Home Agribusiness Kenyan Cane farmers welcome Sh1.5bn stimulus package for sugar sector

Kenyan Cane farmers welcome Sh1.5bn stimulus package for sugar sector


Cane farmers in Kenya have welcomed the allocation of Sh1.5 billion by the government to offset debts in a move to revive the sugar sector.

The Kenya Association of Sugar and Allied Products and the Kenya National Federation of Sugarcane Farmers said that the main challenge in the sector has always been the failure to implement the support program.

KASAP secretary-general Peter Odima said that initially, maintenance of sugar factories was done through the Sugar Development Levy (SDL) which collapsed with the disbandment of the then Kenya Sugar Board which operated the fund.

The functions that were carried out by the KSB were moved to the sugar directorate under the Agriculture and Food Authority that is domiciled in the Ministry of Agriculture.

“Since the money was deducted from sugarcane farmers’ earnings, the money was used to cater for both public and private millers. This one is coming from the government and we’re waiting to see how it will be implemented,” Odima said.

He said the government should institute an audit of the SDL to establish how much money was in the accounts when the fund went down and where the money went to.

“There were hundreds of millions in the SDL accounts but no one is telling us where the money went to. Someone is trying to sneak back the fund without telling farmers where money deducted from them went to,” he said.

“We want an audit to establish who embezzled the funds and those involved made to face the law.”

KNFSF national chairman Ibrahim Juma said farmers were happy although the package was little.

“On behalf of farmers, we want to thank the president. We want to believe that the money will rescue the sugar industry, particularly the state-owned mills,” he said.

Uhuru on Wednesday directed the National Treasury to set aside Sh1.5 billion to offset farmers’ arrears and other debts owed by state-owned sugar factories.

The move is part of the government’s efforts to stimulate the economy in the post-Covid-19 recovery plan. Uhuru spoke in Kirinyaga during Mashujaa Day celebrations.

Juma said that only private sugar millers were doing business at the moment because the state-owned have collapsed under the weight of huge debts.

President Kenyatta said the money will be used to pay farmers their arrears and maintenance of sugar factories.

The sugar sector is underperforming due to corruption and poor management.

On Wednesday, a lobby, Bunge la Haki na Usawa welcomed the government’s move but said the allocation was little.

“If it is an economic stimulus package, we expected something more than that because the sector is facing very many challenges,” the lobby chairman Boniface Manda, said.

Manda wondered what will happen to farmers contracted to troubled Mumias Sugar Company which is under receivership.