Governors, Legislators, Farmers and other key sugar stakeholders on Saturday unanimously endorsed Kakamega County Governor H.E FCPA Fernandes Barasa as the Champion of sugar matters in the Lake Region Economic Bloc (LREB) during the 2023 Sugar Conference that was held at Masinde Muliro University of Science and Technology in Kakamega County.
The Conference that provided a platform for stakeholders to review the progress of implementation of Sugar Industry Stakeholders Taskforce and enhance the capacity of devolved units to respond to challenges facing the sector recommended as follows;
1. The Pains and Gains of Sugarcane Farming.
On this, the conference recommends that;
The farmer should be involved in the pricing formula and general policy development.
✓ Out grower companies and or farmer cooperatives be revived and allowed shareholding in the planned leasing of state owned factories to the private sector
✓ Writing off sugar sector liabilities should be done after an extensive audit of debts owed to farmers, workers and suppliers
✓ Zoning of sugarcane farming should be done under clustered regions and restrict weighbridges to their respective catchment regions.
✓ The Sugar Development Levy should be introduced and operationalized and used to support cane development and finance research
✓ Government develops clear guidelines for harvesting and transportation to address existing inefficiencies
✓ The sector adopts an integrated Information and Communication Technology (ICT) infrastructure across the value chain
✓ The planned revival and commercialisation of state owned sugar factories should be preceded by robust cane development
2. Milling Efficiency & Pricing: why imports are cheaper.
The conference recommended that:
✓ Parliament urgently expedites enactment of the Sugar Bill, 2022 and attendant regulations to establish law and order in the sector
✓ The Ministry of Agriculture forms an all inclusive implementation committee to oversee faster implementation of reforms for the revival of the sector
✓ Government establishes an independent sugar industry research station for agronomical research with support from the Sugar Development Levy. Focus should be on development of a cane variety that matures within 12 months.
✓ Parliament provides for the establishment of the Sugar Arbitration Tribunal to handle disputes and entrench Alternative Dispute Resolution to ensure courts are the last resort in handling disputes.
✓ Government to create a state agency to handle sugar importation whenever deficits arise. The Kenya Sugar Board in consultation with the Kenya National Bureau of Statistics should determine the deficits.
✓ The Lake Region Economic Bloc establishes an Integrated Industrial Park anchored on the sugar sector. Regional universities to support the establishment of centres of excellence in sugar industry research.
✓ The sugar sector should adopt green technologies, diversify from the use of artificial fertilizer and use organic fertilizer for smart agriculture.
✓ Sugarcane farmers should access climate change financing through carbon credits since sugarcane absorbs carbon dioxide from the atmosphere.
✓ Government should review the tax regime to create a tax friendly investment environment including duty waivers on industry products like fertilizer, farm implements, and factory equipment.
✓ Sugar should be classified as food and not a commodity
3. Sugar sector governance: ownership, legal and regulatory framework
The conference recommended that:
✓ With devolution, County Governments should be involved in the management and development of the sugar sector. After writing off the liabilities, counties should assume 20% of government shareholding with 80% going to farmers through out grower organizations.
✓ Out grower organisations be re-introduced and strengthened through training and capacity building using funds from the Sugar Development Levy
✓ Government appoints crop inspectors with clear roles to support agricultural extension services provided by county governments and millers
✓ Develop and gazette clear regulations on repackaging of sugar to ensure retailers acknowledge the source of the sugar. Kenya Bureau of Statistics to play its role of enforcing regulations on packaging of local and imported sugar.
✓ The bill includes policies on sourcing of inputs including seed cane as happens for other crops like maize and coffee
✓ The sugar regulator provides regulations to govern utilisation of nucleus land to ensure optimal utilisation for cane development and research. National and County Governments should develop land use plans
✓ Government establishes a fund where farmers can access affordable credit for cane development and procurement of inputs
✓ The sugar sector should use existing intergovernmental structures as provided for in the Intergovernmental Relations Act to address disputes in the sector that are intergovernmental.
✓ County Governments provide for support to the sugar sector through their respective County Integrated Development Plans (CIDPs)
✓ Millers should invest a minimum of three per cent of their profits in research and innovation to improve productivity and finance delivery of extension services to cane farmers.
4. Debt management and sustainable funding model: which way forward for farmer and miller liabilities?
The conference further recommended that:
✓ Government should carry out a detailed audit of the debts existing in the sugar factories to determine what is owed to farmers, input suppliers, workers and other agencies.
✓ The total debt in Mumias Sugar Company stands at KShs.33, 654,593,000 which include KShs.21, 058,583,000 in total debt and KShs.12, 596,010,000 in financing cost according to the Mumias Sugar 2018 Annual Report and Financial Statements. The government should consider paying or waiving.
✓ A sugar development fund should be set up to allow counties contribute money to support farmers in cane development activities.
d) Governors in sugar growing areas should commit to support sugarcane farmers by setting aside funds for cane development.
✓ The sugar regulations should limit the number of factories that can be licensed to operate within the same catchment zone to eliminate poaching make farming profitable.
✓ Following the enactment of the Sugar Bill into law, County Governments should develop local level legislation to facilitate implementation of the anticipated reforms.
✓ County Governments should be empowered to register all sugarcane farmers through a digitalized system from community level so that fertilizer and other farm inputs are distributed to actual farmers.
The Region looks forward to swift implementation of the recommendations from the conference for the revival of the sugar sector.