Jinja- Government will relocate GM Sugar Uganda Limited and Mayuge Sugar Industries Limited (MSIL) to other areas in a bid to minimise sugar cane growing which has caused famine, poverty and environment degradation in Busoga sub-region.
This revelation was made by the State minister for Karamoja Affairs, who is also the Bugabula North County MP, Mr Moses Kizige.
He was speaking at the ground breaking ceremony of a Sh10b residential house for Busoga Diocese Bishop, Rev Paul Samson Naimanhye at Bugembe Town Council in Jinja last week where he represented Speaker of Parliament Rebecca Kadaga.
Mr Kizige said many farmers in Busoga are increasingly abandoning food production for sugarcane growing by renting out their small land for sugarcane growing for six months in exchange for little money which they consume in only few months.
He said government will also be implementing the new sugar policy w approved by Cabinet with the aim of curbing wetland encroachment by sugarcane growers, deforestation and use of all the available land for sugarcane growing.
Mr Kizige said no factory will be allowed to be in the radius of within 25 kilometres because it was a mistake that was done by some leaders.
“Some of the factories will close because of this new policy and the remaining which will be relocated will be given money to relocate to another area as well as a tax holiday of five years without paying corporate tax until they stabilise,” he said.
He said in new policy, anyone intending to start up a new sugar factory must have his/ her own sugar cane plantation that can provide him 75 per cent of the raw material.
The minister said no one will be allowed to buy sugarcane from the sugarcane out grower scheme established by another factory.
He said any proprietor of a sugar factory who will also buy sugarcane from an out grower without five acres and above his licence will be revoked.
“A person without five acres will not be around to grow sugarcane, one must have a minimum of five acres to establish a home, food security, income generating activities and the excess will be used for sugarcane growing and this will be implemented by revoking licenses of those Sugar mills owners who will be buying raw materials from them,” he said.
Busoga region currently have five sugar factories including Kakira Sugar Works in Jinja which is Uganda’s biggest producer with a production capacity of 180,000 metric tonnes per year, Mayuge sugar factory, GM sugar factory in Njeru Town Council Buikwe District, Kamuli Sugar Limited and Kaliro Sugar Limited
The group managing director of the Madhvani Group of Companies, the proprietors of Kakira Sugar Works, Mayur Madhvani said due to many sugar factories in Busoga, the high demand for sugarcane has increased and mills have resorted to buy young sugarcane in order to remain operating hence affecting the quality and the price of sugar.
He noted that government which is deliberately licensing these sugar factories to operate in the same area which contravenes the National Sugar Policy that prohibits opening of new sugar mills within less than 25km of existing ones.
Mr Madhvani said Kakira, used to produce 180,000 tonnes annually but is currently operating below capacity because between 140,000 and 150,000 tonnes due to the many factories in the sub region.