KAMPALA, UGANDA – Heavy rains in recent weeks have dampened the excitement of many farmers intending to sell their sugarcane.
Sugarcane farmer in Busoga region (central eastern Uganda) are stranded with sugarcane after the factory where they were to sell the crops failed kick off sugar production
Farmers from the districts of Namutumba , Kaliro and parts of Luuka all in Busoga region told the East African Business Week that their cane was supposed to be harvested after 18 to 22 months ago.
However up to now no harvesting has been don. This has hurt their income projections.
They cannot sell their crop to another sugar producing company, because this will breach contracts between farmers and Sugar and Allied Industries, a subsidiary of the Alam Group of Companies
“The sugar company has been promising us that sugar production will kick off in January then they extended to March. From March they promised us that in April sugar production will kick off, but now we are in May. No single production has started and our crops are getting old. This may affect us the farmers,” one farmer who talked to EABW on condition of anonymity said.
He added that due to the failure by the company to buy the farmers’ sugarcane, this has made some farmers fail to pay school fees for their children since they had the hope of harvesting money from sugarcane
Sugar and Allied Industries (SAIL) General Manager, Syed Akhtel Abbas said the delay was due to the rainy season which he said it has affected the engineering exercises at the sugar milling plant in Kalir.
“Farmers have reason to complain, but nothing we can do because the rain has disorganized the engineering process fabricating machines cannot be carried out when it’s raining. But we are about to finish the whole process and very soon at the end of May sugar production will kick off at our plant in Kaliro”he said.
Another farmer suggested that if Sugar and Allied Industries should allow them the right to harvest their cane and sell the crops to others companies saying this will help them to overcome the financial crisis in which their experiencing now
“As per now, no single farmer can harvest the crop without the authority of Sugar and Allied Industries. The majority of the farmers were supported by the company to plant cane. But if the company is not buying our crop, let them allow us to sell to their competitor and pay back their loans,” he proposed
On whether the farmers can sell their crop to other companies like the Mayuge Sugar Works also in Busoga region, Abbas advised them to be cautious.
He said the farmers had signed memorandum of understanding with SAIL.
He said if they want to sell to other companies, they should first pay back the agriculture loans the company offered to the farmers before (SAIL) can grant them a harvesting license.
The General Manager also advised the sugarcane farmers who are in need of financial support to approach the company.
He said they can recommend them to get soft loans from banking institutions as they wait for SAIL to harvest their sugarcan.
Currently there about 5,000 sugarcane outgrowers who have partnered with SAIL.
The deal is to grow sugarcane and supply it to the factory for sugar production. In this arrangement the company subsidises the farmers by offering them sugar stems for planting, tractors for cultivating the lands and also technical advice on how to grow sugarcane.
According to Abbas, farmers pay back to the company in installments after they have harvested their crop and sold to the company.
“ We charge them 40 % out of the revenue on the first harvest then also 30% and lastly 30% on the third harvest after the three harvest the farmers now have the right to sale their crops anywhere on the fourth harves,” he said.
The $50 million sugar factory will start with an initial production capacity of 2,000 tonnes of crushed sugarcane per day.
Similar in capacity with the Lugazi Sugar Works factory, but smaller than the 6,500 tonnes of crashed sugar cane facility at Kakira Sugar Works
It’s also proposed that when production starts, the company will also be generating power amounting to 12 megawatts of electricity.
“As soon as sugar production commences in January next year, we shall use the bagasse to produce electricity of not less than 12 megawatts,” Abbas said.
Once SAIL goes into full production sugar prices are likely to steadily fall, but presently Uganda has a sugar deficit.
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