KSB warns sugar firms on brink of collapse

By Jane Cherotich

The Kenya Sugar Board (KSB) has warned over a looming raw material crisis that could lead to collapse of sugar milling firms and by extension the sugar industry.

KSB Director Billy Wanjala reiterated that already Mumias Sugar Company, a market leader in sugar production, has slowed down operations following the problem expected to worsen. This is due to the scramble of the little available crops by rival sugar firms.

Speaking to The Standard, he added that sugar firms were reluctant to borrow loans from the industry regulator that is meant to develop sugarcane, following rife cases of cane theft that have hit hard millers mainly from Kakamega and Bungoma counties.

Mr Wanjala further said the industry regulator was currently working on an information technology project that will make available valuable information about all sugarcane farmers to make the money recovery process relatively easier.

Incur losses

The situation has, however, been aggravated by the fear to lend sugarcane development funds to farmers directly due to fear of incurring losses.

“KSB does not want to risk giving out the money without ascertaining the ability of growers to repay the money in stipulated period,” disclosed Wanjala.

 Exploitation

He said the new system will ensure that farmers can repay their loans through a check-off system regardless of which miller has bought the farmer’s crop in a bid to protect both sugar firms and the growers from exploitation and ensure KSB recovers funds lend out.

“The board had plans to exploit areas such as Trans Mara and other viable areas to forestall perennial cane shortage problems but the Ministry of Agriculture would not let KSB fund the project without attaching strings,” disclosed the official.

He further said the board has been unable to intervene and help address the cane shortage problem because the Government has refused to give the industry regulator the green light to implement its projects.

Undue harvesting

Wanjala challenged stakeholders to start addressing the issue “because millers have started harvesting under age crops because mature ones have long been cleared in the fields, pointing at the bleak future the industry is facing”.

He took issue with millers for the laid back attitude in investing in sugarcane development and urged Agriculture Finance Corporation to review the conditions for lending funds to individual farmers to enable many of them borrow money.

Several millers have started delaying payments following a slump in operations as a result of declining production of raw materials in Western Kenya.