Sugar Factories In Bitter Fight Over Cane 'Poaching'

2392 Views Kampala, Uganda

In short
Poaching has traditionally meant the illegal capture of wild animals, but it is now a new word in the sugar industry as big sugar millers battle emerging ones over sugar cane.

Poaching has traditionally meant the illegal capture of wild animals, but it is now a new word in the sugar industry as big sugar millers battle emerging ones over sugar cane.

Competition over sugar cane had in the past been limited to Busoga areas as Kakira Sugar Works complained about new millers eating into its 8,500 out-growers. But other big factories such as Kinyara Sugar in Masindi and Sugar Corporation of Uganda Limited (SCOUL) in Lugazi face a similar challenge.

The practice in which emerging millers target established factories, buying sugar cane from out-growers has come to be known as "sugar cane poaching". 

Kakira Sugar Works, which has been cultivating its own sugar cane alongside over 8,500 out-growers and had ventured in electricity generation using ethanol, says its operations have been greatly affected.

Angela Kintu  Rwabose, the Kakira Sugar Works spokesperson says competitors have targeted out-growers.

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Kakira has been in the sugar business since the 1930s. It has of recent faced new competitors like Mayuge Sugar Industries Ltd., Sugar & Allied Industries Ltd., Kamuli Sugar Ltd., Seven Star and Sezibwa. Majority of the new players don't have own nucleus farms so they depend on out-growers contracted by Kakira.

Statistics compiled by a verification mission after the visit of Kenyan President Uhuru Kenyatta in 2015 indicate that Mayuge had 2,100 out-growers, while Kaliro and Allied Industries had 5000 out-growers. GM Industries according to the report claims it has 3,500 out-growers.

SCOUL recently got new competitors like GM Sugar located in Njeru and Sezibwa Sugar Mills located less than 15 kilometres from the Lugazi factory. 

Angella Kintu says some farmers have abused the contracting system by selling the cane to competitors before it matures.

The competition has been extended to Masindi with sugar cane being hauled all the way to sugar mills in Buganda and Busoga. The millers exploiting Kakira, Lugazi and Kinyara factories' out-grower system. They have allegedly opened up a price war  on top of the price war by paying at slightly higher price for sugar cane hauled from Masindi.

It is common for travellers to the Northern Uganda to encounter long haulage trucks loaded with sugar cane from Masindi.

Uganda Radio Network could not reach Kinyara Sugar Limited's Corporate Affairs Manager, Kirunda Magoola for comment about the threat to their out-growers.  But Masindi Resident district Commissioner, Godfrey Nyakuhuma has in the past called for an end to sugar cane poaching.

Nyakuhuma said the practice could be a recipe for disaster for Masindi if Kinyara Sugar operations were affected.

Dr. Okumu Ibrahim Mike, an Economics lecturer at Makerere University, says with the ongoing war over sugar cane, the big players and emerging ones are engaged in a price war over sugar cane as the canes get even scarce due to the prolonged drought.

Dr. Okumu, suggests that government should regulate the sector by sticking to the sugar factory zoning policy which requires that a new factory cannot be established within a radius of 25 kilometres from an already existing one.

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Dr. Okumu says there is need for government intervention or else Uganda will witness clashes similar to what has been witnessed in Kenya with onetime big players like Mumias and Nzoia factories virtually on their knees over sugar cane wars.