Egocentrism puts the sugar industry on its death bed
05 November 2013, 14:12
Nairobi - Come 2014, cheap sugar import is expected to start flooding Kenya's market. This is giving local producers sleepless nights.
Producing sugar in Kenya is more expensive than in her neighbouring Sudan, Uganda and even Tanzania. Perhaps this why the largest sugar producer in the country, Mumias Sugar company, has decided to diversify to products such as bottled water and electricity. They also have plans to open a distillation plant. This can be perceived as a survival strategy for the firm. But actually where did the problem starts?
Over a decade ago when Simeon Nyachae was the Minister for Agriculture, he prepared a bill that would help protect local producers, a bill that was shot at its infant stage.
In the bill, he proposed quota system to be used in importing sugar. The importation was to be done by the companies depending on their market share. For instance, Mumias, the largest producer, was to import 60 percent. The remaining percentage was to be shared by other companies like Sony, Nozia, Chemelil amongst others. But this was not to be.
The then National Assembly passed a motion that allowed private importers to the work even before Nyachae's bill was introduced to the floor of the house.
Considering the political heat that was being generated, most politicians, who were also involved in the trade, could not tolerate such regulations. They had their way and now it is haunting the sugar industry in Kenya.
In as much as Kenya does not produce enough sugar to sustain itself, the system proposed by Nyachae would have saved the industries as they would only import the amount required to bridge the deficit currently being experienced.
Currently, many jobs are hanging in the balance as companies are likely to retrench workers to reduce costs of production in order to make their produce competitive in the market.
The rule of the jungle is likely to apply and those not fit will possibly collapse. With debts worth millions of shillings the millers owe the farmers, something should be done as soon as possible to revive the collapsing industry.
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