Source: The Standard
Writer: Philip Mwakio
Sugarcane farmers in Kenya have lauded the government's plan to introduce annual bonus payments, a move aligned with reforms to revitalize the sugar sector. Speaking at the Kakamega Governor’s Cup 2024, President William Ruto announced that sugarcane farmers, including those supplying Mumias Sugar Company, will receive bonuses for the first time, similar to tea and coffee farmers. The government has introduced measures such as leasing programs to facilitate timely farmer and worker payments.
In Kwale, Kiscol's advanced operations—including modern mills, an 18-megawatt power plant, and sophisticated irrigation—highlight the sector's potential. The reforms follow years of financial strain on state-owned sugar companies, which collectively hold a Sh128.06 billion debt. Improved cane management has resulted in a bumper harvest of 800,000 metric tonnes, reversing a history of underperformance. Farmers are optimistic that bonuses, alongside subsidies for fertilizers, better seed varieties, and training, will boost their morale and productivity.
OPINION: How can the Kenyan sugar industry ensure the sustainability of annual bonus payments while addressing financial challenges and enhancing productivity for farmers?
RESPONSE:
1. Diversify Revenue Streams: Encourage sugar millers to diversify into by-products like ethanol, bagasse-based power, and bio-products, generating additional revenue to support consistent bonus payments.
2. Implement Financial Restructuring: Address the collective debt of Sh128.06 billion among state-owned sugar companies through structured repayment plans, debt waivers, and public-private partnerships to stabilize the sector.
3. Promote Efficiency in Operations: Invest in modernized equipment and practices, as exemplified by Kiscol’s sub-surface drip irrigation and power co-generation, to enhance profitability and reduce operational costs.
4. Incentivize Quality Production: Link bonuses to the quality and yield of sugarcane supplied, encouraging farmers to adopt better agronomic practices and improve productivity.
5. Establish a National Bonus Fund: Create a dedicated sugarcane bonus fund supported by levies on sugar sales, government contributions, and miller profits to ensure regular and sustainable payments to farmers.
Sourced and Compiled by Rosemary Wambui