The government will zone sugarcane growing areas and merge poor-performing State-owned millers if radical proposals by the national sugar task force are endorsed.
In what is likely to jolt the sector, sugar factories will now be barred from buying cane outside their licensed zones.
These are some of the recommendations contained in the task force report seen by The Standard yesterday.
The report also recommends the return of the Kenya Sugar Board and reinstatement of Sugar Development Levy.
SEE ALSO :Ex-sugar board CEO buried in Tanzania
The report was compiled after the task force, appointed following a directive by President Uhuru Kenyatta, collected views from the sugar-growing regions across the country.
In the recommendations likely to stir a hot debate, the task force members recommended that all the three sugar factories in the Nyando sugar belt – Chemelil, Muhoroni, and Miwani – be merged.
Of the three, only Muhoroni which has been in receivership since 2000 is operating at low capacity. Miwani shut over 20 years ago and only exists in name while Chemelil stopped milling over eight months ago due to a lack of service and money to pay workers and farmers.
The report says the proposed merger will help optimise sugar production to meet national demand, with a surplus for export. A merger will also improve sugarcane production and optimise income for cane farmers.
Part of the task force recommendations seeks to bar private millers from poaching cane from regions outside their areas of operation.
The return of zoning means that the State-owned millers, which own nucleus estates with large swathes of land, will benefit hugely.
There have been protracted battles between private-owned mills and the State-owned mills in the past over raw materials.
Managers of some State-owned millers, who spoke on condition of, anonymity claimed zoning rule would reduce poaching, which has led to the near-collapse of the industry.
Some private millers buy cane from as far as Transmara in Rift Valley to Homa Bay, Migori to Ndhiwa and even Chemelil to Kakamega.
These are some of the reviewed measures that forced the task force to recommend the latest radical steps that are likely to jolt operations of private millers.
Other proposals include bringing back the Sugar Development Levy (SDL), which former Treasury Cabinet Secretary Henry Rotich removed in the last financial year.
Removal of SDL, charged at four per cent of the value of sugar, was a proposal from stakeholders and agriculture ministry, with the aim of raising revenue for farmers.
The report also recommends the creation of a pricing committee that shall from time to time review the pricing of sugar as dictated by market dynamics.
The committee shall comprise Kenya Sugar Millers Association, Kenya Sugarcane Farmers Union and the yet-to-be-introduced Kenya Sugar Board Directors.
Yesterday, some cane farmers protested the re-introduction of cane zoning.
Kenya National Alliance of Sugarcane Farmers Chairman and former MP Saul Busolo wondered why their proposals were not considered.
Kenya Sugarcane and Allied Products and the Kenya Sugarcane Growers Association Chairman Mr Charles Atyang also said the report fell short of their demands.
Do not miss out on the latest news. Join the Standard Digital Telegram channel HERE.