Dear Peace Loving Kenyan,
Going by the elocution of the conscientious Agriculture Minister, he (the Minister) was looking forward to continuous fatuous smiles on the faces of the poor cane farmers in the country. The good Minister is ostensibly seeking to impress upon sugar millers to increase the farmers` pay per tonnage of harvested cane. However, cane farmers are more dispirited than ever before. Why? Because, much as they appreciate his supposedly good intentions, the minister`s actions are sadly betrayed by the verbal ironic twist therein. Farmers are beginning to wonder why the minister is not doing enough to protect the millers from the whims of sugar barons whose main intention is to cripple the millers and by extension the sugar cane farmers. How does the good minister expect the millers to pay farmers when they are constantly trying to keep off the gargantuan appetite of the sugar barons? And it is not only the sugar cane farmers that are affected by the sorry state of affairs. The consumers too have much more at stake.
This is because the country is continually being subjected to cleverly crafted schemes that bring forth cyclic sugar shortages as is evidenced by the synchronized closures of sugar factories for maintenance coupled with the sugar barons move to buy all the sugar stock and even pre pay for more stocks to be supplied when the millers resume production thereby ensuring that the millers will for a couple of months be producing sugar that is not released to the local market. In so doing, an artificial shortage of sugar is created. Behind this façade is the reasoning that the Government will consequently give a lee way to the sugar barons to import duty free sugar from the COMESA markets and retail it to the consumer at the same price as Kenyan sugar thereby raking in huge profits. In the mean time the huge COMESA sugar imports will have saturated the local market thereby blocking the normal demand of the local sugar in the country.
That is why it is commendable for KRA to reject Minister`s directive that sugar barons be allowed the importation of duty free sugar in the country. Millers have also thrown their full weight behind KRA`s decision. Ruto`s decision, I believe, never took into consideration the advice of the various stakeholders in the industry, and if he did consult, was he deliberately misadvise? If so, then one would be interested in asking why the Government seems to be unable or unwilling to bring sanity in this vital sub sector.
Part of the answer lies in the fact that it is not in the interest of the Government and Kenya Sugar Board (KSB) to lift the sugar industry from the morass it finds itself in. Some functionaries in the Government working in cohort with KSB are hell bent on forcing the Kenyan sugar industry on its knees through the destructive political economy that has seen corruption, mismanagement and lack of political goodwill in the country`s sugar sub-sector. KSB, to say the least, is either deliberately or otherwise, unable to bring sanity in this vital sub-sector.
This explains why there are no sound policies to restructure and revamp the sugar sub-sector in a bid to attract both local and foreign investment with the net result being sugar companies increasingly becoming either insolvent or going under receiverships and also eroding the investor confidence.
Last but not least is the fact that there is hardly anything in terms of research and infrastructure development financed by KSB; instead it (KSB) is embroiled in protracted and unnecessary tussles with many sugar companies. Numerous complaints abound in virtually all sugar factories of KSB `s failure to release monies in good time to finance their development activities. This has seen the Kenyan sugar increasingly become expensive to produce and chances of enhancing our sugar`s competitiveness in the regional and global market have all but gone up in smoke.
TOME FRANCIS,
BUMULA CONSTITUENCY.
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From: Francis Tome
Date: Wed, Sep 2, 2009 at 5:59 AM
Subject: WHO WILL COME IN THE AID OF THE AILING SUGAR INDUSTRY KENYA?
This sugar thing is very confusing.Why are the millers complaining and they are the ones creating a shortage by their “syncronized closures”.
The law of demand and supply says that whwen there is a higher demand for a commodity or a service and a lower supply of the commodity or service the prices go up.
However, it should be noted that the supply of sugar in world market has been hampered by drought in India, the second largest producer of sugar in the world after Brazil.This factor has led to tremendous prices increases in India and the international market because supply is less than demand.
countries like pakistan are also affected and there is rationing of sugar.
This is therefore, not entirely a Kenyan problem, i think the best thing is to look for solutions which in my opinion, does not lie with the government but the private sector.
let the government offload all their shares from these sugar companies to the public, stop manipulating the market and fight oligopolistic trade practises and price gouging.
There is a big market out there for our sugar only if we can get it right.