Victoria Sugar Accused of Sugar Cane Poaching, Sector Players Want President Museveni, Ministry Of Trade to Intervene

Sugar millers from Busoga and Bunyoro sub-regions have asked President Yoweri Kaguta Museveni and the Ministry of Trade, Industries and Cooperatives (MTIC), to intervene and take a penalizing action against Victoria Sugar, a factory located at Ndibulungi in Luwero district for allegedly engaging in sugar cane poaching.

Competition over sugar cane in Busoga and Bunyoro amplifies as the majority of the outstanding millers complain about Victoria Sugar for eating into their out-growers.

Other factories, who are jointly planning to petition the government and requesting revocation of Victoria Sugar License, claim that the sugar industry in Uganda has had its fair share of seasonal challenges and problems, ranging from cane poaching by the accused factory, with the survival of many sugar companies threatened by the practice.Officials told Journalists that the affected millers are determined to Petition the Ministry of Trade, Industries and Cooperatives, and also asking to meet President Museveni to express their disappointment with Victoria Sugar over what they termed as a practice killing the sugar industry in Uganda.

‘’ We are going to Protest the action and ask for review of Victoria Sugar License because the sugar poaching act does not only affect all of us as sugar millers but the whole economy, if all of us close ,it’s the Ugandan government that will lose employment for its people ,taxes and social corporate responsibility which all our factories have done and benefited the country . We are asking the President to take action against Victoria Sugar Investors who are going to kill the sugar industry in the country which they found thriving,’’ said one of the officials.

Sugarcane millers accuse the government of failing to effect existing policies that govern the sugar sector in Uganda as they await the new law.“We are calling upon the millers and farmers to observe discipline when selling the canes to the millers.

To the contracted farmers, they should not sell their cane to millers other than those that have contracted them, doing so they end up incurring losses. What we require is millers’ farmers’ discipline to have law and order in the sector,” said an official.

Cane poaching is a practice where a sugar miller supports farmers in cultivating sugar cane and signs a contract with them, stipulating that they can only sell their cane to that specific miller.

However, another miller may approach these farmers and purchase the cane from them, breaching the contract. This unethical practice has been a significant contributor to the shortage of raw materials and has pushed the sugar industry to the brink.‘’We are not going to allow this and we are requesting Parliament to take action, summon officials from Victoria Sugar and they review all their licenses to authenticate their operations.

Also since sugar business does not only affect us millers but dealers, sellers ,workers and so its benefiting everyone directly and indirectly .Therefore ,we should all raise Voices against Victoria Sugar for what they are doing which may kill the sugar industry in this country and investigate these investors and their motive’’, added a source from the affected millers.

This has come at time when Victoria Sugar has had controversies with the communities around Ndibulungi over environment degradation, a matter which raged on for months until NEMA intervened, coupled with safety challenges of its workers after the recent death of a casual worker at their Mill in Luwero.

ACCUSATIONS OF EXPLOITING FARMERS

Cartels formed by such sugar millers are reportedly exploiting desperate farmers by defrauding them of billions of shillings under the watch of the government.According to a new report by the Economic Policy Research Centre (EPRC), while some have described sugarcane as a poverty crop, the millers seem to be making huge profits at the expense of farmers.

Without any form of regulation, the toiling farmers in sugarcane-growing districts in Busoga, Buganda and Bunyoro are at the mercy of the millers who determine the price of sugarcane and out of frustration turn them into sugarcane poaching business.The study led by Dr. Swaibu Mbowa, a Senior Research Fellow at EPRC, aimed at determining among other issues the challenges faced by out-growers and other actors in the Sugarcane value chain.It found that over 11,000 farmers had abandoned sugarcane cultivation due to a free fall in sugarcane prices.

Of the surveyed districts, 66.3% of the farmers said they abandoned cane and growing due to lack of market, 60% due to low prices initiated by the millers.So according to Dr. Swaibu Mbowa, the millers have disproportionate power over sugarcane price determination. Apart from the pricing concern, Mbowa said there is a fear that the sugarcane industry is being taken away from the out growers.Sugarcane farmers have also complained that the millers under the out-grower system take too long to harvest the cane.

So a significant amount of their land gets locked up in cane that is not being harvested on time that according to the survey has negative implications for wealth creation as per the National Development Plan II on enterprise development. Farmers speak out on cartel losses Robert Atugonza, the Chairperson of Masindi Sugarcane Growers Association Limited (MASIGAL) told reporters that the accused millers have indirectly been taxing farmers whenever they supply cane.

The EPRC survey suggests the need to implement the Sugar Act to provide for public governance between the out-growers and millers and to oversee a fair and transparent process of determining cane prices. It should be noted that the Economic Policy Research Centre in its latest findings warned that if the government does not quickly set up a regulatory body to preside over activities of the sugarcane sub-sector, the governance of out-growers affairs is at risk and grower agreements are being broken.

In a paper discussed yesterday at Makerere University, the research body also cautions policymakers that under such circumstances, the survival of the out-grower schemes is under threat, and makes food insecurity status even worse.

Recently, legislators sitting on the Parliamentary Committee on Trade, Industry and Tourism raised concerns that the Minister for Trade Francis Mwebesa usurped the powers of the Uganda Investment Authority and started issuing licenses to new sugar mills to operate.The Committee also observed that even with the absence of the sugar board, the Minister had no powers to issue operating certificates to the new sugar mills in a discriminative way.