How sugarcane experiment backfired, trapping farmers in poverty - Daily Nation

How State's experiment backfired trapping cane farmers in poverty

Monday September 19 2016

A farmer sorts out dry sugarcane at a farm in Yiro Village in Siaya County on February 10, 2016. Although Mumias produces about 50 per cent of the domestic sugar output, it continues to run up losses. PHOTO | TONNY OMONDI | NATION MEDIA GROUP

A farmer sorts out dry sugarcane at a farm in Yiro Village in Siaya County on February 10, 2016. Although Mumias produces about 50 per cent of the domestic sugar output, it continues to run up losses. PHOTO | TONNY OMONDI | NATION MEDIA GROUP 

By NATION REPORTERS
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Martin Wakhu’s life is anything but sweet — and all because he is a sugarcane farmer who has over the years invested his time and effort in the thankless, cashless cash-crop.

Mr Wakhu’s mud-walled and grass-thatched hut is all he can show after growing sugarcane for over eight years.

Like many of his age-mates, Mr Wakhu’s poverty exhibits the kind of economic havoc and helplessness that a new generation of cane growers is inheriting by growing a crop that has zero-returns for farmers, but which has puzzlingly created multi-millionaires within the distribution chain.

That smallholder cane farming is an experiment that went wrong is the untold story of western Kenya and Nyanza.

The failure is something few technocrats and politicians want to admit.

As a result, the government has continued to pour billions of shillings into the sector — trapping more farmers in a poverty cycle while still hoping that a solution will be found.

“We got it wrong in our model of cane production,” says Prof Anyang Nyong’o, an academic and politician who has studied the challenges of smallholder agriculture.

Fifty years ago, President Jomo Kenyatta’s administration, with aid from donors, lured hundreds of thousands of farmers in western Kenya and Nyanza to grow cane under contract.

It was hoped that this would give the regions’ peasant farmers a cash crop that could lift them out of poverty.

The pioneer crop of farmers have since passed their farms on to the next generation.

Sadly, however, the second generation farmers have nothing to show for their inheritance. Yet, merchants have grown wealthy from the proceeds of the crop.

Farmers like Mr Wakhu are a sad reminder of a dream deferred and an experiment that went wrong.

With large-scale production of cane all but gone, the voiceless small-scale growers have been left at the mercy of unorthodox policies and whistle-start-whistle-stop formulas.

“Honestly speaking, sugarcane is not the plant that I enjoy growing, but I have to because there is no other alternative,” Mr Wakhu said during the interview at his farm.

Although experts warned of the dangers of starting a sugar industry based on outgrower farmers’ cane, technocrats at the Ministry of Agriculture decided to go ahead because the experiment made political sense.

While other sugarcane growing countries retained the colonial era sugar plantations, Kenya went for the more politically correct, more expensive, smallholder schemes as bureaucrats struggled to settle the landless and allow peasants to grow cash crops.

According to secret letters from the Ministry of Agriculture, consultants had warned early enough that this model of cane production would not work.

“... It is not sufficient to merely produce the total quantity of cane required annually. It has to be grown, harvested and delivered with almost split second timing so that exactly the right amount of cane goes on arriving at the mill round the clock, day after day and week after week,” warned Commonwealth Development Corporation sugar farming consultant, Mr B C J Warnes in a declassified letter dated August 5, 1971.

CANE SHORTAGE

Mr Warnes was one of the tens of consultants who had arrived in Nairobi to advise the government on the future of the experiment, which had not succeeded anywhere else in the world.

His worry was that it would be impossible to maintain the military-styled discipline that was required in cane farming.

He also worried that the government would have little say on how an outgrower tended his crop.

“The outgrower is an individual. He can’t be hired and fired even if it were politically acceptable to do so, which it is not. And yet the collective fortunes of the entire body of outgrowers, and the milling company itself, depend absolutely on the willingness and ability of each and every grower,” the consultant wrote in a letter to senior officials at the ministry.

Whether this letter – or view — reached the Kenyatta Cabinet is not clear.

However, 45 years later, farmers like Mr Wakhu remain trapped in the sugar conundrum as factories are left with little or no cane to crush.

Mumias, so far the largest miller in Kenya with about 66,000 registered outgrowers, is only doing 20 per cent of its total capacity as it struggles with a biting cane shortage.

Although the company produces about 50 per cent of the domestic sugar output, it continues to run up losses.

For instance, it posted a net loss of Sh1.58 billion in the six months to December 2015, up from Sh1.4 billion during a similar period in 2014. It survives largely on government bailouts.

At the time when the sugar schemes were designed, secret documents indicate, that bureaucrats were privately feuding on how to organise farmers, whose smallholder plots were supposed to mimic large plantations in South Africa, Malawi, Uganda and Zambia.

Today, Kenya imports sugar from these four nations — thanks to its heavy reliance on smallholder production and ageing factories.

According to the Sugar Directorate, Kenya produces sugar at Sh95,000 per tonne on average, meaning that sugar from its mills is more expensive than its equivalent from Sudan, Egypt, Swaziland, Zambia, Malawi, Tanzania and Uganda.

Malawi’s average production cost is Sh35,000 per tonne.

EXTENSION SERVICE
When the Nation team visited the sugar-belts of western Kenya and Nyanza, it witnessed how lack of timing, ageing factories and irregular plots have left the industry in limbo.

Neither millers nor government officials have ready answers to the chaos in the sector.

Cartels have mushroomed in the chain, taking advantage of the general collapse of the industry as pilfering and cane poaching continues unabated.

As a result, farmers keep on grappling with low economic returns, high costs of inputs, poor roads and delayed payments.

Rules that were set to maintain discipline within the smallholder 10-acre farms are no longer followed and extension services have been abandoned. Nobody seems to care.

“Why should I hire extension officers for over 100,000 farmers? Farmers have been growing sugarcane for years and they do not need any advice to do so,” Mumias Sugar Company CEO Johnston Eroll said when asked about the absence of extension officers in his area.

With no sense of discipline within the farms, the outgrower-run schemes have become fields of wrath — at times at the mercy of extortionist gangs who torch cane fields in order to get cane-cutting contracts.

In Kisumu County, the sugarcane bribes is christened Chuth ber, meaning ‘beforehand', since it is demanded before harvesting is done.

We found that this bribe, paid by the farmer, is a mandatory requirement during harvesting in Muhoroni, Chemelil and Miwani zones.

It is often given to factory managers, contracted harvesters, loaders and transporters.

Farmers with mature cane are routinely forced to pay this bribe before their cane can be harvested.

Yet, they are not guaranteed that once this is done, they will be paid on time once the cane is delivered for crushing.

With the disorganisation in the fields, farmers lose either by oversupplying or undersupplying factories. The entry of sugar barons has not helped either.

“It is a complete mess and farmers have constantly found themselves between the two odds of oversupply and undersupply. They lose either way because when there is undersupply, the factories don’t make much and can’t pay them and when there is an oversupply, harvesting is not done on time and cane is delivered when it has no value.

"Sometimes it is harvested and left to dry, losing weight and earning less,” says Prof Nyong’o who also owns a sugar plantation.

Reporting by EDWIN OKOTH, GERALD ANDAE, JOHN KAMAU