President Yoweri Kaguta Museveni has signed the Sugarcane (Amendment) Bill, 2023 into law, an act that not only restructures governance in Uganda’s sugar sector, but also attempts to reset the fragile, and at times confrontational, relationship between out growers and millers.
By replacing a non-functional regulatory board with a Stakeholder Council, and revising how cane pricing is calculated, the amendment signals a shift in policy from bureaucratic centralism to industry co-management.
But will it deliver the transformation needed to fix chronic inefficiencies, market volatility, and tensions over pricing?
The 2020 Sugar Act created a Sugar Board that was never operationalized. This vacuum in sector governance left pricing disputes, licensing issues, and ongoing frustrations unresolved.
The 2023 amendment replaces this deadline with a Uganda Sugar Industry Stakeholder Council, a deliberately inclusive body featuring equal representation from out-growers and millers, plus non-voting government technocrats.
This council, funded by a levy on millers’ sugar sales, is more than symbolic. It reflects a structural realignment, giving producers a seat at the table while maintaining policy oversight through ministries.
It’s a power-sharing model that aims to create trust in an industry historically marred by accusations of exploitation, unregulated expansion of millers, and inconsistent pricing.
“If you don’t cooperate, the sugar factories will collapse, and even new farmers will have nowhere to sell,” President Museveni warned.
Perhaps the most consequential clause is the revision of the sugarcane pricing formula. Under the new framework, the minimum cane price is anchored to 50% of the value of refined sugar, a move meant to give out-growers a clearer and fairer share of the value chain.
While growers have long demanded pricing tied to market rates, millers have often resisted, citing fluctuating global prices and high operational costs. By prescribing a floor price while allowing for negotiated flexibility, the amendment tries to strike a delicate balance between price certainty for farmers and operational viability for millers.
However, this also raises key questions:
- Who enforces compliance with the new formula?
- What happens when global sugar prices drop below production cost thresholds?
- Will the Council have real power, or be reduced to an advisory body?
The Council’s operations will be financed through a levy on gross sugar sales by millers. While this makes the model self-sustaining and reduces reliance on public funds, it could potentially exacerbate tensions if millers pass the cost onto growers through lower cane prices or delayed payments.
How the levy rate is set and reviewed by the Minister in consultation with the Council will be a litmus test of the new model’s fairness. If millers perceive the levy as punitive or opaque, it may erode their buy-in, undermining the cooperative ethos the law intends to foster.
The amendment envisions a small Secretariat with a legal officer, a trade officer, and a few technical staff. While the lean structure may reduce administrative costs, it could also limit the Council’s enforcement capacity, especially when handling data management, conflict resolution, and price monitoring.
The challenge will be balancing efficiency with capability, particularly in a sector as politically and economically sensitive as sugar.
By embedding equal representation of growers and millers into the new Council, the amendment shifts decision-making away from centralized ministerial control towards a negotiated model of stakeholder governance. This reflects an acknowledgment that top-down regulation alone cannot resolve the industry’s longstanding dysfunctions.
But this approach also depends heavily on goodwill, coordination, and continuous dialogue, qualities that have historically been in short supply, especially during miller expansion disputes or pricing standoffs in regions like Busoga, Bunyoro, and Acholi.
The law also repeals outdated provisions and aligns Uganda’s sugar governance more closely with regional and international norms, a positive step for trade harmonization within the East African Community. However, by giving considerable interpretive room to ministers on levy rates and other specifics, the legislation still leaves windows for political interference.
Whether the Council becomes a robust regulatory force or merely a symbolic roundtable depends on how faithfully its powers and independence are respected going forward.
The Sugarcane (Amendment) Act, of 2023, is a policy correction. It fills a regulatory void, redefines stakeholder relationships, and provides new tools to fix pricing imbalances and misaligned incentives.
But like all structural reforms in Uganda’s agriculture sector, its success hinges on implementation, transparency, and accountability. With the right institutional commitment, it could foster a more equitable and resilient sugar industry. Without it, the new Council risks becoming another toothless body unable to mediate disputes, enforce price fairness, or restore trust.
The sugar industry is vital to Uganda’s rural economy. This amendment is the government’s latest effort to get it right. The real test begins now