A powerful lobby group representing Kenyan farmers has questioned the Government’s plan to privatize its stake in the sugar industry without involving the cane farmers.
A section of farmers from Nyanza and the Western region have opposed the privatization plan. They are petitioning parliament to halt implementation of the sugar task force report, recently handed over to President Uhuru Kenyatta.
“We suggest that rather than privatize these factories, the state can lease out the milling plants and then let the cane farmers and millers run the sugar sector. Most of the state-owned sugar mills have outdated machinery that is obsolete and inefficient. Why not lease out these plants to investors who have the cash to revive them,” said Mr. Saul Busolo, former chairman of the now defunct Kenya Sugar Board.
Busolo, who also belongs to ‘The Sugar Campaign for Change’ (SUCAM) lobby group also points out that while the task force recommended privatization of all state-owned sugar mills, there is no clear roadmap on how this process will be conducted.
“Recommendations made in the sugar task force report do not indicate how the privatization process will be done. Further, while the privatization commission has a chair, it has not constituted a board and cannot therefore execute any of the commission’s mandate,” said Busolo.
SUCAM is an independent lobby and advocacy coalition composed of diverse institutions and individuals that have been advocating for the rights of the sugarcane farmer in Kenya.
SUCAM is also opposed to zoning, a key recommendation in the sugar task force report. “I would rather we scrap the issue of zoning which does not address the problems of productivity of the farmer and replace this with contracts farming where those cultivating cane can deliver to any milling plant,” said Mr Busolo.
His sentiments are shared by Mr Kipruto Kirwa, former Agriculture Minister in President Mwai Kibaki’s regime. Mr. Kirwa says that involvement of the state in the sugar industry has led to misery in an industry supporting the livelihoods of over 400,000 families in Western Kenya region.
There are also concerns that well known individuals, who have looted and run down these state-owned sugar mills, are still free persons with none facing prosecution.
Available figures indicate that cane farmers are owed an estimated KSh 2.4 billion by various state-owned sugar factories for delivery of cane.
This debt is made up of KSh 390.5 million owed to Muhoroni Outgrowers Company, Miwani Outgrowers Company( KSh 14.3 million), Chemilil Outgrowers( KSh 271 million) and Nandi Escarpment Outgrowers Company( KSh 143 million).
Others are Nzoia Outgrowers Company( KSh 427 million), Busia Outgrowers Company(KSh 110 million), Mumias Outgrowers Company(KSh 272 million), West Kenya Outgrowers Company(KSh 97 million), Sony Outgrowers Limited( KSh 476 million), Kibos jaggery factory(KSh 30 million), Muhoroni Multi-purpose Co-op Union(KSh 82 million) and Kisumu Sugarbelt Co-operative Union(KSh 132 million).
All the above state-owned sugar mills’ debts have been calculated by summing up the principal amount as well as accumulated interest.
In its latest report, the Global Agricultural Information Network (GAIN) forecast Kenya’s sugar production in 2019/2020 to remain flat. This is due to a lag in privatization of state sugar factories, poor investments in technology, and low cane harvests.
Kenya’s inefficient sugar industry has been shielded from competition arising from cheaper imports from Common Market for Eastern and Southern Africa (COMESA) countries.
The COMESA secretariat has now extended the import safeguards to 2021 and allows Kenya to import only upto 350,000 metric tonnes per year.
These trade restrictions, which have been in place for the past 15 years, give Kenya space to make its sugar industry more competitive before opening the gates for duty free imports from Common Market for Eastern and Southern Africa (COMESA) countries.
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