MPs propose new sugar levy to boost cane development, revitalise sector

The National Assembly’s Agriculture and Livestock Committee has called for the introduction of a 4% Sugar Development Levy to help bolster cane development and revitalize the country’s ailing sugar industry.

The National Assembly’s Committee of Agriculture and Livestock on Tuesday said that the decision was in response to concerns raised by farmers and sugarcane millers across the country and was also in line with efforts by the government to revive the sugar sector.

“We need substantial reforms to rescue our sugar industry from its current state of disarray and bring prosperity to both farmers and millers,” committee chairman John Mutunga said. 

Mutunga was speaking after the team held a series of meetings with stakeholders in the sugar sector, including representatives from the Agriculture and Food Authority (AFA) and the Sugar Directorate to discuss the Sugar Bill 2023.

Central to the discussion was the proposal by AFA to introduce a 4% Sugar Development Levy, which it said would provide much-needed support for cane development and the growth of the sugar sector.

The suggested distribution of the levy outlined ambitious allocations, including funds for cane development, research and training, sugar industry infrastructure, administration of board and strategic reserves, Outgrowers Associations, and factory rehabilitation and maintenance.

The lawmakers also called for the return of the Kenya Sugar Board as a regulator for the sector. They also want the Commodities Fund to oversee the management of the Sugar Development Levy. They said that this dual approach will help streamline operations and restore confidence in the industry.

The team said that after a series of extensive public participation across the country, the primary concern expressed by farmers and millers was the need for increased investment in cane research and development.

According to documents submitted by AFA, the local consumption of brown sugar is 900,000 metric tonnes, highlighting the importance of a thriving cane industry.

In a bid to boost local sugar production, legislators further proposed that the 25% for Sugar Development Levy be used in cane development and a further 25% for funding research into improved cane seed varieties and training.

“In order to protect the interests of farmers and millers against cane poaching, members of the National Assembly want stricter regulations, standardized contracts, and clear penalties for any violations,” Mutunga said. 

Currently, contracts between farmers and millers lack adequate penalties, making enforcement difficult. The proposed legislation aims to rectify this situation and curb predatory behavior by millers.

During the meeting, Committee members recommended the introduction of catchment areas, as suggested by the representatives of AFA, which will encourage cane development and deter cane poaching. 

The Committee also recommended an in depth geo-spatial survey of Kenya’s Sugar belt to cane growing areas and determine the number of millers per area to ensure long- term sustainability. 

They also emphasized the necessity of robust regulation within the sugar sector to avoid mismanagement and misuse of funds, as observed during the tenure of the defunct Sugar Board.