Government plans to scrap off millers debts in move to save sugar sector

Workers at Chemelil Sugar Company demonstrated over delayed payment in Chemelil town last Friday. [Collins Oduor, Standard]

Sugar millers may have their debts written off as part of an elaborate plan to revive the industry.

However, according to a strategy unveiled by Agriculture Cabinet Secretary Mwangi Kiunjuri, last Friday, there will also be a forensic and management audit on all the public millers. If this goes well, the industry will receive short-term injection of capital to get the millers back on their feet.

This new lease of life is expected in the sugar sector after leaders from cane-growing regions agreed on key recommendations.

Coming at a time when the sector is on its knees, with demoralised farmers and a market infiltrated with cheap imports, Mr Kiunjuri said for the first time, the sugar sector would be orderly.

“We have both short and long-term strategies,” said Kiunjuri.

The nine-point strategy was as a result of a 15-hour meeting held at a hotel in Nairobi and attended by a section of governors, senators and MPs from cane-growing regions.

According to the strategy, the national and county governments as well as the Privatisation Commission, will collaborate in developing a road-map for revitalising the sector through identification of strategic partners.

A multi-sectoral team will also be appointed to review the legal and regulatory framework, and pay attention to the issues of sugarcane poaching and need for zoning.

“That sugar development levy be re-introduced to facilitate cane research, cane development and infrastructure development,” reads the resolutions in part.

The sugar development levy is a support fund for public millers that used to be included in the budget, which would be extended at times as loans to farmer. It was, however, removed to level the playing field for public and private millers.

From the resolution made, the menace of tonnes of imported sugar flooding the market was also addressed.

“That sugar importation be restricted to the provisions of Common Market for East and Southern Africa (Comesa) Free Trade Agreement (FTA),” read the clause.

Apart from Kenya being a Comesa state and a party to the FTA to import sugar from Comesa nations, the Government, through Treasury CS Henry Rotich, still gave a window for millers and other importers to bring in sugar duty-free from other markets last year.

This, Mr Rotich said, was because the Comesa nations were facing a shortage just like Kenya.

This led to an influx of brown sugar from countries like Brazil, which has later informed the crackdown that saw millions of tonnes of sugar impounded in warehouses.

Migori Governor Okoth Obado, who is the Agriculture chairman in the Council of Governors, insisted that the unveiling of the strategy had, however, not been informed by the current menace of sugar importation laced with chemicals.

“It is not the cheap imports that have triggered this meeting. We have been meeting for the last one year,” he said.

Kakamega Governor Wycliffe Oparanya, who is the chairperson for the Lake Region Economic Bloc, said counties would be making budget provisions for the industry’s revamping plans.

Regulations on how the revival will take place will be gazetted next week, according to Kiunjuri.

Other factors included in the agreement are re-establishment of Sugar Arbitration Tribunal, and formulation of a committee that will steer these resolutions that will rope in millers and the Attorney General’s office.