Mumias sugar company to merge with cane farmers
05 June 2014, 22:21
Nairobi - The recently announced measures by the giant miller Mumias Sugar Company to take over sugarcane growing from farmers must factor in drastically overhauled partnerships with cane farmers and land owners.
The measures which are meant to boost cane supplies to the miller which is currently operating below capacity, must also ensure that the farmers and land owners are joint co-owners of the process with the company.
Reacting in Busia yesterday (Wednesday) to the remarks by MSC chairman Dan Ameyo, the Western Development Initiative Association (WEDIA) vice-chairman Joseph Barasa said: “This kind of arrangement is going to highly motivate farmers who have been suffering from delayed payments in patient support of MSC’s challenges over the past two years and land owners who will be leasing their land to grow the crop.
However he was fast to point out that failure for the company to partner with the farmers will lead to new challenges such as, poor crop husbandry, highly diminished security of sugarcane while on the farms, higher security costs to MSC, sugarcane development, farm maintenance and management costs among others.
Ameyo was reported by a section of the media saying that the company was going to embrace radical measures in a bid to turn around the company’s performance after being affected by a cane poaching crisis that saw its performance drop drastically.
This was attributed to extremely diminished sugarcane supplies due to the poaching crisis which drastically reduced the company’s production capacity to a paltry less than 60 per cent in more than two consistent years.
Among the new measures are the company’s taking over ownership of sugar cane growing from farmers and reviewing the company’s internal processes and procedures to curb revenue wastage. The company will also revamp cane transportation through the creation of buying centers close to the cane farms.
Barasa reiterated that although the new measures were welcome, it was paramount that the company actively involves cane farmers and targeted land owners who are expected to lease their land right from the beginning all the way through the implementation and management processes.
“Even with the land owners who are expected to lease their land to MSC, there must be clear understanding and agreements between all the parties concerned that they have a stake in the proceeds at all levels.” Barasa said.
He argued that even if the company is going to retain contracted farmers, it was equally important to consider land owners as partners even if the company fully owned the sugarcane since the value of land tends to automatically increase every year which should form the basis in gauging the percentage due to every land owner depending on size and value of the sugarcane delivered after each harvest.
“This way everybody will have a stake and with every stake greater motivation to jealously guard and husband the crop right from infancy all the way through harvesting and processing of the produce will be highly increased.” He added.
The MSC’s announcement of taking over ownership of sugarcane from the farmers comes in the wake of the company making massive losses after sugarcane from its contracted farmers has been the epicenter of the cane poaching crisis.
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