Pro­posal to set cane prices, pun­ish rogue millers wel­come

Daily Nation (Kenya) - - SEEDS OF GOLD - BY NEL­SON MAINA sat­na­­tion­

THAT EX­OR­BI­TANT sugar prices have left a bit­ter taste in the mouths of many con­sumers is an open se­cret. And for thou­sands of cane farm­ers across the coun­try, the ex­pe­ri­ence is even more har­row­ing, char­ac­terised by late pay­ments, threats of cheap sugar im­ports and even lack of agri­cul­tural in­puts.

Fix­ing these ba­sics could ac­tu­ally be a ma­jor leap in ad­dress­ing our peren­nial short­age once and for all.

With farm­ers pro­duc­ing an av­er­age 700,000 tonnes against a de­mand of 900,000, the coun­try has re­sorted to im­ports to sate the bur­geon­ing de­mand.

How­ever, even with the im­ports, pro­jec­tions are that the deficit keeps grow­ing, with de­mand ex­pected to now hit the one mil­lion tonne mark as pro­duc­tion dips to about 500,000 tonnes in what is at­trib­uted to pro­longed drought and a sec­tion of millers op­er­at­ing be­low ca­pac­ity.

Pro­duc­tion costs, on the other hand, are the most pro­hib­i­tive, with Sh128,860 ($1,260) re­quired to pro­duce one tonne of sugar, the high­est in the re­gion and more than dou­ble the global av­er­age of $600.

The re­sult is that ma­chines that once roared crush­ing cane have grinded to a halt, bring­ing with them mis­ery among millers and farm­ers as gov­ern­ment now in­creas­ingly looks to the Comesa con­trolled cheap sugar im­ports to plug the bit­ing short­age as de­mand grows by the day.

The blame game has only ex­ac­er­bated the short­age. Millers have con­stantly blamed the gov­ern­ment for pay­ing lip ser­vice to the lo­cal in­dus­try by giv­ing sub­si­dies, which they claim do lit­tle to help them, while at the same time open­ing its bor­ders to cheap im­ports.

Farm­ers, on the other hand, have ac­cused millers of bla­tantly flout­ing their con­trac­tual agree­ments by pay­ing them late with some pay­ments run­ning into months with­out be­ing hon­oured.

Farm­ers who have agree­ments with millers have, there­fore, re­sorted to sell­ing their cane to ri­vals who pay them in cash, even if it means sell­ing for a song. In fact one of the largest millers in Kenya had at one time to stop op­er­a­tions af­ter farm­ers de­cided to take their cane to a ri­val protest­ing de­layed pay­ments.

Out of des­per­a­tion farm­ers have up­rooted cane, frag­mented land into small­hold­ings and even moved to other crops like maize.

All farm­ers want is to grow cane, de­liver in plenty, and get paid well and on time.

The con­certed ef­forts by gov­ern­ment to look for vi­able ways to im­port sugar on the premise that as a coun­try we can­not pro­duce enough should be done away with.

What we need are rad­i­cal poli­cies on tight­en­ing loop­holes across the value chain and com­ing up with ir­re­sistible in­cen­tives that ev­ery sin­gle farmer will not hes­i­tate to join sugar pro­duc­tion.

Pro­pos­als to have gov­ern­ment set up the min­i­mum price that cane farm­ers can earn and spell out penal­ties millers who flout con­trac­tual agree­ment face are a wel­come re­lief.

There is also need to in­tro­duce new su­pe­rior cane va­ri­eties that have high su­crose con­tent, so that the coun­try moves from pric­ing model based on weight of cane de­liv­ered.

Sugar is as po­lit­i­cal as it is an emo­tive crop. Like maize, it calls for rad­i­cal strate­gies backed by a strong po­lit­i­cal will to thrive.

Kenya can be a sugar sup­ply sta­tion com­fort­ably meet­ing its lo­cal de­mand, sell­ing the sur­plus and com­pet­ing with regional and in­ter­na­tional peers. But we must get our ba­sics right.


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