Kampala — From a distance, the sugar fields in Budongo, Masindi district, look as beautiful, but a close encounter tells a different story.

One of these shambas (14 acres) belongs to Patrick Kyaligonza of Kimaanya village and when he starts speaking, it becomes clear that the business is not as juicy as the canes look.

"This sugarcane is 29 to 30 months old but the company has not yet come to harvest them," Kyaligonza laments. "They are supposed to be harvested between 18 and 20 months."

A source at Kinyara Sugar says in the last few months, the company has been growing their own sugarcane to reduce on expenses as a result of the credit crunch.

Kyaligonza's plight is one faced by many sugarcane outgrowers in Uganda. For instance, the farmers are not sure how much they are supposed to earn from their cane because of the various interventions by the sugar company.

Joronim Bategeka, an outgrower, says: "I started with 10 acres from which I earned sh3.5m after 18 months and sh14m in the second harvest season."

Bategeka, who expanded his enterprise to 25 acres, earned sh2m during the first harvest and now expects sh4m during the second harvest.

He says the earnings reduce because the company deducts all the money advanced to the farmer in the course of production. "Most of the farmers here grow sugarcane on credit. While the farmers own the land, the company owns the sugarcane. The money is in form of farm implements, labour and fertilisers."

Like most farmers, Bategeka has no idea how the final payment figure is reached. "We do not even know the tonnage from our farms. It is the company which decides how much the sugarcane from your farm costs."

Calculations indicate that farmers earn an average of sh350,000 per acre.

The farmers are also unhappy about the sugar companies for taking about two to three months to pay them.

"If we were being paid immediately, we would have no complaints, but by the time you are paid, you have incurred many debts," Kyaligonza says.

To make matters worse, many people grow only sugarcane on most of their land, leaving no room for other crops. "This has caused food security and poverty," says Marble Kizza, the sub-county National Agricultural Advisory Services coordinator.

Need for diversification "We have realised other crops such as maize and bananas are marketable," says Livingstone Mwesigye, a farmer.

He says although he maintains 13 acres of sugarcane, he has put 12 acres under other cash crops. "I have five acres of maize, two acres of pineapples and several of bananas."

Compared to other crops, sugarcane earns peanuts. One can plant about 400 banana trees on an acre of land and after 12 months, earn about sh100,000 every week from the crop.

If one planted maize on the same piece of land, he would earn about sh3m. Maize has got an advantage because in just 18 months, a farmer makes at least two harvests.

Budongo farmers have fertile soils which can allow them to diversify. Batekega says the advantage of sugarcane growing over the others is the availability of a ready market for the produce. He says even if the pay is little, the money comes in a lumpsum.

"I do not advise one with just two acres of land to go into sugarcane farming because it will leave them with no space for other crops," says Bategeka.

Kiiza says they are now focusing on helping farmers to diversify. "Diversification will make sugar companies realise how important the cane growers are and force them to offer better pay."

What the leaders say

According to the farmer's leaders, most of their problems are a result of a lack of sugar policy. "There is no sugar sector regulatory framework in the country. Contract terms for different cane growers are different in Mukono, Masindi and Busoga," says Moris Ngabitho, the chairman, Uganda National Association of Sugarcane Growers.

At the regional level, the farmer in Uganda is paid less than the one in Kenya and Tanzania. While a sugarcane farmer in Kinyara receives sh32,000 per tonne delivered at the factory, a farmer in Kilombero in Tanzania receives sh49,000 per tonne, while the one in Kenya gets sh63,000.

In Uganda, Kinyara Sugar pays sh32,600 per tonne at the factory gate, Sugar Corporation of Uganda pays sh24,000, and Kakira pays sh38,000.

There are also variations as to who pays for harvesting, transportation and offloading of the cane.

Cane growers also complain of high interest rates on loans given to them to facilitate cane production.

Another complaint is that while the financial benefits per tonne are the smallest, the companies take long to pay them. For example, while it takes sugarcane growers for Kinyara 600 days to plant, nurture and harvest the cane, a farmer is paid only sh397,208 per tonne. However, a miller who handles the canes for just 36 hours earns sh738,809 per tonne, while the Government, through the VAT deductions, earns sh204,483 per tonne.

"At the time of the cane sale to the miller, the grower only receives part payment of sh32,600 and waits for the balance at close of the financial year," Ngabitho says.

The farmers say lack of a national sugar policy leaves the farmers at the mercy of the factory owners. "In the region, it is only Uganda that does not have a Sugar Act and a sugar authority," he says.

However, Nelson Gagawala Wambuzi, the state minister for trade, says the Government will soon have a sugar policy in place.

He says the issue of low prices of sugarcane has been around for sometime now. "It is not only sugarcane but even other raw agricultural produce."

Wambuzi advises farmers to increase the acreage in order to improve on their pay. "Farmers have to take investment options to expand their fields while taking care of food security," he says.

V. S Somaiya, the group manager-agriculture Kakira Sugar Works, says it is difficult to have the same prices for millers because companies face different challenges. "The economic situations for companies are different and that is why they offer different prices."

This implies cane growers should handle the price differences with their respective milling companies.

"We are considering the farmers' complaints and will soon give them improved terms," an official at Kinyara said.

For now, the outgrowers can only hope for a better future.