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Kenya put to test in applying sugar Act

By Michael Arum | May 14th 2019

Public policy has the power to be transformative, which is why we invest in it. Good policies change economies; solve old and persistent problems and create new dawns in frameworks constructed by political leaders, technocrats and experts, all with the aim of changing our collective future.

What we do not want are new sugar regulations that deepen the decline of our sugar industry, increasing imports, driving away farmers, and felling sugar companies.

Thus in 2013, Kenya signed into law the Statutory Instruments (SI) Act, which obliged our law makers to carry out an analysis of the impact of any new statute. Moving to regulatory impact assessments (RIAs) requires new skills, but it is now law, which makes it obligatory. Moreover, six years after the SI Act, it is reasonable to hope that each ministry has developed the posts and modelling skills to deliver impact assessments with each new round of proposed statute.

Industry proposals

Unfortunately for sugar farmers, that has not been the case with sugar regulations under review by the President’s office. The Ministry of Agriculture has not published a regulatory impact statement for its sugar industry proposals. The President ordered a task force, and the task force has also proceeded to examine the best possible policies for the future of our sugar industry without any impact statement.

We do not believe that either the ministry or the task force mean to disregard the law on the need for an impact assessment. Indeed, it is possible that the Ministry of Agriculture may have confused the need for a separate regulatory impact statement with the drawing up of the general explanatory memorandum, which is quite different.

But the legal requirement of the regulatory impact statement is that it explains the effect of proposed regulation, and that has not been done for the sugar regulations.Yet examining the effect of a regulation is extremely important in creating a vibrant economy for the future.

Impact assessment

That is why the ministry is obliged by law to give an assessment of the costs and benefits of the proposed  rules; of any other means of achieving the same objectives, and of the reasons for not using those alternative means – all in the regulatory impact assessment.

However, with none of this information provided by the ministry, the Government’s move to enhance public participation in legislation has also played out in allowing us to carry out our own regulatory impact assessment, which we have submitted to the ministry.

Under the Constitution, the public, communities and organisations affected by any policy decision must be involved in the decision-making process. The newly enacted Public Participation Act 2018 further enhances that public consultation.

In many ways, the need to reinvigorate our sugar industry has shown why these new laws on forming laws are important and where their value truly lies.

For at the heart of the currently proposed sugar regulations is a proposal that farmers be ‘zoned’. This means farmers would be obligated to sell their sugarcane to a designated buyer. Such policy has proven so damaging elsewhere that it has been abandoned in Australia, India and Pakistan. It is not that these economies didn’t try zoning, they did, but found it so damaging as to subsequently outlaw it.

In our case, Kenya does not need more setbacks caused by a damaging policy. The effect of sugar cane zoning will be more mayhem and an accelerated exit of farmers from the growing of sugar.

Thus, the proposed regulations could actually lead to increasing sugar imports, - which could have been supported by prominent importers, but may not have been supported by the National Treasury in seeking to curb our nation’s ballooning trade deficit.

Indeed, the prospect of further driving downwards domestic sugar production, affecting thousands of farmers, and even seeking special waivers from our trading bloc Comesa to have such policies, shows the value of assessing regulatory impact.

It is a must, and thus in the President’s office we now trust in pursuing regulation designed to deliver more livelihoods from sugar growing, rather than fewer.

For where ministries do not observe the laws, it is only right and proper that the President’s office should demand compliance at this latter-day juncture, in order for everyone to be able to determine the best way forward in creating a future of better livelihoods and better economic growth.

Mr Arum is the Coordinator of the Sugar Campaign for Kenyan cane grower

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