Sugar industry move a major boon for local farmers
Monday, July 13th, 2020
President Uhuru Kenyatta and his administration deserve accolades following the recent move by the Cabinet to adopt recommendations of the taskforce report on revival of the sugar industry.
Among the decisions taken by the Cabinet and announced by Agriculture CS Peter Munya was the abandonment of the plan to sell State-owned millers in favour of leasing them to private players for a period of 20 years, off-loading of the Sh62 billion debt that forced Miwani Sugar Company and Muhoroni Sugar Company into receivership and a ban on importation of brown sugar.
The Government has also reintroduced the Sugar Development Levy, adopted a pricing model that will be based on sucrose content instead of cane weight and gazetted sugar as a crop for the first time in the country’s history giving it the same status as tea, coffee, pyrethrum and even maize.
As a farmer, I really want to thank the President and the Government for the milestone steps they have taken to salvage the sugar industry from imminent death.
This is a positive move that will go a long way in alleviating poverty among sugarcane farmers in Nyanza and Western Kenya regions who have been suffering for a long time.
According to Munya, the leaseholders will be expected to revamp and modernise the sugar mill, which also include Chemelil Sugar Company, Nzoia Sugar Company and South Nyanza Sugar Company.
The State millers will be required to additionally produce ethanol and power so as to cross-subsidise the cost of sugar production, making it cheaper, as is the case in countries such as Brazil and Mauritius.
I concur with Governors from the two regions that the leasing of sugar mills will inject fresh investments into the mills, leading to higher productivity and subsequent employment of more workers and steady farm gate prices to the farmers.
This will no doubt guarantee a tremendous increase in sugar production for both local and export markets.
As the CS rightly put it, the importation of cane and brown sugar was a great disincentive to farmers and investors as locally-produced sugar could not compete with the illegal, cheap imports in the market and in the process negatively impacting farmers’ returns.
Apart from Nyanza and Western, there is also an emerging presence in the coastal area, specifically Kwale.
As such the Government could not afford to ignore it as many households and rural businesses in sugar belt areas depend on the injection of cash derived from the industry.
It is my hope that the Government will maintain the momentum in implementing the far-reaching reforms in the sugar sector to make State-owned factories modern, efficient, competitive and self-sustaining.
Indeed, there is no reason why Kenya, with the potential it has, cannot turn into an exporter rather than an importer of sugar. - The writer is a former President of Football Kenya Federation