Cane wars may turn region’s economy sour

By Roselyne Obala and Leonard Korir

Costly fights  among sugar  millers over the control of  farmers  in Western Kenya  are threatening the region’s economy, with millions of  shillings already lost  through  cane  poaching  and damage to
machinery.

Workers have been injured in confrontations between employees of rival companies in the cane wars that have left a trail of destruction in  Kakamega, Bungoma, Busia, Kisumu and Migori counties.

Machinery worth millions of shillings have also  been  damaged and thousands of tons of cane left to go to waste in the industry war pitting bigger   sugar  companies and  the  mushrooming  private millers.

Players in the industry, which is the mainstay of the region’s economy, attribute the growing rivalry to dwindling cane acreage that can no longer sustain the State-owned and private millers. They warn it could cripple the sub-sector.

The cane wars pit Mumias Sugar, Chemelil, Muhoroni, Kibos Sugar, West Kenya Sugar, Sony Sugar, Transmara Sugar Company and the Sukari Sugar Industries in Ndhiwa.

Although farmers have greatly benefited from the competition as it has given them the leeway to go for companies with the best prices, observers say larger companies were the losers.

Mumias Sugar Company (MSC), the country’s largest miller has been at war with its neighbour, West Kenya Sugar company over alleged ‘theft’ of cane in Busia County.

MSC has accused West Kenya of buying cane from farmers contracted to them, noting that as a result they are losing  Sh4 million daily. West Kenya Company through their lawyer Raymond Olendo has dismissed the theft claims, stating that the accusations by MSC have never been proven in court or by the sugar arbitration tribunal.

“MSC should sue their contracted farmers for breach of contract and not wage war with its rivals,” he said.

Verify documents

He challenged MSC to verify documents of cane being transported to West Kenya if they belong to their contracted farmers instead of impounding the trucks.

“Lorries belonging to West Kenya continue to be vandalised and fuel siphoned, while transporting cane from farmers in Busia County,” alleged Mr Olendo.

He stated that MSC previously lost a case filed against them and Butali Sugar before the tribunal.

Mr Olendo also accused MSC of disregarding the past tribunal’s rulings.  He reiterated that they obtained restraining orders against MSC, the police and their agents from impounding or commanding their trucks, through the tribunal.

But Mumias Sugar Company’s Commercial and Cooperate affairs director Pamela Luta said:  “The vice is not happening at night anymore. The trucks pass through MSC in broad daylight in police escort,” she noted, calling for healthy competition among the millers arguing that there should be an equal playing field for all.

She said Mumias is losing 1000 tonnes of its developed cane daily to rival firms, which translates to 400, 000 metric tonnes annually.  The situation has worsened in the last two months and reduced the company’s productivity by 10 per cent.

Housing minister Soita Shitanda however challenged MSC to give its contracted farmers better terms to curb cane theft in sugar zones. Shitanda noted that the contracts are a mutual agreement signed between the firms and farmers.

“As long as Mumias continue to charge high transport cost and pay farmers less, the cane farmers will go to the other millers for better deals,” he warned.

Shitanda said MSC should zero rate transport levy just like it is the case with its rivals.

“Cane farmers will continue selling cane to rival millers who offer good prices. Contracting is a mutual agreement, which can only be kept if the terms are the best,” he said.

Last week, scores of people were injured following a fight between farmers and employees contracted to West Kenya and Mumias Sugar Company employees. The incident happened at Shibale when alleged irate farmers hurled stones at tractors transporting cane to West
Kenya.

The “angry farmers” accused West Kenya of diverting cane belonging to MSC and barricaded the road.

 Armed police officers who were escorting the seven trucks were forced to shoot in the air to disperse  the crowd and called for reinforcement.

Mumias Sugar’s Managing Director Peter Kebati told The County Weekly: “We provided farm inputs to cane farmers. We cannot recover that money if harvested cane is diverted to another mill.”

Mr Kebati noted that MSC invested Sh2.5 billion in the development of cane in four counties; Siaya, Bungoma, Busia and Kakamega.

The mill has contracted 117,000 farmers with 64, 000 hectares of land under cane. The MD said they have invested Sh 540million on cane development on 23,000 hectares of land and contracted 25,000 farmers in Busia County.

He noted that MSC stands to lose Sh8 billion annually as a result of cane “stealing” from contracted farmers. However Mr Olendo disagreed, arguing that they are getting cane from private farmers too.

Ordered arrest

Western Province Commissioner (PC) James Ole Seriani has now issued a stern warning to the millers that they will not tolerate hooliganism and ordered the arrest of those involved in the vice.

“The aggrieved millers know the procedure to follow. They should not attack, impound and take cane they suspect to belong to them. They should instead report the matter to the nearest police station,” said the PC.

In Southern Nyanza, the establishment of Trans Mara Sugar Company and Sukari in Ndhiwa district has rattled the State-owned Sony sugar in Rongo district which has hitherto been the sole miller in the region.

The millers have traded accusations over cane poaching. Sony has accused the new factories for failing to establish their own raw material and instead relying on what Sony had long invested in.

The management of Sony say the new companies had no nucleus estates and relied on cane it had already developed.

 Sony’s Managing Director Paul Odola say the miller has lost more than Sh100 million due to the ongoing cane poaching by its neighbours.

“For the last one year, we have lost 78 hectares of sugarcane to rival millers and another 21 hectares to local jaggery manufacturers,” said Odola.

He said the two rival millers have been directly targeting its contracted farmers hence denying the miller its sugarcane, leading to big losses due to credit and input investment given to the farmers.

Trans Mara Sugar Company and Sukari opened shop last year and were yet to establish base in terms of sugarcane production capacity to enable a sustainable crushing operation.

Turned chaotic

The management of the three millers have been employing the services of the police to protect their interests, a move which has a times turned chaotic.

Recently, officials from Sony accompanied by security officers impounded four tractors belonging to Trans Mara Sugar and seized 64 tons of sugarcane, claiming their cane had been illegally harvested.

During the incident at Keyian in Trans Mara West district, truck drivers from the Trans Mara Sugar Company were ordered to drive to the Awendo-based Sony where the tractors were detained.

Trans Mara Sugar Company Operations officer, Arun Anand said the tractors were released a few days later after the Sugar Arbitration Tribunal issued a court order to that effect.

However, Mr Anand said its competitors declined to release the cane they had seized claiming they had already crushed it.