Govt wants Shs. 2 Billion to set-up sugar board to regulate sugar industry

Government has failed to set up the Sugar Board to regulate the sugar industry due to unavailability of the required funds, the Minister of State Finance (Privatization and Investment), Evelyn Anite, has said.

The Minister said the Sugar Bill was assented to after the approval of the 2023/2024 budget where the Sugar Board that requires Shs2 billion, was not provided for, and has not 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 Hon. Rita Atukwasa (Ind., Mbarara City) on Wednesday 22 November 2023.

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,” Anite said.

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

Hon. Betty Engola (NRM, Apac district) 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.”

Hon. Apio Eunice (UPC, 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.

Hon. Geofrey Okello (DP, Nwoya East) 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 17 July 2023 complaining about the new sugar mills that were licensed by the Ministry of Trade and those that had commenced construction of their factories.

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