Hope as sugar taskforce meets to rescue sector

Farmers have to wait for months to be paid for the cane delivered to public millers. [File, Standard]
A task force recently constituted to look into issues affecting the sugar industry has begun sittings in Kisumu.

The committee chaired by Kakamega Governor Wycliffe Oparanya will over the next three weeks identify challenges facing the industry and give recommendations to Agriculture Cabinet Secretary Mwangi Kiunjri early January.

Mr Kiunjuri will then report the findings to President Uhuru Kenyatta, to give orders on the way forward.

The committee was set up following a pledge by the President to bail out struggling public millers.

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Top among issues to be tackled is how to sustain inflow of raw material to the factories and payment of farmers after a write-off of Sh2.6 billion owed in arrears.

The team, which includes representatives from the millers, farmers, Government and governors from the sugar belt has been tasked with formulating policies that will help revamp the industry that has been on a nose-dive for the past few years, leading to job losses and economic ruin.

Kenya has in the past two years imported nearly 1.5 million tonnes of sugar to bridge a deficit created by challenges facing the industry.

The taskforce will meet next week, break for Christmas and resume on January 7 to conduct field visits in Nyando, South Nyanza, South Rift and Western Kenya sugar belts.

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Kiunjuri, who steered formation of the committee, said the taskforce is meant to ensure that all stakeholders in the value chain enjoy full benefits of their input, as part of efforts to restore competitiveness.

The taskforce is expected to review the policy, legal, regulatory and institutional framework of the sugar industry as well as emerging challenges such as importation and tax structures.

Low investment in cane development, fragmentation of land under cane and poor farming methods have been identified in the preliminary stages as the main technical challenges dogging production.

At the miller level, piling indebtedness, obsolete equipment, mismanagement, under-utilisation of nucleus estates and lack of diversification have been flagged as problems that need to be addressed on a priority basis.

Companies such as Mumias Sugar are struggling to stay afloat amid heavy debt.

Mumias, once the country’s largest sugar miller, has been unable to finalise its financial results for the year that ended in June and had to plead with the capital markets regulator for more time.

In a notice in the dailies three weeks ago, the listed sugar miller said it did not have the cash to conclude the audit and needed more time to handle material matters.

“CMA (Capital Markets Authority) reporting deadline extension request has been caused by operational matters due to the well-known financial challenges currently facing the company, leading to a delay in finalisation of our end of year account audits,” said acting chief executive officer Patrick Chebosi.

The taskforce will also undertake an absolute and comparative assessment of the industry’s competitiveness in the East African Community, the Common Market for Eastern and Southern Africa (Comesa) and globally.

These efforts are seen as the roadmap to steering the ailing industry out of the woods.

In September, cane farmers and millers - public and private - unanimously adopted a nine-point plan that was presented to Uhuru, which informed formation of the taskforce.

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Governor Wycliffe OparanyaSugar IndustryMwangi KiunjriAgriculture