The Ugandan government has long promoted agricultural commercialization as key to Uganda’s economic future. Sugarcane commercialization, in the form of contract farming (CF), has been a preferred instrument, leading to the emergence of large and medium sugar corporations in Uganda’s countryside. This study provides insights into the commercialization process of smallholder agriculture through sugarcane contract farming and the implications of this for land rights, labor relations, and rural livelihoods, taking Uganda’s Bunyoro sub-region as a case. A qualitative approach was taken involving in-depth interviews with participants directly affected by changes to sugar production and/or participated in CF schemes (as outgrowers). Findings highlight that CF schemes, engineered by a convergence of power and interest between the Ugandan state and Indian capital investments, adversely integrates rural farmers into commodity production networks through unequal contractual relations, expanding agro-extractivist search for cheap land and labor rather than bringing inclusive rural development.