Sugar farmers eye more stakes in millers

Former Sugar Board chairman Saul Busolo (centre) addressing the press in Kisumu. [Collins Oduor, Standard]

Cane farmers now want to be listed as major shareholders in State-owned sugar mills in the proposed privatisation of the factories. They said they will only benefit from the privatisation if they are allowed to have an integral role in ownership of the mills.

The concerns were raised as a task force met experts in Kisumu to fine tune their findings from the field guided by line industry experts early this week.

Dr Jonathan Mutonyi and Priver Toywa of the Sugar Veterans Consultative Forum (Suveco) strongly lobbied for the stakes.

Toywa, the Suveco secretary and a former agronomist at Mumias Sugar Company, sparked the debate, which elicited mixed reactions. He said the much hyped privatisation may not be the solution to farmers’ woes.

Instead, he proposed that more ownership be given to the farmers and communities around the factories. “This may ultimately disenfranchise farmers when decisions are taken based on profit maximisation at the expense of the farmers and local communities,” said Toywa. He said if farmers are given a larger stake, they will safeguard the factories’ interests by monitoring their daily operations closely.

Kenya National Alliance of Sugarcane Farmers Chairman Saul Busolo echoed the sentiments as one of the viable solutions to the industry. But a former Mumias Director Eliud Kakai dismissed the concept of ‘indigenisation’, saying the term ought to be paraphrased so that it doesn’t “balkanise” the industry.

‘’When you rally communities to own shares and curve sugar zones as their own, it will balkanise the industry,’’ said Kakai.

Universal name

While the idea is good to effect, he called on the experts to rethink about a universal name that will not delineate non residents of the areas the sugar factories are located. ‘’We need to come up with a more universal name to replace ‘indeginization,’ he said.

Kakai said state accumulated assets should be managed by private investors. Mutali disclosed debts owed to the farmers should be turned into shares or equity so that they can own significant stakewhen the industry is privatized. But another farmer Mr Otieno Mikara told farmers to think of the best way to privatize the industry.

He said the common rule of the Thumb in privatization is that farmers 51 percent of the shares is offloaded to the investors and the State gives up managerial control.

But the remaining stake is significant to be redistributed between the farmers with the government reserving a small percentage to monitor the investors progress.