No Access | 2024-04-12

The Political Economy of Sugarcane Growing in Uganda: Who Gains and Who Loses?

Authors/Editors: Mary Kajumba Muhuruzi

Abstract:

Sugarcane is a key industrial crop in Uganda, with rising local and export demand in the last two decades. This led to the growth of sugar companies from 4 to 33 between 2000 and 2020. However, many new companies are small and lack their own sugarcane estates, leading to competition and “poaching” of sugarcane from other sources. Large companies have responded by expanding their estates, sometimes at the expense of national forests. These challenges have historical roots in the colonial organization of the industry. This policy note examines the political economy issues that affect the sugarcane sub-sector and its role in Uganda’s agro-industrialisation and development goals. Despite the enactment of the National Sugar Policy in 2010 which culminated in the 2020 Sugar Act, the relationship between millers and contract farmers has collapsed, with only a quarter of growers getting credit for inputs from big mills, except in Bunyoro. Both parties ignore the contract terms, but the farmers suffer more. Delayed buying and harvesting of cane makes many farmers poor and forces them to quit. The factors that make farmers leave cane include broken contracts, low prices, land issues, labour shortage, high transport costs, poor yields due to climate change and lack of fertilisers, expensive loans, millers’ monopoly and government’s failure to regulate. We recommend that the Government adopts a mixed approach to develop the sub-sector by supporting both the millers and the farmers through cooperatives. Millers can bring better technologies, scale up production, create jobs and access markets. These are key to the development agenda. But the sugar companies should also meet high standards such as fair wages for workers, state-set prices for farmers and better miller-farmer relations.