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The Sugar Council is the proposed regulatory body for the industry following the government policy on rationalisation that saw nullification of the Sugar Board established under the Sugar Act, 2020.
Kiwanuka Kiryowa said government is in support of a self-regulating council for the sugar industry which he said has dwindled despite its potential to boost the economy.
“What government is saying is that, let the sugar industry regulate itself as much as possible with supervision from government. The industry stakeholders say they can self-finance themselves through a levy which they are willing to pay,” said Kiwanuka Kiryowa.
He added that, “the sugar industry was a boom, but has now declined. All the big players in the sugar industry are getting land to plant sugarcane, farmers are losing the market, if this industry is not regulated time will tell. We get tax from this industry and we want to protect it”.
The Attorney General made these recommendations while responding to queries raised by members on the Committee on Tourism, Trade, and Industry regarding the Sugar (Amendment) Bill, 2003 on Thursday, 25 January 2024.
He was in the company of the State Minister for Industry, Hon. David Bahati and the Deputy Solicitor General, Pius Biribonwoha.
The committee is concerned with how a private entity will manage revenue from the sugar levy proposed within the bill.
“We understand that revenue from this levy cannot be remitted to the Consolidated Fund, yet we are creating a law to its effect. How will the Auditor General account for this levy?” asked Hon. Mwine Mpaka, the Committee Chairperson.
MPs wanted answers to the fears of sugarcane farmers who say that the milling companies, by their financial muscle, are likely to influence the council to regulate the sector in their favour.
“The farmers are concerned that the provision requiring only millers to pay the sugar levy will give millers an advantage to dictate the operations of the council against farmers’ interests,” said Hon. Richard Gafabusa (NRM, Bwamba County).
The sugar levy is the only source of income to finance the proposed council, according to the bill, and will be determined by the council in consultation with the Trade Ministry.
The committee also sought government response on the formula in the bill that all traders and farmers will be subjected to, to determine the minimum price of sugarcane.
MPs said sugarcane farmers want the formula to include other sugar products. However, the bill considers only the price of sugar as its basis for calculating the price of a ton of sugarcane.
The Attorney General, citing Article 153 of the Constitution that provides for the creation of a public fund, said the sugar levy will be governed by the already existing laws that oversee public funds and that the functions of the fund will be those spelt out in the enacted law.
“The use of public funds is governed by a plethora of laws; the council will be mandated to use the funds as per the functions contained in the law. If it goes out of its mandate, if faces the law,” Kiwanuka Kiryowa said.
Bahati on the other hand said that the formula used to determine the sugarcane price is currently based on sugar and not other products due to lack of data.
“Sugar is the only variable for which we have data. For example, we do not know how many tonnes of sugarcane are required to make what quantity of ethanol,” Bahati said adding that, “the sugar pricing policy is one of the instruments we are using to develop the industry ‘.
Distributed by APO Group on behalf of Parliament of the Republic of Uganda.
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