Source: The Star
Author: Hilton Otenyo
Context and Background: The Kenyan government has responded to an outcry from sugarcane farmers by revising the price of sugarcane upwards, from the previously announced Sh4,950 per tonne to Sh5,000 per tonne. This adjustment comes after the Agriculture and Food Authority (AFA) set the lower price on August 7, 2024, which sparked significant dissatisfaction among farmers and leaders from sugarcane-growing regions.
The revised pricing was announced by the sugarcane pricing committee following a meeting at Kilimo House in Nairobi on Wednesday, August 21, 2024. This price adjustment is seen as a response to the farmers' backlash and an attempt by the government to address the concerns raised by stakeholders in the sugar industry.
Details of the Price Revision: The interim sugar price for August was initially set by the Sugar Directorate at Sh4,950 per tonne after the expiry of the previous interim sugar pricing committee. With no newly appointed Cabinet Secretary to establish a new committee, the AFA, through acting director June Chesire, released a notice stating the interim price. This announcement was met with immediate opposition from farmers' organizations and regional leaders, who argued that the reduced price was detrimental to the already struggling sugar industry.
Following the uproar, the sugarcane pricing committee reconvened and adjusted the price to Sh5,000 per tonne. Agriculture Cabinet Secretary Andrew Karanja explained that the new price was determined based on prevailing market conditions, including fluctuations in sugar prices, production costs, global trade dynamics, and the necessity to enhance farmers' income. Despite this increase, the revised price remains lower than the Sh5,125 per tonne price that was in place until the end of July 2024.
Farmers' Reaction: The Kenya Sugarcane Growers Association (KSGA), representing farmers, expressed mixed feelings about the price adjustment. Richard Ogendo, the secretary general of KSGA, acknowledged the Sh50 increment but criticized it as insufficient and disconnected from the realities of production costs. He highlighted that the cost of producing a tonne of sugarcane is significantly higher than the new price, suggesting that the increment does not adequately address the financial strain faced by farmers.
Ogendo also voiced concerns about the composition of the sugarcane pricing committee, stating that the renewed committee did not include representatives nominated by the farmers themselves. Instead, he claimed that those chosen to represent farmers were appointed by other parties, potentially skewing their advocacy towards different interests.
Government's Perspective: From the government’s standpoint, the upward revision of the sugarcane price is an effort to balance the various factors influencing the sugar market while attempting to placate the discontent among farmers. Agriculture CS Andrew Karanja emphasized that the new price aligns with current market conditions and aims to reflect changes in production costs and global trade dynamics. The move is part of a broader attempt to maintain stability in the sugar industry and support farmers, albeit within the constraints of the prevailing economic environment.
Opinion: Is the government's revision of the sugarcane price to Sh5,000 per tonne a sufficient response to farmers' demands, or is it merely a temporary fix?
The government’s decision to revise the sugarcane price upwards to Sh5,000 per tonne is a step in the right direction, reflecting a willingness to respond to farmers' concerns and to the realities of the sugar market. This adjustment, although modest, acknowledges the financial pressures faced by farmers and the need for a pricing structure that takes into account the costs of production and market conditions.
However, while the revision may offer some immediate relief, it falls short of addressing the deeper issues within the sugar industry. The increase of just Sh50 per tonne, while better than no adjustment, still does not fully cover the rising costs of production that farmers have been facing. As such, the new price may be seen as a temporary fix rather than a long-term solution to the challenges in the sector.
Moreover, the concerns raised by farmers about the representation on the sugarcane pricing committee indicate a need for more inclusive and transparent decision-making processes. Ensuring that farmers have a genuine voice in these discussions is crucial for fostering trust and creating policies that truly reflect the needs and realities of those on the ground.
While the price revision is a positive response to the immediate outcry, it highlights the need for more comprehensive reforms to ensure the sustainability and profitability of sugarcane farming in Kenya. The government must continue to engage with all stakeholders to develop a pricing framework that fairly compensates farmers and supports the long-term health of the industry.