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Cane farmers turn to other crops as industry woes drive them to the brink

By Dalton Nyabundi | Published Tue, August 28th 2018 at 08:10, Updated August 28th 2018 at 09:18 GMT +3
Some of the tractors at Butali Sugar Company ferrying sugarcane to the miller for crushing. Experts have advised sugar millers in Kenya to employ alternative means of generating revenue. [Nathan Ochunge, Standard]

In summary

  • A few, however, say they are hanging on to see how new rules and bailout pledge play out before quitting altogether

The sugar industry is hurtling towards renewed uncertainty.

With a widening sugar deficit met by an influx of cheap imports even as local millers sink into huge debts, the more 600,000 farmers and 80,000 workers are contemplating a future without the industrial crop.

ALSO READ: Fresh controversy pushes sugar industry deeper into the brink

The acreage under cane has been greatly fragmented, falling from 220,000 hectares about 10 years ago to below 100,000 currently.

The public millers capacity has also fallen from an installed capacity of 35,000 tonnes of cane per day to just over 3,000.

Mumias, once the largest miller with the capacity to crush 9,000 tonnes of cane daily now crashes 1,000 tonnes despite a Sh1.5 billion bailout last year.

According to a petition to the Ministry of Agriculture by a farmers’ lobby, the Kenya National Federation of Sugarcane Farmers, the late maturing cane variety which takes up to 22 months is now harvested after 11 months due to an acute shortage in the market.

Ongoing research and adoption of early maturing cane have been halted by the scrapping of the Sugar Development Levy. This has seen the yield per hectare drop to 52 tonnes from 100 tonnes, exacerbated by land fragmentation.

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And although public millers blame cane shortage on poaching by private millers, more than half of the millers’ nucleus estates lie fallow. Lack of machinery has left them scrambling for the little available cane with private millers who offer better pay.

Poor efforts to lower the cost of production have also seen the cost per tonne of cane in the country see-saw between Sh2,800 and Sh4,000 while the same fetches at Sh1,250 in other regional countries.

Sugar belts

ALSO READ: Police join probe into sugar industry woes

This pushes up the cost of production. Over Sh10 billion in funds accumulated for sugarcane development under the outgrower firms across three sugar belts seem to have also been washed down the drain, according to the petition.

Results of an audit done 10 years ago are yet to be made public. Apart from crushing below their capacities, the public millers’ efficiency has fallen. They crush between 15 tonnes to 20 tonnes of cane to produce a tonne of sugar due to broken equipment and obsolete technology.

Muhoroni crushes 26 tonnes. Further, public millers’ inability to diversify or utilise bi-products like their private counterparts leaves them with thin margins, hence the perennial appeals for State bailouts to fulfill their financial obligations.

Their inefficiency and little expenditure in supporting cane development leave private millers with enough resources to harvest cane up to 300kms outside their own zones.

Billions of shillings pumped into efforts to rescue the millers have been hard-earned taxpayers’ money down a bottomless pit. Farmers, suppliers, and the taxman are demanding Sh84 billion from the millers.

A proposed Sh86 billion debt write-off after President Uhuru Kenyatta pledged to resuscitate the industry will not lift the millers out of the doldrums, according to Michael Arum of the Sugar Campaign for Change.

“It is a good idea for the Government to help the public millers clear their balance sheets, they are public investments anyway, but the Government needs to understand the challenges facing the industry in order to be able to save the industry. The millers are rocked by inefficiencies and need exhaustive renovation,” said Arum. He said about Sh2 billion spent on Mumias and Sh300 million to Chemelil to pay off farmers have not cushioned them from the “ever imminent collapse”.

ALSO READ: Alarm as shortages, high prices hit sugar sector

“I think the State should pump in money to finance the short-term renovation, write off debts and then hand over the factories to private investors under the privatisation programme,” he said. “Instead of offloading shares to the investors, they should just bring in capital for modernisation, run the millers to recoup their investments then return them to the Government.”

Now, a section of farmers across the Western, Nyando, South Nyanza and Coast sugar belts are looking for alternatives.

Kenya Federation of Sugarcane Farmers Deputy Secretary-General Atiang’ Atyang’ said farmers bordering Nandi areas of Kopere and Muhoroni are diversifying into dairy and coffee farming.

“We know for sure that at least 500 farmers have turned to coffee and a good number are also getting into dairy. Problems facing the sugar industry have pushed us to the very core of poverty and people are desperate for alternatives,” he said.

A Sh30 million milk cooling plant under construction in Muhoroni has encouraged more cane growers to take up dairy farming even as lucrative tea and coffee returns also lure more.

Poultry and maize farming are also being explored. Some farmers who have given up were disposing of their lands to escape poverty. “Imagine waiting two or three years for your cane to mature, then when you have harvested and transported to the factory, milled and sugar sold, you are told there is no money to pay you” said one farmer.

He said farmers were ready to give up on sugarcane if efforts to revive the industry failed.

Parts of the western belt has also reported farmers uprooting sugarcane to go into maize and other high-value crops. Farmers in western Kenya are also going to maize, soya and beans farming.

Atyang’, however, believes prospects for the industry are better. He said he hopes the Sugar Regulations Act promoting zoning will protect public millers from cane poaching.

ALSO READ: Claims of altered report on sugar stop House debate

Arum recommended that farmers integrate other high-value crops in the sugar plantations to supplement their income and boost their food security. Such farming methods have proven a success in India.

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