10 May 2002

Kenya: Amendments to Sugar Act Bad for Farmers


The envisaged changes in governance of the sugar industry have occasioned serious conflicts over the constitution of the Kenya Sugar Board (KSB) between millers and cane farmers.

Farmers are defending their seven seats won through amendments made to the Sugar Bill, 2001 on December 11, 2001 in Parliament. Millers are on the offensive to scuttle that amendment and restore the original four using the executive.

Indeed, right from the President's assent to the Sugar Bill on December 31, 2001, salvos against the Bill were fired instantly by the Mumias Sugar Company's chief executive officer to the effect that his mill would ignore the Act. Millers, stunned by the victory of sugarcane farmers to control the KSB quickly reorganised themselves.

Their document Summary of the Proposals Obtained from the Industry, contains 74 amendments to the Sugar Act 2001. The objective is to revise the Act in its entirety, in particular, by cutting the number of farmers on the board to four.

The Ministry of Agriculture on the other hand, got in a quandary and equally opposed to the very farmers in whose name it is so-called, responded to the unfolding scenario by commencing the Act on schedule but through a sleight of hand at the eleventh hour.

In what could well be the minister's refuge in the President's constitutional right to hire and fire as well as create and abolish offices, the Ministry of Agriculture abdicated its responsibilities to the Office of the President, contrary to the Sugar Act.

In the Kenya Gazette of March 28, the President appointed the members of the defunct Kenya Sugar Authority as transitional members of the Kenya Sugar Board under the State Corporation Act for April 1, 2002 to May 31.

Their aim is to oversee the electoral process of the new board Members. Farmers were not consulted.

However, in the wake of the commencement of the Sugar Act, farmers demanded its immediate enforcement.

The Minister of Agriculture responded in a ministerial state- ment on implementation of the Sugar Act, 2000 on April 4. He pleaded with MP that "the commencement of the Act on April 1, did not mean immediate enforcement of the provisions relating to the Sugar industry agreements referred to in section 29 of the Act and the second schedule because the agreements have to be negotiated by the parties.

The co-ordinator of the said parties is the Kenya Sugar Board whose constitution the Minister assured Parliament was on course vide legal Notice NO. 48 of March 27, through which the Sugar (Elections) Regulations, effective from April 1.

But in what amounts to abuse of ministerial prerogative and in the midst of electioneering in the sugar belt for the KSB, the Minister of Agriculture on April 23 published The Sugar (Ame- ndment) Bill 2002, for introduction in Parliament.

The intention is to reduce the number of farmer representatives from seven to four as demanded by millers who in fact are the government-owned sugar factory management and their civil service-based board of directors.

These are struggles within government as well as pressure by the likes of Booker Tate through their lobbyist, the East African Association.

Struggles over slots on the KSB bring to mind the political and emotive character of sugarcane. It is the most political of all commodities on account of its pleasurable and cheap energy attributes.

In Kenya, an inter-ministerial team consisting of the Permanent Secretary, Treasury and his Agriculture counterpart, the director of agriculture, the commissioner for co-operatives, the Attorney-General, and the sugar factory management have been running the industry.

They employed civil service bureaucrats to administering the sugar sub- sector. Organised as a sugarocracy, the civil servants as directors of various government- owned sugar mills piled up fortunes while impoverishing peasants.

Under their care, Miwani and Muhoroni went under, Nzoia is technically bankrupt, Sony limps on. Only Chemelil and Mumias remain as cash cows.

Under state bureaucratic administration, the proportion of proceeds from the sale of the cane crop taken up by sugar factories, out-grower firms or co-operatives and the government have always been larger than that paid to farmers.

Nzoia sugar company zone farmers, for example, pay Nzoia out-growers company one per cent capital levy, four per cent, administrative fees for Kenya Sugar Board (previously Kenya Sugar Authority) loans of which they are charged 17 per cent interest and 15 per cent retention fund.

Add to these levies, 18 per cent value added tax, seven per cent sugar development levy, two per cent presumptive income tax and one per cent cess to local authorities.

Arising from this surplus extraction is the fact that little of it is used to modernise the sugar industry. There exists more accumulated technology in the world for increasing efficient sugar productivity, but little has percolated down to Kenya.

The sugarocracy's long administrative incompetence and disorganisation of sugar production coupled with a bureau- cratic fear of creative imagination and decisions in the sugar industry has obstructed the development of the sector.

Save for agrarian reform to intensify diversity in the sugar economy, sugar grown on a grand scale in western Kenya will continue to spread its blight on a grand scale with rural unemployment and poverty as the region's permanent guests.

The industry, used by the sugarocracy for underdevelopment, can, however, be turned into an instrument of development.

That means the construction of new factories such as those planned for Busia and Trans-Mara; the modernisation of old ones like Miwani and Muhoroni, the application of technology in selection of plant variety, control of pests, weeds; the expan- sion and modernisation of allied services such as transportation, storage, distributive facilities, and bulk loading.

The Sugar Act, 2001 entails all these. It must be defended from bureaucratic obstructions.

Sugarcane in Kenya neither counts as a food crop nor export crop. In contrast coffee, tea, maize, wheat, milk, beef and horticulture are classified as such. Consequently these commodities attract more concern by the State.

Since sugar counts as neither, attention to it can only be on account of farmers dispropor- tionate force upon government.

The writer is a former MP for Webuye, and lecturer at the United States International University, Nairobi.

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