilizers, in return being assured of purchasing raw products in form of the canes.

This led to the domination of sugar territories by the big companies, while the small and new companies struggled to get supply, leading to a number of challenges that include sugar cane poaching, and price differences between the players.



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