Sugar companies face frustrations amid revival bid

Court cases, debts, lack of political goodwill and competing interests among sugar millers conspire to delay the revival of the collapsed sugar sector, resulting in a long, tortuous wait by farmers from the western Kenya's sugar belt.

Desperate farmers now want the Agriculture Cabinet Secretary and other stakeholders in the sector to come out strongly on the way forward on leasing of the five State-owned sugar mills, which has experienced numerous litigation and interference from politicians in the region.

There have been discussions involving the national government and a group of politicians from the Lake region that are now in the final stages with the aim of coming up with a strategy to circumvent the court processes standing in the way of the leasing process.

July 2020

The five factories that have been put up for leasing are Chemelil, Muhoroni, Miwani, Sony and Nzoia.

The leasing was advertised in July 2020 through the Agriculture and Food Authority, with the period for leasing put at 20 years.

Several millers, including two firms linked to tycoon Jaswant Rai – West Sugar Company and Sukari Industries – are among 29 investors eyeing lease deals for the five factories.

However, more than three court cases have stalled the move with farmers and other stakeholders pointing an accusing finger at some millers and organisations for delaying the process, while also accusing them of colluding with politicians to frustrate development.

Farmers are now calling for an end to the stalemate that has gone on for months so that they do not suffer any further.

'Vested interests'

Noah Opiyo, the secretary of the Muhoroni branch of the Kenya National Federation of Sugarcane Farmers, feels the CS should not be cowed by the litigations in court.

“We are foreseeing a scenario where the leasing process will be delayed by vested interests. We would want the government to continue with the implementable reforms which have already been put in place,” said Mr Opiyo.

Some of the reforms include bringing back the Kenya Sugar Board, formalising the waiver of debts by farmers and factories on the defunct sugar board and AFC, among others.

Mr Opiyo wants the CS to rename the board members and withdraw the notice he gave to millers barring them from employing staff and procuring spares.

“We want the ministry to consider giving the factories some money for maintenance, the factories are on the healthy path of recovery and a little support from the government will boost them a great deal,” said Mr Opiyo.

Out-of-court settlement

Richard Ogendo, the secretary-general of the Kenya Sugarcane Growers Association, shares Mr Opiyo's sentiments. He told the Nation that Kenya National Federation of Sugarcane Farmers also took the Agriculture CS to court over the regulations.

However, he said that they are looking at an out-of-court settlement so that sugarcane farmers can enjoy the benefits that tea farmers currently enjoy after passing of tea laws.

Mr Ogendo said Mr Munya is in negotiations with the sugar plantation workers’ union to move the cases from court to enable the process move forward.

“We farmers have no problem with the leasing as we fully understand the benefits. However, there are reports that the government will hand over the factories to the counties they are located in should the stalemate persist,” said Mr Ogendo.

He urged all parties in court to come to the table and come up with mutual understanding to prevent further disagreements.

Losing patience

In November of last year, Mr Munya’s frustration on the woes standing in the way of the leasing process was evident and it appeared he was losing patience with the numerous cases.

In an interview then, the Agriculture CS expressed displeasure with the court cases, saying the factories cannot be run by the government.

“We have challenges because of certain vested interests who enjoy the situation as it is at the expense of the farmers who are frustrated because these people are blocking their dreams,” said Mr Munya.

The move, he says, was to increase competition, attract investments in the sector and also give farmers alternative choices where they can deliver their cane.

“We are currently looking at ways and means in which we can circumvent the court process. We are in discussions having met leaders and other stakeholders from the sugar belt to chart the way forward,” said Mr Munya.

Suspended process

In August, Industrial Court Judge Nduma Nderi suspended the process of leasing the millers following a successful petition filed by the Kenya Union of Sugar Plantation and Allied Workers.

Through its secretary-general, Francis Wangara, the union claimed to have been left out in the entire process. He has since been included in the committee overseeing leasing of the State-owned millers.

In September, a company in Kisumu went to court laying claim to the controversial 10,000-acre parcel of land that Miwani Sugar Company sits on. 

In October, High Court Judge S.M. Githinji, sitting in Eldoret, ordered a temporary stoppage of the process pending the hearing and determination of a petition filed by five farmers and 45 others under the umbrella of Nandi County Sugarcane farmers who are opposing the planned privatisation of the sugar mills.

Apart from the court cases, the Senate has also called for the halting of the process until thorough public participation is undertaken to iron out fears surrounding the move. They claim the process is being run by “tenderpreneurs”.