Sugar import ban crucial
What you need to know:
- The import ban is the most immediate measure to help breathe some life into the moribund factories.
- CS Munya must put his foot down to break up the cartels that have driven the millers to their deathbed and impoverished sugar cane farmers.
Agriculture Cabinet Secretary Peter Munya's ban on brown sugar import may be a case of doing too little too late, but it is a welcome signal, especially to the sugar belt of western Kenya.
Once a promising industry that created wealth for farmers and jobs for many young people, it has been bedevilled by numerous woes. Indeed, the vibrant sugar firms that dotted the former Nyanza and western provinces are today shells of what they used to be.
The influx of cheap imports has made it impossible for the millers to compete favourably as, thanks to their near-obsolete machines, general mismanagement and inability to introduce faster-maturing cane varieties, their production costs are simply too high.
SUGAR ACT
Mumias Sugar Company, once the poster boy of the industry, last crushed any cane several years ago. Nzoia and other state-owned sugar millers are virtually dead.
It is for this reason that the implementation of the report by a task force appointed recently by President Uhuru Kenyatta to look into the industry's challenges, has been eagerly awaited.
The recommendations include the reintroduction of the sugar levy, the privatisation of the sugar mills to enhance efficiency and the enactment of the Sugar Act.
The sugar levy will be charged to consumers to raise the revenue for farmers to develop the crop and a review of taxation will bolster investor incentives.
The import ban is the most immediate measure to help breathe some life into the moribund factories. Significantly, the CS has also suspended pre-shipment approvals and the extension of sugar import permits. While it is true that Kenya's sugar production cost is much higher than in the other Comesa countries, it has often obtained concessions to shield local firms from competition as they modernise and enhance their operations.
The biggest challenge, however, has come from the flooding of the market with cheap smuggled raw sugar. CS Munya must put his foot down to break up the cartels that have driven the millers to their deathbed and impoverished sugar cane farmers.
