Key players in Kenya’s sugar industry are proposing a number of changes to uplift dwindling fortunes of sugar sector, currently supporting over 400,000 small-scale farmers, who supply over 90 per cent of milled cane.
Convening under the theme Revitalisation of the Sugar Sector in Kenya, Governors and other leaders from the Lake Region Economic Bloc (LREB) want out grower companies and or farmer cooperatives be revived and allowed shareholding in the planned leasing of state-owned factories to the private sector.
Other recommendations include, introduction of Sugar Development Levy, to support cane development and finance research. They also want Zoning of sugarcane farming to be done under clustered regions and restrict weighbridges to their respective catchment regions.
The Bloc said writing off sugar sector liabilities should be done after an extensive audit of debts owed to farmers, workers and suppliers. The planned revival and commercialisation of state-owned sugar factories should be preceded by robust cane development.
The main goal of the Sugar Conference 2023 was to provide a platform for review of the progress of implementation of the Sugar Industry Stakeholders Taskforce Report and enhance the capacity of County Governments to respond to challenges facing the sugar sector.
“This goal will be achieved through championing the development of national and county level government policies and trade agreements that protect the sugar sector as a strategic economic venture,” according to a communication from the meeting.
In Kenya, sugarcane production is mainly undertaken by small-scale farmers who contribute up to 90% while the remaining 10 per cent is done by large-scale farmers and the factory nucleus estates. Kenya produces approximately 700,000 tons of sugar annually while the consumption averages 1,100,000 tons creating a deficit of 400,000 tons (AFA Sugar Statistics 2021).
This leaves a window of opportunity for developing the subsector. However, this window of opportunity is visibly being sealed by competition from unscrupulous traders of cheaply imported sugar and inadequate legislation toward the protection of the sugar industry from exogenous effects.
It is in a bid to salvage the industry from its demise, that the Lake Region Economic Bloc (LREB), in collaboration with County Governments, Kenya National Federation of Sugarcane Farmers (KNFSF), Kenya Association of Sugar Manufacturers (KASM), and Research Institutions as well as Development Partners, organized the two-day Lake Region Economic Bloc (LREB) Sugar Conference 2023.
Moses Wetangula, Speaker of National Assembly said the conference recommendation will enrich Sugar Bill currently before the Parliament.
“Although Parliament is on recess, I have called a special sitting whose only two agenda is about sugar. The session will discuss the memorandum by the Executive to write off debts owed by sugar millers to government and the second and third reading of the Sugar Bill,” he said.
To address cheap sugar imports, the conference recommends that Parliament urgently expedites enactment of the Sugar Bill, 2022 and attendant regulations to establish law and order in the sector.
The Government was also asked to create a state agency to handle sugar importation whenever deficits arise. The Kenya Sugar Board in consultation with the Kenya National Bureau of Statistics should determine the deficits.
The Ministry of Agriculture was also called upon to form an all-inclusive implementation committee to oversee faster implementation of reforms for the revival of the sector.
Parliament should also provide for the establishment of the Sugar Arbitration Tribunal to handle disputes and entrench Alternative Dispute Resolution to ensure courts are the last resort in handling disputes.
Other recommendations touched on review of the tax regime to create a tax friendly investment environment including duty waivers on industry products like fertilizer, farm implements, and factory equipment.
“Sugarcane farmers should access climate change financing through carbon credits since sugarcane absorbs carbon dioxide from the atmosphere. Sugar should be classified as food and not a commodity.”
Kenya’s sugar industry snoozes as era of cheaper imports loom – Kenyan Wallstreet
