Sugar cane farmers should now move to dairy, avocado farming

CS Agriculture Mithika Linturi (in glasses), accompanied by Agricultural Food Authority Cornelly Serem, inspects a dairy farming plant owned by Kapseret MP Oscar Sudi at Kapseret Constituency in Uasin Gishu County on March 8, 2024. [Peter Ochieng, Standard]

Kenya’s demand for sugar stands at around 1 million metric tons while the country’s production capacity is around 50 percent of the local demand.  

This leaves the country with a deficit of close to half a million metric tons which must be imported from mostly countries that are members of the Common Market for Eastern and Southern Africa (Comesa) as well as South American producers. Brazil which tops the world in producing sugar leads Latin America as Kenya’s next stop after Comesa. 

At the drafting of the Comesa agreement in early 2000, Kenya’s sugar industry was still in its infant stages and not well developed to compete with other sugar-producing countries in the trading block.  

The country was granted Comesa safeguard measures of imposing a duty on imported sugar from 2002-2010 to protect the local industry from unfair competition.

The government has requested for extension of these measures a record seven times, with the latest extension running from 2023 to 2025. Will Comesa grant this extension an eighth time, beyond 2025? This is the question that players in the industry have been crossing their fingers awaiting its fruition. 

We are still unable to compete with member countries, especially Egypt, Zambia and Sudan where the cost of production of a ton of sugar stands at around $300. In Kenya, our production cost of a similar amount of sugar is $700, which is way above the world’s average production cost.

Some of the factors contributing to the high cost of production making our sugar uncompetitive include Kenya’s cane being rain-fed while our competitors like Egypt and Sudan have elaborate irrigation schemes yielding quality cane. Further Kenya’s cane is grown in small farms, which are unsuitable for mechanised farming. 

There is also the case of competitor countries using a sugarcane variety that matures fast. Most of these countries grow a variety that matures in 9 months while Kenya has been growing an 18-month maturing variety. 

Kenya also suffers from a poor road network in cane-growing areas, which leads to high costs of transport. 

Cases of corruption where bodies that manage sugarcane production fail to pay farmers owing to unexplained reasons have been killing the morale of farmers. This has affected the capacity for cane production in the sugar belt zone. The same openings for corruption have caused imported sugar to be re-packaged and sold locally, which further deals a blow to the industry.  

Sugar-producing competitor countries like Egypt have few high-capacity factories as opposed to Kenya which has numerous small-capacity ones. For instance, Khaleej Refinery of Egypt has a production capacity of close to 1 million tonnes of sugar per year which is more than the combined 16 sugar factories in Kenya whose capacity is 650,000 tonnes per year. 

Brazil on the other hand has sugar as a by-product of the energy production process, meaning the country can literally give away sugar free. That is because electricity and ethanol are the key products of the process. 

With these factors and bearing in mind time and resources involved, it is high time Kenya’s government explored alternative ways that will offer a long lasting solution to the sugar problem in the country. 

The current Sugar Bill 2022 that is before Parliament is a game changer in dealing with farmers' grievances. The Bill proposes duty be imposed on imported sugar to protect local farmers. However, this will not augur well with other Comesa members who have been patient with Kenya’s regular postponement of the deadline to restructure its sugar sector and make it more competitive. 

This year, the government wrote off over Sh100 billion worth of debts in the industry, a trend that has continued over the years with privatisation of sugar factories being the only way out for government to save public resources.  

Dairy and avocado farming therefore offers the best alternative for the sugarcane growing areas. Sugar cane farmers must now move into dairy and avocado, especially because the country now produces 5.8 billion litres of milk annually which is amongst the top three producers in Africa. Kenya’s government plans to double dairy production in 10 years which sits well with any attempt by new entrants to join. 

Initial investment for dairy farming is relatively low and within reach by many Kenyans. It doesn’t require a large farm. An acre can accommodate up to four dairy cows with projected monthly income of Sh16,500 per cow as per latest industry estimates. This translates to Sh700,000 per annum.

Dairy farming also creates a number of jobs within the value chain. According to available data, it emerges higher compared to other ventures like tea and coffee. 

Africa imports $5bn worth of dairy products from outside the continent. This is because only Kenya and Ethiopia are milk self-sufficient, leaving the rest of continent to import dairy products from Denmark and New Zealand amongst other European countries. And so sugarcane farmers switching to dairy will harness the potential of the dairy market in Kenya to top in the continent. 

Avocados on the other hand have become a world delicacy with demand outmatching supply. This has led to high prices on the international market. The fruit is favourable to the Kenyan climate and altitude in some instances growing wildly with little care or investment.  

On average, an acre of avocado can accommodate 80 trees whose moderate yield is 500 fruit pieces per tree. That translates to an annual income of Sh400,000 with minimal inputs. This too can substitute cane farming as the country is Africa’s top producer with potential of overtaking Mexico, thereby becoming world avocado producer.