The clash between sugar cane farmers and KAM exposes a deepening tension over who should bear the cost of sustaining Kenya’s struggling sugar industry. Farmers view the four per cent levy as a lifeline for cane development and factory rehabilitation, while manufacturers frame it as a barrier to competitiveness. By seeking exemptions, KAM appears to prioritise industrial profit margins over sector-wide recovery, reviving fears of past policies that weakened the SDL and hurt growers. With cane shortages still acute, any dilution of the levy risks undermining reform momentum. Parliament’s response will signal whose interests ultimately carry more weight.
Sugar cane
farmers have rejected a proposal by the Kenya Association of
Manufacturers seeking to exempt exporters and manufacturers
importing white refined industrial sugar from paying the four per cent Sugar
Development Levy.
In a statement through the Sugar
Campaign for Change (Sucam), farmers described the proposal as “misguided,
legally unfounded, and harmful” to ongoing reforms, warning that it would
weaken the sector and threaten thousands of livelihoods.
Sucam coordinator Michael Arum said
KAM is free to pursue its members’ interests, but insisted the proposal lacks
legal basis and poses serious economic risks to the sugar industry and
smallholder farmers.
Arum said the Sugar Act, 2024, is explicit on the application of the levy, with no room for exemptions.
“Section 40 of the Act requires a
levy on domestic sugar and an equivalent four per cent of the CIF value on
imported sugar. There is no provision for exempting exporters or industrial
users,” he said.
Farmers argue that KAM’s latest push
mirrors efforts seen in 2006 and 2007, when exemptions and a reduction of the
levy from 7 per cent to 4 per cent were introduced.
According to Sucam, those changes
neither lowered retail prices of sugar-based products nor benefited consumers, and they did not improve farmer welfare. Instead, they depleted the SDL fund
and crippled cane development programmes.
Sucam said earlier calls to
slash the levy from four per cent to two per cent also originated from similar
commercial interests, despite cane shortages being the industry’s biggest
challenge.
The group said such proposals do
little to improve competitiveness and instead deprive the sector of essential
financing for cane development, factory upgrades and long-term reforms.
“Reducing or scrapping the levy only
benefits a small group of industrial players at the expense of thousands of
poor farmers,” Arum said, warning that weakening the SDL would destabilise the
economic backbone of the sugar belt.
Farmers are now urging Parliament,
policymakers and the Ministry of Agriculture to reject KAM’s proposal and
safeguard the future of the sugar industry.
Sucam maintains that the SDL remains
the most reliable and predictable source of funding for industry recovery and
sustainable growth.
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