Summary:

• The sugar industry in Busoga Sub-region faces a crisis as Shakti Sugar and Bon Sugar Mill Ltd are at risk of closure, prompting calls for license revocation due to alleged policy violations and supply chain instability, with President Museveni criticizing the licensing process and a debate emerging over the need for zoning in the Sugar Act.

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The sugar industry in the Busoga Sub-region is currently facing a crisis as two prominent factories, Shakti Sugar and Bon Sugar Mill Ltd (C.N Sugar Ltd), located in Kamuli and Bugiri districts, are on the brink of closure. The Uganda Sugar Manufacturers Association (USMA) is urging the revocation of their licenses, claiming a violation of the Sugar Policy and attributing it to the unstable supply of sugarcane in the region.

Since the enactment of the Sugar Act, the Ministry of Trade has issued licenses to seven millers, including Shakti Sugar Limited, Bon Sugar Limited, Modern Agri Sugar Ltd, Kikajo Sugar Ltd, Kelon Sugar Ltd, and Tyrol Investments Ltd. However, the USMA argues that licensing multiple factories within one sub-region has disrupted the supply chain, negatively impacting the industry.

President Museveni, in his Christmas message on December 22, criticized the decision to license factories without ensuring an adequate supply of sugarcane. The President’s comments underscore the ongoing debate surrounding the Sugar Act, signed into law on April 28, 2020. Some Members of Parliament, especially from Busoga Sub-region, had previously opposed zoning, which would restrict the establishment of sugar mills within a 25-km radius.

Shakti Sugar is located near Kamuli Sugar and the nucleus farms of Kakira Sugar and Lugazi Sugar, both already licensed and operational. Bon Sugar Mill Ltd (C.N. Sugar Ltd) is situated 19kms from Bugiri Sugar Ltd, alongside other licensed millers with significant investments in the region.

Concerned about the detrimental effects of these licenses on the sugar industry’s growth, the USMA prompted the Ministry of Trade to issue notices preventing new millers from undertaking any development until a sugar board is established.

Jim Kabeho, the chairperson of USMA, underscores the necessity of a council to regulate and manage the licensing of new sugar factories to address the instability in cane supply. Millers are currently operating below optimal crushing capacities due to cane shortages attributed to poaching.

The shortage of cane in Busoga Sub-region has also financially impacted farmers. The cost of a ton of cane has risen to Shs240,000 due to scarcity, while millers offered as low as Shs96,000 in 2021. Mr. Isa Budhugo, the Chairperson of the Uganda Sugarcane Growers Association (USGA), argues that factories between 20 and 30 percent completion cannot be relocated, emphasizing the absence of zoning provisions in the sugar law.

Mr. Budhugo attributes the cane shortage to millers discontinuing agricultural aid to farmers. He advocates for more sugar factories in Busoga, citing the vast available land, with 2.4 million acres but only 300,000 acres occupied by sugarcane, according to the 2014 population and housing census.

David Mombwe, General Secretary of the Busoga Outgrowers Association (BSGA), expresses concern over the inclusion of zoning in new legislation, citing past surplus cane that was sold to Kenya and Atiak in Northern Uganda between 2017 and 2021. The ongoing debate surrounding the sugar industry’s future in Busoga raises critical questions about sustainable growth and regulatory frameworks.