Refining the Kenyan sugar industry

The story of the sugar industry in Kenya has not been sweet. Poor pay, delayed payments, mismanagement and corruption have characterised the industry. With a new sugar strategy in place for 2004-09, however, the sector has started showing signs of recovery.

credit: James K Chege

British settlers established the first sugar mill in 1922, but the industry has recorded minimal growth for the past half century due to political interference and dilapidated infrastructure in sugarcane-growing areas. Many farmers have abandoned the crop, and cane production in the southeast of the country, near the coast, collapsed early in the 1980s. Today, sugarcane is grown mainly in four districts of western Kenya: Nyando, South Nyanza, Mumias and Busia. The area under cane is currently over 120,000 hectares, annually producing 400,000-500,000 tonnes. Almost half of this is produced on smallholdings whilst the remainder comes from large plantations.

Domestic demand for sugar is 600,000 tonnes, which leaves a deficit of up to 200,000 tonnes that is met by imports from regional sugar producers. In East Africa, sugar production is high. Tanzania, Mauritius and Sudan are the key competitors with Kenya, and new producers like Uganda and Malawi are now challenging the country's fragile sugar industry. In addition, increased regional trade and the opening up of borders to allow sugar imports from both the East African Community and the Common Market for Eastern and Southern Africa (COMESA) have hurt Kenyan sugar producers.

A bitter-sweet struggle

Sugar management is the responsibility of the Kenya Sugar Board, which regulates, develops and promotes the sector. To revive the industry and meet the challenges of increasing globalisation, the Kenyan government and the COMESA secretariat negotiated a four-year, nonrenewable extension to the existing import quota of 200,000 tonnes. The country continues to argue that the Kenyan sugar industry should be given special protection, as it is not as developed as those of its neighbours. However, the special protection plan is due to end in 2007, and Kenya will not be granted a further extension.

When the current government came into power in January 2003, it promised to revamp agriculture and pay special attention to sugarcane farming. President Mwai Kibaki took up this challenge by mandating sugar stakeholders to develop a 'Marshall Plan' to put the sugar industry back on track. The result is a Kenyan sugar industry strategy paper for 2004-09 that outlines the government's plan to develop the sugar industry by seeking new markets, generating novel uses for sugarcane and its by-products, researching better cane varieties, opening new factories, and developing infrastructure in sugarcane-growing areas.

According to Agriculture Minister Kipruto Arap Kirwa, the strategy paper aims to help the Kenyan sugar industry attain global competitiveness. "The successful implementation of this plan will invariably spur the industry's sustainable growth and increase its overall contribution to the wider national economy," Kirwa states. The industry has already started showing signs of recovery, with farmers receiving timely payment for sugarcane delivered to factories. This has led to an increase in overall cane production.

In addition, the government has resolved to reschedule debts owed by farmers totalling 4.7 billion Kenyan shillings (US$60 million). The debts have arisen from development loans that sugarcane farmers received from the Kenya Sugar Development Fund. The Ministry of Agriculture has also moved to increase production by searching for other areas suitable for growing sugarcane. The Kenya Sugar Research Foundation reports that sugarcane can be produced under irrigation in areas along the country's biggest river, the Tana in eastern Kenya. The opening up of these new sugarcane-production areas is expected to allow Kenyan producers to meet domestic demand and produce a surplus for export.

Kenya's Planning and National Development Minister Anyang' Nyong'o and his counterpart in the Ministry of Trade and Industry, Mukhisa Kituyi, laud the new measures to revamp the sugar industry, saying this is a key activity likely to reduce poverty in the cane-growing areas.

The ministers, both of whom represent cane-producing areas, say research should be encouraged to generate alternative uses for sugarcane including power generation, fuel ethanol and biofertilisers. Farmers in the growing areas are excited at the prospect of the industry becoming productive again. Many view the current initiative as the boldest step so far taken by any administration to invigorate sugarcane production, which has languished in the doldrums for too long.

Article by James K. Chege