SWEET NEWS

Sugar farmers welcome Comesa's two-year safeguard extension

Safeguard increases wealth at all levels of the sugar value chain; Munya's reforms praised.

In Summary

• The Comesa safeguard becomes critical in increasing the proportion of Kenya’s production of own sugar with which to trade with increased return to all.

• Cane growers will get good prices, mill owners good profits, while the government will collect additional taxes.

Sugar farmers lobby welcome Comesa's two-year safeguard extension/
SWEET: Sugar farmers lobby welcome Comesa's two-year safeguard extension/
Image: star

Following the 41st meeting (virtual) of the Comesa Council of Ministers held on November 26, a resolution was made to grant Kenya a two-year extension of the sugar safeguard.

It will run from March 2021 to February 2023. The current one lapses February 2021.

In that regard, the Kenya National Alliance of Sugarcane Farmers Organisation (KNASFO) salutes Comesa,and in particular Agriculture CS Peter Munya and his team. They have steadfastly focused on  ways and means of revamping the sugar subsector.

The Sugar Directorate says, Kenya’s annual production base of 440,935 tons of sugar is against a demand of 1,039,717 tons.

The Comesa safeguard becomes critical in increasing the proportion of Kenya’s production of its own sugar with which to trade with increased return to all.

Cane growers will get good prices, mill owners good profits, while the government will collect additional taxes.

KNASFO believes the safeguard increases wealth at all levels of the sugar value chain. CS Munya’s reform agenda includes the announcement and gazettement of Sugar Imports, Exports and By-Products Regulations, 2020, and The Crops Sugar General Regulations 2020 and the leasing of the state-owned sugar mills.

KNASFO calls upon all stakeholders to rally behind the CS to improve the fortunes of a potentially prosperous industry with vast possibilities of curbing poverty in the sugar belt.

The safeguard should see the sugar industry transition with a diversified multi-product base in energy (cogeneration and ethanol), distillery (ethanol), paper and fertiliser, among others.

This will improve revenue-earning streams, thus more income to the stakeholders along the value chain. Additionally, the industry should move to a quality payment system away from the current weight-based system.

This will result in efficiency at the field and mill levels, otherwise, engaged parties get penalised in reduced income earnings. The payment system goes hand in hand with enhancing and release of high sucrose, early-maturing cane varieties.

Then there is the long-standing issue of privatisation of state-owned sugar mills. The Long Term Lease Model, otherwise called Transfer of Right of Use, to private entity should be completed this time round.

This will release and ease off government holdings to entrepreneurs and save government tax to be redirected to more befitting social ventures.

Bagging all these measures is governance. Once the entire sugar subsector is on private enterprise mode, the primary stakeholders being farmers and millers must of necessity seize the opportunity to self-govern themselves in their own best interests.

This will save the industry from bureaucratic tentacles geared towards reaping where they did not sow. As KNASFO, we believe this is the ultimate prize of the Comesa sugar safeguard.

Saulo Busolo is chairman of the Kenya National Alliance of Sugarcane Farmers Organisations