As Kenya's election season kicks into high gear, the sugar industry—a major employer and source of revenue for the country—is once again in the news. Why are sugar millers in court, and how does a country that grows at least as much raw sugarcane as its neighbours produce only a small fraction for consumption? To explore these and other questions, the LINKCast team talks to the farmers and processors closest to this story, piecing together the policy challenges facing the sugar industry and what the Kenyan government is doing to address them. We love hearing from our listeners! If you have any suggestions for future episodes or would like to leave us a comment, send us an email at linkcast@dai.com.
Sources
a. Kenya’s sugar history: https://www.kalro.org/sugar/?q=sugar-history
b. Parliament report on sugar crisis Kenya: http://www.parliament.go.ke/sites/default/files/2019-08/Report%20on%20the%20Crisis%20Facing%20the%20Sugar%20Industry%20in%20Kenya%20%28%20Annexures%29.pdf
c. Top sugar-producing countries: https://www.czarnikow.com/blog/the-sugar-series-the-top-10-sugar-producing-countries-in-the-world
d. Problems facing the sugar industry https://allafrica.com/stories/202105240177.html and https://www.sucam.co.ke/sugar-policy/sucam-policy-position
e. The story of sugar: https://www.sugar.org/blog/a-brief-history-of-real-sugar-the-story-of-sugar-cane/
00:00
This is LINKCast, the podcast that explores stories in the world of policy and development. I’m your host, Mark Wambui. Today’s podcast brings us to Kenya, my home, where we take a closer look at the sugar industry. Sugarcane farming has been part of the country's economy since the early 1900 and ranks as one of the top 6 commercial crops with the industry supporting the livelihoods of six million Kenyans.However, over the decade, the industry has been in decline with sugar production falling at a rate of 1% each year, add to that: there’s been a host of cases tying up the big sugar millers in court hindering significant recovery. So now, as Kenya moves towards this year’s 2022 general election, difficult questions are being asked about the future of the sugar sector. To understand how we got here and what the way forward will look like I’ll be joined by Noni Ireri, our in-house writer who’s been following the tale of sugar as it has steadily evolved over the past few years. Where does this all start?
01:12
Well, sugar in Kenya has a storied history. You could go all the way back to pre-independence when the firsts sugarcane companies were started or you could fast forward to just this past month in which all the news stories seemed to revolve around one or the other court case that millers were embroiled in.
So, how far back do you want us to go?
If you want us to get really technical it all started a century ago when the first large-scale sugar company, Miwani, was established. That was in 1922…
01:51
Okay. Okay. Now that that might just be too far back.
01:57
Got you. Well, to understand why there’s this infighting between the millers you have to appreciate what’s been happening in the industry over the past few years. And that’s a heavy question. So when I first started looking into this it seemed like a problem of numbers and those numbers are pretty stark.
02:14
Yes. If I’m not wrong, I’ve heard that currently, it costs 870 dollars to produce one tonne of sugar in Kenya.
02:23
Exactly! But see this number means very little on its own until you consider that the cost of production in Egypt is almost half that: 450 dollars per tonne and when you look at Malawi, it’s even less at 350 dollars for the same tonne.
So at that point alarm bells start going off and you wonder, why is the cost of production so high? I really couldn’t answer these questions on my own so I spoke to Hon. Busolo.
02:51
Honourable Bisi Busolo is the Chairman of the Sugar Campaign for Change or SUCAM, an organization that’s been working to change policies around the sugarcane industry in Kenya
03:04
Sugar is a political crop. It's one crop that people identify with Super profits and where there are super profit, there is a war over the sharing of the same. Now sugar being equivalent to cash is where sugar barons come in. You know, there are only two barons in this world, the sugar barons and drug barons. Now, that means, in a crop that is very profitable, there is a very acute struggles, these struggles solve themselves politically. Where the politics is good, there is good organization of the industry, where the politics is bad, there is disorder, which the Barons wish for so that they can accrue super-profits to the detriment of the sugarcane farmer.
03:54
So as you heard Mark, there are only two kinds of baron. The policies around sugar hinder progress in a big way. They start all the way from how the meals are governed, and the technology used to process the sugar and generally even knowledge dissemination on the better cane varieties that are available.
04:13
Okay, so high cost of production that can be solved by improving the policies around sugar? That seems pretty doable, but you’ve still not told us why we’re in court.
04:27
Right? Yes, it does seem pretty simple. It's the Golden Road to profitability. Apparently, I thought the same thing which brings me back to how this story started the millers and why the Millers are in court. And this all ties in to the second problem that faces the sugar industry, that is production. So Kenya grows 5.2 million tons of sugar each year, which is more than double Egypt's output because there are 2.8 million tonnes right don't those sound like great numbers? Yeah,
04:57
they do seem like great numbers, but I'm almost sure you're about to lead us into a problem
05:01
(Laughter) You're turning me into the Grinch of Sugarcane. But yes: from all the sugarcane we grow we only produce 0.5 million tonnes of sugar, Can you guess how much Egypt does?
05:12
I'm guessing a lot more,
05:15
A lot more 2.4 million tons to be exact, right? So just for perspective, to reiterate, right, we grow 5.2 million tonnes of sugarcane and get 0.5 tons of sugar, Egypt grows 2.8 million tons of sugarcane and gets from that 2.4 million tons of sugar, even look at those ratios.
05:37
I mean, when you say that it almost sounds like a miracle. So I'm guessing there's a lot more to this.
05:43
Yes. So you have to find a way to try and explain this. And this comes back now to the millers, which, right now in court, but I didn't know how to answer this question. So I spoke to Dr. Crispin Omondi, who's the Managing Director of the Nzoia Sugar Mill.
06:00
The miller is an entity that tries to maximize production. But the problem has been that if you don't do annual maintenance of these sugar factories, then you find that the production of sugar goes down, that efficiency goes down; most of the sugar, the sugar, the state on the males have had issues with maintenance. Maintenance is supposed to be done annually. But sometimes we go all the way even up to six years without a major overhaul. Now when that happens, then you'll find the mill rollers are worn out, you'll find this team, the boilers we produce for us they seem there's a lot of leakage, and therefore a lot of sugar remains in the biogas. And some of it is not completely boiled off to produce sugar. So it goes into molasses. And therefore the conversion of sugarcane to sugar becomes very inefficient. Ideally, a very well-maintained mill should use 10 tonnes of cane to produce one ton of sugar. But sometimes we find ourselves going to 15 tonnes of cane to one tonne of sugar, the five times on top is a loss and that loss can be reduced if we do regular maintenance of the mills. So that is where you will find the discrepancy. So I assume the case you are giving us of Egypt, I assume probably the mills are very modern. Probably they also do their annual maintenance on time. And therefore the recovery of sugar from the sugarcane is very high.
07:52
Ah, so it all comes back to the mills.
07:54
Yes, when you start looking into it you find the mills are so interesting in and of themselves and are a big part of the problem. The mills in Kenya are inefficient, old, and use outdated technology.
08:09
So again, for the mills aren't maintained. But that's not the full story. There's also the question of mismanagement. The meals have been accumulating huge debts. This is why they're in court.
08:22
Yes! This is why we're in court, mismanagement. See, when you get down to it, Kenya has 5 large state-owned mills that are financially distressed in one way or the other. So we’re currently in court because the government has been in a concerted push for privatization of the mills but for this to happen they need to have a clean financial sheet.
08:44
But now I have to ask, we've talked production and millers and court cases, but where is the farmer in all this?
08:52
Where is the farmer? This is the 870 dollar question. To understand their perspective, I spoke to Mr. Narupa.
09:02
Mr. Stephen Narupa, is a seasoned sugarcane farmer from Transmara in Kisumu county which is located in the sugar belt of Kenya just near the shores of Lake Victoria.
09:12
Sugarcane farmers have so many challenges. First of all, the price of cane is so low. Number two, the sugar cane doesn't have a policy or even structure. It's not there. That is the big challenge we are facing as sugarcane farmers as well as the cost of inputs. We have many types of inputs, we have silicone, we have fertilizer, and we have even the shamba (farm) preparation of the land. So for example, if soil is too high for the farmer to prepare the shamba you will use a lot of money to do the preparation. And then number two, even the fertilizer itself it's very expensive. Therefore we have governments subsidize fertilizer. But now, we're in dilemma because sugar is a political crop, but very profitable, if it is managed. If you prepare your land well, you will get according to the acreage, for example, you have two acres, three acres, if you manage well, you will get a good returns. So, it is not a question of more lands but of what you can do from your shamba. You can have your two acres, if you are able you can go and lease from another person then you get the shamba (farm) and then you will be earning a lot.
10:39
Ah, so what Mr. Narupa is saying is that if we had better management even at the level of our shambas, that is our farms, sugarcane can essentially be quite profitable. Now see I think you started this story in a roundabout fashion. We should have began with the farmer.
10:57
They should always start with a farmer. But hear me out. I actually wanted to start this story with a cup of tea, my cup of tea, because I do two sugars, and only buy Kenyan. But I know you're suddenly sugar less
11:11
Sugar free. I am sugar free, sugar free
11:15
Sugar less, but first the farmer. So you'll find that as Mr. Narupa told us the farmer is in a very precarious position. This is an industry that supports 6 million people and increasingly that number is composed68 of the youth: young cane farmers under the age of 35. So you find that for most of these they don't actually own the land they're farming, it's still under their father's title so getting financing is hard cause you can't access credit facilities. Which is why then the mills become all-important. The mills are everything.
11:49
Well, all this seems rather bleak to be quite honest. So what's the answer here?
11:54
A lot is happening. But there have been many people working behind the scenes to restore sugar and the industry as a whole to its past glory. So will you start taking sugar now? No support the industry.
12:09
I know, I've taken a cup or two of sugar cane juice once in a while it's a bit on the extreme side, but when served chilled, like to get can take that.
12:19
So that actually sounds very refreshing. Now I have to try both.
12:23
And
And that's the lovely place the sweet spot to end this conversation. Thank you for joining us. And thank you for listening to the LINKcast, episode one in 2022. And with that, we want to say thank you for joining us and catch us on the next episode of Link cast, where we talk about the more versatile food of rice. I think rice is much better than sugar.
12:50
I, vehemently disagree, but we'll have to wait for the next episode to see.
The conversation you've just listened to pointed at policy and what that meant in the sugar industry. It's important to mention then that in 2015 a report was authored by parliament titled The Crisis Facing the Sugar Industry in Kenya. Some of the recommendations made by the parliamentary committee addressed the questions of sugar imports into the country, the reduction of production costs, and asked for a waiver on farm inputs and machinery to offset the high cost of sugar production.
As of the recording of this podcast, a proposed Sugar Bill is in parliament. It seeks to, among other things, enforce strict rules of sugar imports into the country and restore the mandate of the Kenya Sugar Board which would oversee the regulation, development and promotion of the sugar industry.
13:45
Be sure to subscribe and listen for more in-depth stories in the world of policy and development. This episode has been made possible by the generous contribution of the American people through USAID’s Policy LINK.
13:59
Sources used to support the content of this episode are linked in the description box below.
SUMMARY KEYWORDS
sugar, kenya, millers, industry, sugarcane, farmer, shamba, barons, meals, question, mills, production, inputs, policy, crop, sugar cane, tonnes, find, tons, podcast