Government initiative to boost food security timely

A government lifeline to the sugar industry should see a return to improved fortunes to a sector bedeviled by declining productivity, debilitating inefficiencies and mismanagement. The bailout comes in the form of the writing off of debts worth Sh39.7 billion that sugar millers owe the government via the Sugar Development Levy Fund.

These guarantees were announced by President Uhuru Kenyatta at the Agricultural Society of Kenya Show in Nairobi on Friday. They included a one billion shilling monetary bailout to the cash-strapped Mumias Sugar, the biggest sugar miller in the county where the government has a stake. Mumias is expected to secure another Sh2 billion through a rights issue this financial year as part of a package announced to revive the sugar sector.

The Government has reiterated its commitment to boost productivity in this sector and already plans are underway to privatise some sugar millers to increase efficiency. In this regard, the government shareholding in Chemilil Sugar, Muhoroni Sugar, Sony Sugar, Nzoia Sugar and Miwani Sugar is expected to drop significantly. To the Exechequer, the holding of stocks in these millers may no longer be tenable — the Government has already spent Sh1.4 billion to buy equipment in nine sugar mills, Sh1.2 billion for cane development, Sh2 billion for credit to farmers and Sh1.5 billion for rehabilitation of sugar mills.

Nevertheless productivity still dropped on account of aging equipment, operational inefficiencies and mismanagement. Although the sugarcane growing areas of Nyanza, the coast region and the Western Kenya counties of Busia, Kakamega and Bungoma still produce the bulk of sugar consumed in Kenya, imports from countries like Brazil and Uganda help to fill the deficit. It has been proposed that Kenya should begin to grow faster maturing cane to meet its domestic demands and export the surplus. This will also mollify apprehensive farmers who may feel that more cheaply produced imports from neighbouring countries would wipe them out, especially if millers reject cane grown on their farms.

A recent announcement that the government had negotiated an import agreement with Uganda raised a storm with farmers in the Western Kenya sugar belt complaining that they would lose their source of income from local sugar millers, particularly if smugglers flooded the Kenyan market with cheaper imports. Local sugar producers have struggled to raise cane yields but have still been unable to favourably compete with other sugar growers. Therefore, they will be relieved by these protectionist initiatives announced last week.

And it is not just sugarcane farmers who have benefited from a government programme to boost agricultural productivity. A government subsidy programme has seen prices of fertiliser reduced from Sh3,700 to Sh1,800 for DAP, and from Sh2,700 to Sh1,500 for CAN. President Kenyatta announced that this year, 206,000 metric tonnes of fertiliser was distributed through the National Cereals and Produce Board to farmers in a subsidy programme that cost the Government Sh3 billion. And in a desire to further lower the cost of this input, the Government last month broke ground for the construction of a fertiliser plant in Uasin Gishu that will ensure quality and cheaper products. It is anticipated that the factory will blend fertiliser and eventually get into full-fledged manufacturing.

This comes at a time when more farmlands are boosting their productivity under government supported irrigation programmes. Last year the Government rehabilitated and expanded national irrigation schemes by approximately 25,000 acres and this financial year, Sh13 billion was allocated for the completion of 175 irrigation projects. It is anticipated that this will bring an additional 42,500 acres under irrigation once these programmes are complete.

These programmes must be applauded as they bolster other efforts to boost food security.