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Kibaki should intervene in sugar war

By | October 21st 2010

By Okech Kendo

It is also not always true that the grass should suffer every time elephants stampede. It is possible to tame the bulls so that the grass enjoys the benefits of fair competition.

The Zain-Safaricom-Yu market contest has resulted in reasonable savings in reduced mobile telephony charges for consumers. A saving of Sh5 per call could mean a packet of milk for breakfast.

Now, the clash of two sugar millers in Western Province should not lead to the suffering of farmers. Farmers are crying for better prices for their sugar cane, and jobs for their children. Consumers are looking for relatively lower priced sugar. Industrial suppliers are looking for opportunities in the stifled sugar sector. It is an investment with a huge multiplier effect on the village and national economy.

Someone must therefore speak for the grass, and no one is better placed to do so for the voiceless in the latest battle of sugar millers than President Kibaki.

Archaic law

The President should intervene for two reasons: First, because he laid the foundation for Butali Sugar Factory in December 2007, after due diligence showed the two plants — West Kenya and Butali — can viably co-exist in the zone, even though they are about 20km from each other.

It is not enough to argue entirely that a sugar factory should not be within the 40-km radius of each other. This is archaic law, which should not rationalise monopoly in the age of free market economics.

The viability of the two plants is covered in an industry task force report that preceded the arrival of the second miller in this sugar belt in 2004, when a construction licence was granted.

West Kenya was expected to concentrate in Kakamega Municipality, and the southern edge of Malava Forest. Butali would explore the northern tip of Malava Forest, Nandi, and Lugari.

This area, part of the vast western sugar belt, still has great potential even for more factories. Miwani, Muhoroni, Kibos and Chemelil sugar mills, which are about ten kilometres of each other, have shared out their sugarcane zone for years.

The beneficiaries are farmers who get better prices for their cane deliveries.

When complete the Sony Sugar belt in South Nyanza shall have to share its zone with Trans Mara Sugar and Sukari Industries, which is coming up in Ndhiwa, Homa Bay District.

The other reason Kibaki should intervene is to protect a multi-billion-shilling investment. Attracting more investors to a rural setting that needs more employment opportunities for the youth is a critical pillar of Vision 2030. The vision expects Kenya to be an industrialised, middle-income economy in the next 20 years.

The dream is not possible when the software of the 2030 economy, labour, is caught in the vortex of insecurity because of unemployment. After six years of massive capital outlay, with about Sh3 billion— largely credit and investment grants — thrown into the project, the debate should be about maximising the potential of the sugar belt, rather than demand that one factory be demolished for the other to thrive.

Greater clarity

The Government, the Ministry of Agriculture, and Kenya Sugar Board that authorised these investments were not sleeping on the job. It is, therefore, not in the public interest for some Government officials to claim Butali is invading West Kenya’s sugar cane market.

Farmers deserve a choice, and the more the merrier. It is their interests that should compel the President to intervene to reassure investors that the Government is still championing the policy of job creation in rural areas.

Butali is already a massive employer: It represents fair competition that would benefit wananchi through direct employment and better sugar cane prices.

Figures send this message with greater clarity: Butali has registered 25,000 farmers, of which 5,000 are contracted. The firm has hired 1,000 people, 600 of them are on permanent terms. The beneficiaries of the investment have their dependants and suppliers.

The actual beneficiaries, directly or otherwise, count in hundreds of thousands of wananchi who have a right to a livelihood. They are not just citizens from Malava MP Soita Shitanda’s constituency, home of Butali. The gains have spread beyond Malava, to Webuye, Lugari, Uasin Gishu, and Nandi Hills.

Vested interests

The benefits have rolled in wananchi from four counties in Western and Rift Valley provinces. The interests of these people override the stakes and takes of briefcase rent-seekers, who are sucked into the turf war.

The beneficiaries of the Butali capital were on the periphery of the sugar economy. Now that they are in, they better stay there to make a livelihood.

The clash over zone is monopoly, which contradicts free market logic. It is unconstitutional to insist that because I was the first to install a kiosk here, there shouldn’t be another in the neighbourhood.

The Government, Kenya Sugar Board, and Government officials caught in this cocktail of vested interests should respect the public interest.

The interests of powerful individuals in the Ministry of Agriculture, Kenya Sugar Board and the Executive should not supercede the imperatives of job creation and food security.

The writer is The Standard’s Managing Editor Quality and Production.

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