By Muteguya Denis
The sugarcane fields of Uganda’s Busoga sub-region reflect agricultural vitality, being the country’s largest sugarcane-producing area and supplying essential raw materials to Uganda’s sugar mills, which drive the industry’s success.
However, the outgrowers who cultivate these fields face significant economic challenges that threaten their livelihoods. Despite their essential role, these farmers often receive prices that fall below their production costs, leaving them vulnerable to debt and exploitation by millers who dominate the pricing landscape.
While Uganda’s free-market economy complicates government intervention, strategic support from the Ministry of Agriculture, Animal Industry, and Fisheries (MAAIF) could offer a lifeline to Busoga’s outgrowers. The Sugar Act of 2020 was enacted to establish a Sugar Board of Uganda, which is mandated to oversee fair pricing, regulate industry standards, and promote equitable growth in the sugarcane sector.
However, the board remains non-existent, leaving a critical gap that allows millers to control pricing and exploit farmers. Successful global models from Brazil, India, and Thailand suggest that a more structured and transparent approach could protect farmers and drive equitable growth.
MAAIF has a unique opportunity to advocate for the swift establishment of the Sugar Board as mandated by the Sugar Act. The board could regulate industry standards, set fair prices, and monitor miller practices, ensuring that out-growers are not exploited.
Collaborating with the Ministry of Trade, MAAIF could help establish fair pricing mechanisms that enable farmers to cover production costs while earning a sustainable income. This oversight would create a level playing field, preventing millers from taking advantage of outgrowers’ lack of bargaining power.
Furthermore, MAAIF could introduce a minimum price guarantee for sugarcane, similar to India’s Fair and Remunerative Price (FRP) system. Under the provisions of the Sugar Act, such a guarantee could act as a safety net, ensuring that growers receive a base price that covers their expenses regardless of market price fluctuations.
By supporting the establishment of a minimum price, MAAIF would empower farmers to negotiate with millers from a position of strength, securing fairer compensation for their crops. Additionally, MAAIF could support cooperatives like the Busoga Sugarcane Growers Cooperative Union by providing training in governance, financial management, and negotiation skills.
Well-managed cooperatives could amplify farmers’ voices, improving collective bargaining power and allowing them to secure better prices. MAAIF could also encourage bulk purchasing schemes for fertilizers, seeds, and pesticides, reducing input costs for farmers and increasing their profit margins.
Transportation costs pose a significant barrier for many Busoga farmers, who face logistical challenges in accessing sugar mills. MAAIF, in partnership with the Ministry of Works and Transport, could drive infrastructure development to create better road networks, reducing costs and expanding farmers’ access to new markets. Public-Private Partnerships (PPPs) could fund these projects, allowing both the public and private sectors to share responsibility and resources for infrastructure improvements.
Additionally, MAAIF could facilitate farmers’ entry into alternative markets beyond traditional sugar production, such as bioethanol and renewable energy. This approach has been successful in Brazil, where bioethanol production has created a profitable new market for sugarcane farmers, reducing their dependence on millers.
By investing in these alternative markets, Uganda could create additional revenue streams for sugarcane growers, strengthening the industry’s resilience and expanding economic opportunities for farmers.
One of the most significant barriers for sugarcane farmers in Busoga is access to affordable credit. MAAIF, working with financial institutions, could develop low-interest loan programs specifically tailored to meet the needs of smallholder farmers. These loans could help farmers invest in modern farming techniques, high-quality seeds, and improved irrigation systems, enhancing productivity and profitability.
The Ministry could also implement crop insurance schemes to protect farmers from unforeseen losses due to climate-related issues or market volatility, providing a safety net for their investments. Additionally, MAAIF could create subsidy programs for essential farming inputs, helping reduce production costs and enabling farmers to maintain sustainable operations. Subsidized inputs would allow farmers to increase their output while managing expenses, improving their overall profitability in an industry prone to pricing challenges.
Investing in research and development (R&D) is another area where MAAIF could support the sugarcane industry. The ministry could collaborate with institutions like the National Agricultural Research Organization (NARO) to develop disease-resistant, high-yield sugarcane varieties tailored to Uganda’s climate.
By promoting the use of advanced farming techniques, MAAIF would help improve productivity, reduce losses, and increase sugar content, making it more valuable to millers and other buyers. Research into efficient farming methods, pest control, and soil health could also benefit farmers, providing them with the tools to increase productivity and reduce costs. MAAIF could organize regular training sessions and workshops to educate farmers on these innovations, empowering them with the knowledge to improve their yields and contribute to a more competitive and profitable industry.
In today’s digital world, access to information can be transformative for farmers. MAAIF could support the development of digital platforms similar to India’s eNAM (National Agriculture Market), connecting farmers with buyers and enabling them to access real-time market information. Such a platform would allow sugarcane farmers to compare prices from different buyers, ensuring they receive fair compensation. This technology-driven solution would reduce farmers’ dependence on millers and give them greater control over their products, promoting a fairer marketplace.
Digital tools could also improve communication between farmers, cooperatives, and stakeholders, fostering a more transparent and inclusive industry. By enhancing connectivity within the industry, MAAIF would help farmers make informed decisions and build a stronger network to protect their interests.
While Uganda’s free-market economy limits the extent of government intervention, MAAIF’s active involvement could still create a more equitable and sustainable industry for sugarcane outgrowers in Busoga. From establishing the Sugar Board and implementing minimum price guarantees to supporting cooperatives and expanding infrastructure, the ministry has several avenues to positively impact farmers’ lives. MAAIF’s engagement could serve as a catalyst for broader industry reform, ensuring that farmers receive fair compensation and can invest confidently in their futures.
By learning from successful models in Brazil, India, and Thailand, Uganda can foster a sugarcane industry that uplifts its growers, strengthens rural economies, and contributes to the country’s broader agricultural success.
As MAAIF and other stakeholders work together, they have the potential to transform Busoga’s sugarcane sector from a vulnerable industry into a symbol of resilience and prosperity. Through collaborative and targeted efforts, Uganda’s government can protect and empower its farmers, building an industry where the fruits of labour are shared fairly, and every stakeholder thrives.
Yours truly, Denis Muteguya, a socio-economic analyst
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