In a decisive move to curb the exploitation of sugarcane out-growers and maintain regional stability, the Government of Uganda has intervened to establish a minimum sugarcane price of Shs125,000 per ton for farmers in Busoga sub-region.
The intervention follows a heated outcry from local farmers, many of whom reported earnings as low as Shs90,000 per ton, a price point that stakeholders warn is insufficient to cover production costs and threatens the socio-economic fabric of one of Uganda’s primary industrial hubs.
The landmark agreement was reached during a high-level meeting held on Friday, chaired by Hon. Francis Mwebesa, the Minister of Trade, Industry, and Cooperatives. The meeting brought together the ‘Big Six’ millers from the Busoga region, including:
Sugar Corporation of Uganda Limited (SCOUL), Kakira Sugar, GM Sugar, Kamuli Sugar, Mayuge Sugar and Bugiri Sugar.
Also in attendance were Hon. Frederick Ngobi Gume (State Minister for Cooperatives), Hon. Daudi Migereko (Chairperson of the National Biofuels Committee), and technical officials from the Ministry.
Addressing Arbitrary Pricing and Illegal Deductions
Minister Mwebesa issued a stern warning to millers against what he termed as “harmful practices that undermine the Sugar Amendment Act 2025”.
Farmers had specifically flagged GM Sugar, Kaliro Sugar, Bugiri Sugar, and Kamuli Sugar for offering rates significantly lower than the statutory pricing formula.
Beyond the base price, however, the Minister addressed the contentious 5% trash deduction.
He noted that despite a clear pronouncement from the Sugar Council abolishing this fee, several millers were reportedly still deducting this amount from farmers’ payments, a practice the government has now ordered to cease.
“We have been receiving concerns regarding arbitrarily low sugarcane prices, which we consider valid. These prices directly impact farmer livelihoods, mill supply stability, and the social and political stability in sugarcane growing areas,” stated Hon. Mwebesa.
The Two-Month Stabilisation Window
The Minister highlighted that the agreed price of Shs125,000 per ton is a temporary stabilisation measure set for two months. This window, he noted, serves two critical purposes:
Socio-Political Stability: Ensuring peace and economic security in Busoga during the current election period.
Regulatory Review: Providing the Sugar Industry Stakeholders Council time to conduct a comprehensive review of the industry’s cost structures and finalise long-term pricing mechanisms.
Industry Compliance and the Road Ahead
The millers in attendance unanimously agreed to the two-month minimum price. The Chairperson of the Sugar Council emphasised that compliance with the new law is not optional, noting that a harmonious partnership between the government, millers, and out-growers is the only path toward long-term sector stability.
As the two-month window begins, the Ministry of Trade has committed to active monitoring to ensure that no farmer is paid below the set floor and that illegal deductions are fully eliminated.