Licensing of sugar millers not justified

At first glance, plans to set up two new sugar factories in Busia County would elicit little notice and certainly no comment.

But on a closer look, it seems strange that any prudent investor would plan to put money in a sector and a region where established players are staring at massive losses and possible collapse in a little over three months’ time, when sugar from the Common Market for Eastern and Southern Africa (Comesa) member countries is expected to swamp the local market.

Indeed, although the Parliamentary Committee on Agriculture, Livestock and Co-operatives has raised a red flag over the country’s preparedness to meet the Comesa challenge, the bigger riddle that demands a quick unraveling is why the Kenya Sugar Board (KSB) is licensing new players while doing nothing to stem the cane theft perpetrated by new sugar milling companies.

Yet the viability of these established sugar millers has been threatened by these poachers to the extent that they have little time, or worse, money to prepare themselves against external competitors.

Some have seen their balance sheets precipitously slide from black to red in a relatively short time.

An MP told the committee that cane theft was a result of poor enforcement of the law.

It beats logic why the regulator licenses millers who clearly do not have either a plantation to grow the crop nor an out-growers scheme for it does not require rocket science to know from where the new companies will get their raw materials.

While they are at it, perhaps, another issue the MPs should look into is the importation of sugar, sometimes, by the licensed sugar milling companies.

Clearly, there is a conflict of interest that disadvantages the farmer whether contracted or not. This is because the miller is likely to abandon the sugar cane growers whenever he can make more money by importing.

The consequences of a collapsed sugar industry are dire to the people in the sugar belt and beyond and the entire government needs to get involved in finding a solution.