Farmers want sugarcane pricing formula derived from cost of production

Jinja, Uganda | THE INDEPENDENT | Sugarcane farmers from different parts of the country want the sugarcane pricing formula to be derived from their costs of production rather than gross sugar prices at the factory level.

They argue that sugar prices are ever fluctuating and deriving a formula on such a commodity without factoring in other products extracted from sugarcane like ethanol, electricity, and sweets, among others.

Through their umbrella, the Uganda Sugarcane Growers Association-USGA, the farmers say that the formula included the recent Sugar Act amendment bill, which was tabled before parliament was based on the gross prices of sugar,  which is easily manipulatable by the millers at the expense of the farmers.

While addressing journalists in Jinja City on Thursday, the farmers say that, since the average cost of growing a tonne of sugarcane is estimated at 240,000 Shillings, a fair formula should be computed based on such parameters rather than underscoring the efforts of individual farmers.

They argue that the current price drop from 250,000 Shillings last year to an average of 165,000 Shillings is draining the farmers within the sugar industry. They also want millers to desist from paying them amounts lesser than their overall investment.

Lazarus Sayansi, a farmer from Buikwe district says that sugarcane within their area costs between 160,000 and 175,000 Shillings, leaving them counting losses.

Sayansi says that this rate of price drops is burying farmers in debt, as they cannot service their loans through remittances from their sugarcane harvests.

Julius Katerevu, the chairperson of Greater Mukono Sugarcane Cooperative Society Limited says that the Sugar Act should be entirely amended with clauses deterring millers from owning sugarcane plantations.

Katerevu argues that, if millers are entirely dependent on farmers as their sole suppliers of raw materials, they will deliberately push for policies geared toward price stability.

He notes that most millers use farmers’ cane as backup supplies to satisfy their deficits, making it hard for farmers to compete for fair prices, during times when they bumper or surplus harvests from their plantations.

Badiru Ssentamu, the chairperson of cane farmers in Kayunga district says that, if millers are struggling to issue fair prices to the farmers, they should introduce milling charges.

Ssentamu argues that, since most millers blame the price drops on the lack of market for their processed sugar, they can introduce options of milling the cane, then returning the by-products to the farmers who in turn sell off the same within their preferable market, with decent prices.

Meanwhile, One of the executive members Aaron Mande says that they have resolved to issue a two-week ultimatum to all millers across the country to moderate the cane price drops.

Mande adds that failed adherence to their call will result in a nationwide strike by all farmers to stop supplying cane to millers across the country.

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