By John Odyek
Parliament has stayed the discussion of the Sugar (Amendment) Bill, 2023 following disagreements on the mechanisms, and operations of the Sugar Industry Stakeholder Council to replace the Sugar Board as the body that is responsible for the implementation of the law.
The new law also set out to create a new formula to determine the price of sugar cane but MPs said the new formula appeared to cut down the price of sugar cane.
While some MPs agreed on setting up the board others queried its operations. Paul Akamba (Busiki County) said there is a need to form a sugar board. Akamba noted that the delay in setting up the board was because the government was rationalising its institutions.
David Bahati, the state minister for trade on Wednesday, February 7, tabled the Bill for second reading and debate in the House.
Bahati said that the creation of a stakeholder’s council was intended to put the management of the sugar cane industry in the hands of the private sector. He said that the Bill sought to correct the formula for determining the price of sugar cane because the existing one is erroneous.
Bahati said that the formula put in the law to determine the price of sugar cane was not correct and needed correction. He said there was no money to put the planned board in place. He said the council having the power to licence is better than the government running the sector.
He noted that the council would give recommendations to the minister of trade on which companies to licence and explain to companies if their applications are rejected.
Dr Timothy Batuwa (Jinja South Division West, FDC) explained that at the moment one tonne of sugar cane is priced at sh195,000. But with the new formula, the price might fall to sh146,000. Batuwa asked that the formula be piloted before it is rolled out.
Iddi Isabirye (Bunya County, NRM) said farmers need protection just as well as the sugar mills. Martin Mugabi (Buzaaya County, NRM) said that the Bill proposes to give powers to the minister, taking it away from the council.
John Teira (Bugabula County North, NRM) said that from the 1920s the millers were determining prices of sugar cane as the disadvantage of farmers.
Teira said that in 2019 when changes took place in the industry prices moved upwards but sunk later. Abdu Katuntu (Bugweri County, Independent) said the Bill should take care of the interest of the farmers and the millers in a balanced manner.
“The relationship between a farmer and miller is symbiotic, prices can go up on a temporary basis but good regulation is key to managing production and the market,” Katuntu said.
The object of the Bill is to establish the Sugar Industry Stakeholder Council to replace the Sugar Board as the body that is responsible for the implementation of the law.
The Bill establishes a secretariat composed of public officers and officers appointed by the Council to assist the Council in administering the law. The Bill also provides for an updated formula to determine the price of sugar cane.
The policy behind the Bill is to provide for the better development, regulation and promotion of the sugar industry; and to provide for the establishment of the Uganda Sugar Industry Stakeholder Council.
The Sugar Industry is regulated under the Sugar Act, 2020, Act 13 of 2020 which established the Uganda Sugar Board as the body responsible for implementing the Act. However, because of the Government policy on rationalisation which restricts the establishment of statutory bodies, the Uganda Sugar Board has never been established by the Government.
To address this challenge, the Bill seeks to amend the Sugar Act, 2020 to establish the Sugar Industry Stakeholder Council which would comprise representatives of stakeholders in the sugar industry and be funded by a sugar levy charged on millers.
The Government shall only provide regulatory oversight over the activities of the Council through a few representatives on the Council and technical officers at the secretariat of the Council.
The Sugar Act, 2020 provides a formula to determine the price of sugarcane sold to millers. The Bill seeks to amend the formula in accordance with international norms. Florence Akiiki (Woman Representative, Masindi, NRM) said that Masindi sugar cane farmers wanted to set up their mill because of the exploitation in prices. But after getting a licence it was cancelled leaving the farmers at a loss.
Kenneth Kiiza (Bujenje County, Independent) said the price of sugar has dropped by 9% but the price of raw sugar cane has dropped by over 20%. He said the farmer and miller were like the left and right hand needing each other.
Faith Loru Nakut (Woman Representative, Napak, NRM) raised concern about the lack of implementation of the act. Nakut said that the mess in the industry was causing people to face high prices of sugar on the market.
Thomas Tayebwa the deputy speaker of Parliament who chaired the House asked Kiwanuka Kiryowa the deputy attorney general to guide the House in the setting up of the council and whether the government can allow it be funded by a levy from the industry.
