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Sugarcane farmers to bag Shs18b as Kakira ups pay
What you need to know:
Boom. Sugarcane farmers to reap Shs18 billion following an increase in bonus pay.
Jinja. Sugarcane farmers under the Busoga Sugarcane Outgrowers Association are expecting to reap at least Shs18 billion this financial year following a decision by Kakira Sugar Works management to increase bonus pay for every tonnes of sugarcane supplied to the company.
The amounts could rise up to Shs21.1 billion or Shs28 billion in bonus pay depending on the total amount of sugarcane the farmers will have supplied by June 31, 2016.
Speaking to Daily Monitor last week, the joint managing director of Kakira Sugar Works Ltd, Mr Mayur Madhvani, said Kakira has so far registered production shortfalls of about 25 per cent of installed production capacity, which he blamed on the ongoing El Nino rain and “small sugar firms”, which he said had been taking sugarcane, which should have ordinarily gone to Kakira Sugar Works.
“We were hoping that this year we would have 180,000 metric tonnes and export between 80,000 and 100,000 metric tonnes, but it now looks like we shall have for Uganda alone and none for export,” he said.
Industry watchers now view the increment as a move aimed at staving off competition from “small sugar firms”.
Last year, the firm paid farmers a bonus of Shs5,000 per tonne supplied, but the amount has now been revised upwards to a minimum bonus of Shs15,000 per tonne supplied.
Under the new arrangement, if the farmers supply 11.4 million tonnes, they will receive a bonus of Shs20,000 per tonne, which will translate into Shs18 billion. If they supply 1.3 million tonnes of sugarcane, they will be paid a bonus of Shs17,000 per tonne, which comes down to Shs21 billion.
