New entrant buoys Rwanda sugarcane farmer’s hopes for better pay - The East African

New entrant buoys Rwanda sugarcane farmer’s hopes for better pay

Tuesday August 30 2016

Kabuye Sugar Works, the sole sugar miller in

Kabuye Sugar Works, the sole sugar miller in Rwanda owned by Madhvani Group of Uganda, has been producing between 10,000 and 14,000 tonnes annually. PHOTO | CYRIL NDEGEYA 

By Johnson Kanamugire

Sugarcane farmers are pushing for better prices following the entry of a new investor in the sector ending the longstanding monopoly of Kabuye Sugar Works.

Mauritius ACS Ltd has set up a large-scale sugar factory in Eastern Province, creating huge demand for sugarcane supplies to drive its projected 100,000 tonnes sugar output target on annual basis.

Kabuye Sugar Works, the sole sugar miller in the country owned by Madhvani Group of Uganda, has been producing between 10,000 and 14,000 tonnes annually, and hadn’t had any internal competition.

The development has been welcomed by the majority of sugarcane growers who see it as an opportunity to end years of grievances over selling below the cost of production.

“We have had many meetings with the factory managers demanding that we get saved from the loss, but there has been no change. Many of us lost interest in growing canes because revenues never matched the high cost of production and none was willing to hear that,” said Juvenal Rukera, a farmer in Rulindo District who has been growing sugarcanes for the past 10 years.

While farmers are paid Rwf96,000 per the eight-tonne truck of ready-to-crush sugarcanes — Rwf12 000 per tonne — they incur a lot more costs including Rwf21,000 pay for workers in harvesting and transport, and Rwf8,000 for loading trucks, among other expenses.

To this, add the costs incurred for prior investment in land preparation, inputs, seeds and manpower which make farmers earn little to zero profits.

“I spent Rwf400,000 and ended up getting Rwf350,000 on my two hectares sugarcane plantation last year. I decided to stop until the price per tonne is doubled or at least increased to Rwf18,000,” said Mr Rukera.

Mr Rukera is one of the farmers who had dedicated their private or rented land to sugarcane plantations, but later abandoned them due to the lack of attractive pricing in the sugarcane industry.

Some replaced the sugarcanes with other crops like bananas, maize and beans that they label as “fairly profitable” and which, unlike sugarcane plantation, are harvested two or thrice in a year.

Therefore, the situation coupled with cane yield losses arising from frequent floods caused sugarcane supplies to dwindle resulting in stagnation of Kabuye’s sugar production for years. The factory heavily depends on small-scale out-grower farmers for cane supplies.

Other supplies come from the factory’s own cane plantations on some swamp land leased to it by government along Nyabarongo River, but whose harvests failed to spur production as they are mostly washed away by floods.

Attempts to get a comment from Kabuye Sugar Works were futile by press time, but the managers of Madhvani Group had earlier dismissed farmers’ complaints saying that prices have for several times been adjusted per the factory performance.

Officials at Ministry of Agriculture could not blame farmers’ grievances entirely on the long-standing monopoly of the sector.

Tony Nsanganira, State Minister for Agriculture said there has been lack of strong collaboration with farmers for them to adopt practices that boost production per hectare, which could lower the cost of production.

“Millers should strive to make farmers feel attracted to growing sugarcane like any other lucrative crops if sustainable cane supplies is to be maintained. This calls for facilitation and millers don’t have to aim at just profits when farmers are not taken care of,” he said, adding that the new investor’s entry could bring about significant changes in the sector.

Rwanda seeks to meet the growing annual sugar demand expected to reach 160,000 tonnes by 2020 from the current 90,000 tonnes. Its current production stands at 12,000 tonnes with the rest being imported.

However, land for needed sugarcane produce has remained an issue with Kabuye factory operating far below its capacity.

The factory managers recently said that plans to double sugar production were hampered by lack of additional 7,000 ha land in the less flood-averse upland to grow sugarcanes.

It is planned that the Mauritian miller would grow sugarcane on an 8,000 ha land that government plans to acquire from the residents and lease to the investor. Besides, 2000 ha plantations are to be grown through out-grower farmers across Kayonza and Kirehe Districts.