The sugar industry in Uganda has for many years thrived on being orderly. The main players – Kakira, Kinyara and Lugazi, are situated at a good distance from each other (Kakira to Lugazi is 40km, Kakira to Kinyara approximately 500km). They do not overlap in farming activities or production. However, with the entry of several smaller factories into the economy, the issue of zoning has become a source of contention.
What is zoning?
Zoning happens in so many ways and at so many different levels, from your home to the global stage. A city can be divided into zones for industry, agriculture, residential, and leisure among others. Designating these specific areas helps the city authorities to plan infrastructure and resources, as well as providing protection to the ordinary citizen. Even games have rules, and they exist to protect the players. The same goes for the zoning rules required in the sugar industry.
The nucleus estate model
Zoning in the sugar industry is based on the Nucleus Estate Model. This means a sugar producer grows sugarcane on a plantation surrounding its processing plant, which is referred to as the Nucleus, and it must be reasonably large in order to provide some guarantee of input for the plant. According to Kamlesh Madhvani, joint Managing Director (JMD) of KSL, setting a factory anywhere without a nucleus farm and buying from any farmer due to policy guidelines causes periods of excessive supplies of sugar, which pushes the price down and shortages in some periods, again pushing the price.
He said it is not good for the country and not good for planning and often leads to inefficient use of resources, adding that Uganda needs some strategic guidelines, which should be spearheaded by the government where sugarcane millers are compelled to have a certain amount of sugarcane within their nucleus estate of about 50% and then source the rest from out growers. The area outside the nucleus is not owned by the factory, but the communities therein produce cane for the factory. These are known as Out-grower farmers. In Uganda, the recommended zoning is that sugar factories be planned within a radius of at least 50 kilometres from one another.
This means that a new sugar mill should be situated inside at least 25 km of its own nucleus estate and Out-grower holdings. A sugar mill needs at least 500 hectares of nucleus estate to break even in sugar manufacturing. Further more, only 30% of the area in this model is meant to be used for sugarcane growing. The rest of the land should be reserved for food production, wetlands, forested areas and settlement
The Big Bad Sugar Industry
A plethora of social, environmental and economic problems have been associated with sugarcane growing in Busoga region, the blame of which is often put on the doorstep of Kakira by the court of public opinion. These issues are all real, with varying levels of destructiveness. The most glaring problem for the region is food shortages, and the assumption is that people are using all of their land to grow sugarcane instead.
- It is argued that Kakira is trying to lock other millers out so that it can maintain a harmful monopoly as the only miller to whom outgrowers can sell in the region.
- Small holder farmers are leasing land to big sugarcane farmers and not earning much out of the transaction
- Sugarcane farmers have been left suspended in a limbo between the Agriculture ministry and the Trade ministry. There are no agricultural support services offered to them from the government, even though the industry covers thousands of Ugandan farmers.
- Accidents caused by cane transporting trucks.
- In a bid to clear land to grow sugarcane, there has been wide spread environmental degradation and deforestation
- There is a host of social ills associated with sugarcane growing, chief among which are Alcoholism, Child labour and Family abandonment.
Putting blame where it belongs
Jumping blindly on the bandwagon: This is a major Ugandan economic disease. Everyone wants to do the next thing they imagine is making money for someone else. They do not want to do the requisite research, put in the work, stay the course, invest the money/time and reap the benefits in peace. We all grew vanilla, neem tree, aloe vera… and now sugarcane is the in thing. “There is money in sugarcane” people say, but it has to be invested in responsibly.
Non-binding cane contracts: When a responsible sugar miller signs a cane supply contract with a farmer, this contract will involve details such as how much land they can grow cane on. Farmers are only meant to grow cane on 30% of their land.
However, unscrupulous people will sign the 30% with Kakira, and then partition away the remaining 70% of their land in contracts to other mills and jaggeries.
This results directly into no food, poor land use, deforestation and child labour. Without support structures from ministries, how can a sugar miller possibly enforce these cane contracts with thousands of small holder farmers at a go?
Mushrooming rogue millers: It may seem like a good idea to pepper an established cane growing area with more mille lack of legislation and enforcement The existing sugar legislation is the one page Sugar Control Act of 1938, which deals with such weighty issues as ‘exporting of sugar by parcel post’! This is grossly inadequate in the current environment. An updated Sugar policy has since been drafted, and has waited for parliamentary approval for the past five years. In the meantime, sugar mills are being licensed without even following the requirements set by the old policy. Individual government officials agree with the principal of the policy, but have failed to stand up and push it to law.
Politicization of sugar cane: Take the example of the Kenya-Uganda sugar debate sparked by unfortunate comments from the leader of the opposition in Kenya: The remarks exposed the widespread lack of knowledge about what is really going in the sugar industry. This information blackout has always served those who wish to politicize things. Some politicians will promise that rogue sugar mills will bring ‘jobs’ and ‘more money’ to farmers, but they are silent on the real issues. How does an automated mill with barely an acre of land around itself compete in job creation with an established estate that hires in excess of 9,000 drivers, agronomists, mechanics, cane cutters, upkeep workers, factory technicians, accountants, security guards, teachers, doctors, school support staff and civil engineers, to mention but a few?
It takes a village: Culturally we are meant to be our brother’s keeper, but these days the village is letting itself down. Each cane farmer is acting for himself, not for the good of the community. It is ‘my money’. The time honored systems which led a village to raise a child, which made us responsible keepers of our brothers, have been eroded. The village will therefore stand by while children dodge school to work on their family plantations. They will stand by as a man abuses alcohol or abandons his family to go and enjoy his sugar wealth with a new wife. The checks and balances created by community disapproval have been slowly eroded away.
This content is sponsored by Kakira Sugar Limited
