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SUCAM DOCUMENT: SUC07-NOV20-2001

The Sugar Campaign For Change

WHOSE SUGAR BILL

5 MILLION HOUSEHOLDS DEPEND ON SUGAR CANE FARMING

5 MILLION HOUSEHOLDS LIVE IN POVERTY

OVER 3 BILLION SHILLINGS IN TAXES CONTRIBUTED TO THE EXCHEQUER BY 5 MILLION HOUSEHOLDS

1.2 BILLION SHILLINGS OWED TO SUGARCANE FARMERS IN DELAYED PAYMENTS FOR THE LAST TWO YEARS

20 BILLION SHILLINGS RAISED BY THE SUGAR DEVELOPMENT LEVY IN THE LAST 9 YEARS. 2 FACTORIES HAEV COLLAPSED IN THE SAME PERIOD.

IN THE PROPOSED SUGAR BILL

12 SEATS WILL DECIDE THE FATE OF 5 MILLION HOUSEHOLDS

FARMERS WILL ONLY HAVE 4 SEATS IN THE PROPOSED KENYA SUGAR BOARD

QUORUM FOR THE KENYA SUGAR BOARD IS 7

THE KENYA SUGAR BOARD CAN CONSTITUTE QUORUM AND DECIDE THE FATE OF 5 MILLION HOUSEHOLDS WITHOUT FARMERS REPRESENTATION

WHOSE SUGAR BILL IS THIS?

WHERE IS THE FARMERS VOICE?

AMEND THE SUGAR BILL TO GIVE 5 MILLION HOUSEHOLDS EFFECTIVE REPRESENTATION IN THE PROPOSED SUGAR BOARD

PRESS STATEMENT APPEARED ON DAILY NATION AND EAST AFRICAN STANDARD ON 2OTH NOVEMBER, 2001

Detailed Press Statement:

Farmers Call for Amendment of the Sugar Bill

The sugarcane growers look forward to the enactment of the Sugar Bill as a basis of their empowerment and liberation from the present system of oppression and economic exploitation. However, the Bill has serious flaws that need to be addressed.

Farmers are not adequately represented on the proposed Kenya Sugar Board, the major decision making organ for sugar policy. Farmers have only 4 representatives on the proposed Board of 12, and the chairman of the Board is to be appointed by the minister. Since the quorum of the Board is 7, it can be constituted without farmers’ representatives! As the major stakeholders in the industry, farmers should be given majority representation (at least 6) on the Board, the chairman should be elected by the Board members and should preferably be a farmer.

The Bill envisages continued government control of the industry by giving a lot of powers to the minister. This defeats the purpose of the Bill, which is to give autonomy to the sub-sector.

The Bill does not spell out an effective governance structure at the factory level. At the moment, the sugar factories are run autocratically by the Managing Directors without consulting farmers. Establishment of Boards of Directors and Zonal Committees are absolute necessities for the proper management of the sugar industry.

The Bill is silent on the structure and management of the Sugar Development Levy, which is an important fund for the development of the sugar industry. The mismanagement of the fund is one of the reasons for the collapse of the sugar industry. It is curious that these sugar industry institutions which should be established by the Sugar Act are ostensibly missing from the Sugar Bill. Sugarcane growers want these institutions, the SDF and Zonal Committees institutionalized within the Bill.

The Bill is extremely weak on enforcement mechanisms and penalties for sugar importation offences as well as compliance issues. For instance, the proposed fine of Kshs. 500,000 is negligible for an importer who brings in, or diverts into the local market sugar worth Kshs. 100 million. It lacks effective instruments and policy on sugar importation, and the relevant safeguards for the industry from negative effects of globalization.

The Bill protects the Chief Executive Officer and officers of the Board from prosecution for the sins they have committed against the farmers. Such a protection would be a cover up for corruption and therefore should be rejected.

The Bill does not address mechanisms for solving the high cost of production occasioned by inflated costs of inputs and agricultural machinery imposed on farmers by the sugar policy organs. Nor does it address the development of infrastructure in the sugar producing zones, which is extremely critical for the growth of the sugar sub-sector.

The proposed Bill does not reflect the spirit of the post privatization era. Therefore, this puts investors in the recent Mumias IPO at a risk arising from arbitrary sugar imports and untaxed sugar by politically correct individuals.

A cane pricing committee comprising of stakeholders should be set up to determine the price of cane on the basis of the actual cost of production instead of relying on confusing hypothetical theories. Cane growers propose that for the time being, payments continue to be based on weight and that growers be paid 78% of the net proceeds plus 50% share of the byproducts.

This list is by no means conclusive. The change process is already underway and farmers are demanding for effective representation to protect their rights. Give farmers a voice in the new legislation.

SUCAM.

The Sugar Campaign For Change