Proposal to set cane prices, punish rogue millers welcome

Kenya can be a sugar supply station comfortably meeting its local demand, selling the surplus and competing with regional and international peers.

A customer picks a packet of sugar in a supermarket in Nyeri in this past photo. Sugar is as political as it is an emotive crop and calls for radical strategies backed by a strong political will to thrive. FILE PHOTO | JOSEPH KANYI | NATION MEDIA GROUP 

IN SUMMARY

  • With farmers producing an average 600,000 tonnes against a demand of 900,000, the country has resorted to imports to sate the burgeoning demand.
  • Farmers, on the other hand, have accused millers of blatantly flouting their contractual agreements by paying them late with some payments running into months without being honoured.
  • There is also need to introduce new superior cane varieties that have high sucrose content, so that the country moves from pricing model based on weight of cane delivered.

That exorbitant sugar prices have left a bitter taste in the mouths of many consumers is an open secret.

And for thousands of cane farmers across the country, the experience is even more harrowing, characterised by late payments, threats of cheap sugar imports and even lack of agricultural inputs.

Fixing these basics could actually be a major leap in addressing our perennial shortage once and for all.

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With farmers producing an average 600,000 tonnes against a demand of 900,000, the country has resorted to imports to sate the burgeoning demand.

However, even with the imports, projections are that the deficit keeps growing, with demand expected to now hit the one million tonne mark as production dips to about 400,000 tonnes in what is attributed to prolonged drought and a section of millers operating below capacity.

Production costs, on the other hand, are the most prohibitive, with Sh128,750 ($1,250) required to produce one tonne of sugar, the highest in the region and more than double the global average of $500.

The result is that machines that once roared crushing cane have grinded to a halt, bringing with them misery among millers and farmers as government now increasingly looks to the Comesa controlled cheap sugar imports to plug the biting shortage as demand grows by the day.

The blame game has only exacerbated the shortage. Millers have constantly blamed the government for paying lip service to the local industry by giving subsidies, which they claim do little to help them, while at the same time opening its borders to cheap imports.

Farmers, on the other hand, have accused millers of blatantly flouting their contractual agreements by paying them late with some payments running into months without being honoured.

RADICAL POLICIES

Farmers who have agreements with millers have, therefore, resorted to selling their cane to rivals who pay them in cash, even if it means selling for a song.

In fact one of the largest millers in Kenya had at one time to stop operations after farmers decided to take their cane to a rival protesting delayed payments.

Out of desperation farmers have uprooted cane, fragmented land into smallholdings and even moved to other crops like maize.

All farmers want is to grow cane, deliver in plenty, and get paid well and on time.

The concerted efforts by government to look for viable ways to import sugar on the premise that as a country we cannot produce enough should be done away with.

What we need are radical policies on tightening loopholes across the value chain and coming up with irresistible incentives that every single farmer will not hesitate to join sugar production.

Proposals to have government set up the minimum price that cane farmers can earn and spell out penalties millers who flout contractual agreement face are a welcome relief.

There is also need to introduce new superior cane varieties that have high sucrose content, so that the country moves from pricing model based on weight of cane delivered.

Sugar is as political as it is an emotive crop. Like maize, it calls for radical strategies backed by a strong political will to thrive.

Kenya can be a sugar supply station comfortably meeting its local demand, selling the surplus and competing with regional and international peers. But we must get our basics right.

Maina is the communications and marketing manager, Elgon Kenya.

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