- The government has proposed to write off Sh100 billion debts owed by sugarcane farmers.
- Sugar production in the country has been on the decline since the 1980s when production stood at 401,239 metric tonnes against a demand of 299,514.
Image: KNA
Mukurwe-ini MP John Kaguchia has backed the Sugar Bill, 2022, saying it will address the challenges facing the ailing sector.
Speaking on Thursday on the Citizen TV Breakfast Show, the lawmaker told off those opposing the bill and vowed to fully support its enactment as it is a game changer for sugar farmers and consumers.
He also defended the introduction of taxation on white sugar imports to encourage local production of the product and boost supply.
“One of the things the government has done is to introduce various taxation targets to discourage imports and then introduce other aspects to encourage production. The government has passed the Sugar Act and various aspects to encourage farmers to increase production in this country," he said.
The government has proposed to write off Sh100 billion debts owed by sugarcane farmers.
The Sugar Bill, 2022 was recently passed by the National Assembly and is awaiting debate in the Senate through the Senate Standing Committee on Agriculture before it is assented by President Dr William Ruto.
The proposals contained in the bill include introduction of the Sugar Development Levy, reintroduction of the Kenya Sugar Board, establishment of the Sugar Arbitration Tribunal and the Kenya Sugar Research Training Institute, a sugarcane pricing committee as well as delineation of the sugar catchment area into five zones.
Sugar production in the country has been on the decline since the 1980s when production stood at 401,239 metric tonnes against a demand of 299,514, to the current production of 491,100 against a demand of 900,000.
This means the country must rely on imports to plug the deficit, with the Comesa market being the lead supplier at 282,000 MT, according to the Agriculture and Food Authority.
Kaguchia has also supported the government’s plan to levy withholding tax on agricultural products.
He said under the new arrangement farmers will also be winners as the state will provide subsidised farm inputs to farmers such as fertiliser and seeds that will eventually help boost their production and earnings.
The MP said farmers will be assured of better returns for their produce through the improvement of marketing strategies that will see them sell their produce at a profit.
“The Ministry of Agriculture is going to ensure the farmer can get better prices for their products. Even if the farmers were to be taxed, they would have taken home much more than what they would have taken before because the markets are guaranteed. We cannot continue to demonise the contribution of the public to the same structure that is going to support them and claim to be honest. We are not only dishonest but also highly hypocritical,” he stated.
Under the new proposal, farmers will be required to part with at least Sh5 for every Sh100 as withholding tax.
However, the proposed rate will not exceed five per cent of the value of the produce delivered to the cooperatives or other organised groups, according to the Treasury.