Nipate
Forum => Kenya Discussion => Topic started by: Omollo on April 23, 2016, 12:42:35 PM
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Is this not extremely obnoxious discrimination?
Coffee Farmers debts written off (by Kibaki and later Uhuru) : Nothing for Tea and Sugarcane
Sugar Factories LOANED money : Coffee Industry GRANTED tax-payers billions
Cashew Nut factories allowed to Die at the Coast: Kenyatta Family grabs the land (Kwale and Kilifi)
President Uhuru Kenyatta has announced a budgetary allocation of 1 billion to cushion miraa growers from the challenges of a ban from European markets two years ago.
Uhuru said he instructed the Cabinet, that discussed budgetary priorities for the next financial year in Naivasha last week, to include funds to support miraa, like other cash crops.
He spoke at State House, Nairobi, when he signed into law a Bill that will categorises miraa as a cash crop. The amended Crops Act opens doors for the crop to benefit from government budgetary funding.
The Mediated Version of the Miscellaneous Amendment Bill No 2 makes minor amendments to the Crops Act to recognise miraa as a cash crop.
The Act obligates the national government to establish mechanisms for promotion, production, distribution and marketing of miraa as a cash crop.
(http://www.the-star.co.ke/sites/default/files/styles/full_content/public/articles/2016/04/23/551460.jpg?itok=78A70OCB)
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more debt to finance a dying crop. how many chew miraa?
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I am sorry Omollo but you could never be any wronger (my own English).
No other sector has enjoyed so much support for so little gain than Sugar industry. The other laggard the Maize industry is little better off.
Gov has guaranteed more than 60B for entire sugar factories mostly located in Luo Nyanza and Western. Mumias just got 2B cash injection. The sick sugar industry has been propped for nearly 50 years.
Gov has also blocked very cheap import of Sugar for so many years to protect this dead as dodo sugar industry. Every kenyan is now subsidizing that sugar industry at greatest personal pain...sugar is dirty cheap in global market...but every morning millions of kenyans are giving up money to the most inefficient farmers in the world. Recently we even had to protect our selves from UGANDA sugar !!!!!!!!!!!!!!
It cheaper to buy Sugar in war torn Somalia than in Kenya. In fact Somalis have benefited greatly from smuggling this sugar.
Say whatever you'll say..but Kikuyuz have proven to be world class farmers. Miraa is a proven foreign exchange earner.
Until the mid late 90s, Coffee was the crop that propped the economy of this country and truly deserve every support.We still produce some of the best coffee in the world.
There is a lot that we can learn from Kikuyu farmers....a lot...our people in tea industry make annual pilgrimage to kikuyu & gema land to learn.....and you can see that Kalenjin..formerly agro-pastoral communities...are kicking arse in all these agricluture activities. It reality that a tea farmer in central earn about twice what farmer in kericho or bomet or nandi earn. It easy to think this is some "conspiracy" until you accept to face the painful truth...that these farmers are working harder, smarter and more efficiently than you.
Kikuyu dominate industries that kenya excel in...dairy,horticulture, tea, coffee, miraa and etc. We should learn from that.
Yes there are also areas kikuyu need to learn from rest of kenya......one of which is having less crime/less alcohol addiction/less drugs.
There are things to hate about kikuyus...there are things we need admire and learn from them. No doubt they are prolific farmers. Deserving of every support.
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Every kenyan is now subsidizing that sugar industry at greatest personal pain...
Kenya produces around 500,000 thousand tonnes of sugar annually with an ex factory price of Kes. 90 per kg vis a vis an international sugar price of Kes 45 per kg. That Kes. 45 difference is picked by Kenyan consumers because it's too expensive to be exported anywhere. We therefore subsidise this industry by Kes 22.5 billion each year, every year. Above this subsidy footed by consumers, take note that at Kes.90 the sugar millers are selling sugar below the cost of production, they end up reporting losses on an annual basis and at some point tax payers have to step in and re capitalise these firms. Add a few billions more on top of the annual Kes. 22.5billion.
Couple this with the lost opportunity for our food processing industry, it's simply bonkers to continue supporting this industry.
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Precisely. Thanks for putting the figures down.
Kenya produces around 500,000 thousand tonnes of sugar annually with an ex factory price of Kes. 90 per kg vis a vis an international sugar price of Kes 45 per kg. That Kes. 45 difference is picked by Kenyan consumers because it's too expensive to be exported anywhere. We therefore subsidise this industry by Kes 22.5 billion each year, every year. Above this subsidy footed by consumers, take note that at Kes.90 the sugar millers are selling sugar below the cost of production, they end up reporting losses on an annual basis and at some point tax payers have to step in and re capitalise these firms. Add a few billions more on top of the annual Kes. 22.5billion.
Couple this with the lost opportunity for our food processing industry, it's simply bonkers to continue supporting this industry.
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There is a difference here: GoK may have supported the Sugar INDUSTRY by pumping in money which the likes of Kidero then share with the so called "donor". NOTHING has ever gone to the individual farmers.
Compare that to Kibaki writing off ALL the debts of coffee farmers and once more debts were accumulated, Uhuru comes and writes them off. Kikuyu farmers are in the Debt Writing Off business not Farming.
Do Sugarcane farmers have debts? Could they benefit from debt relief?
Most of the sugarcane delivered to the factories goes to service debts. From inputs to transportation of the very sugarcane and its harvesting. It is not unusual for farmers to get a pay slip and zero cash.
What I need to know is why Kikuyu Presidents (Not Moi) see it fit to repay the individual personal debts of Kikuyu farmers and not those of Luo and Luhya farmers.
Note also that Pundit has fudged the facts.
1. The Government of Kikuyus (GoK) gives grants to Kikuyu farmers and not loans
2. The same GoK gives LOANS to Sugarcane FACTORIES NOT farmers
I would have less to say if the farmers were treated equally.
About unprodutivity: There are many factors causing this not least GoK. As the owner GoK appoints incompetent managers for these factories. When Mumias was under the Booker Management it made profit and upon handing over GoK embarked on its usual thievery.
The Sudanese and Egyptian factories benefit from government subsidies. Brazilian factories produce sugar as a by-product.
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Omollo,
I understand your beef here is stabex (coffee) and maybe this miraa deal (which is still hazy). I don't think gov gives subsidies to region but to crops. So if you grew coffee, had some co-op, like say in Kisii then you should qualify for coffee Stabex. The same is true for sugar farmers wherever they are located.Of course I agree that gov has in the past favored some regions, coffee & tea & livestock received special attention during Kenyatta & Moi regime but I won't take from Kikuyu or Gema that they are some of most hardworking farmers deserving of every support.
The issue is which crop in say Nyanza do you think has reached a level it deserve gov support. There is barely nothing happening there. That should be the start. Miraa has been doing well and deserve support now. Just like tea industry was asking gov for some support when the markets went haywire.
As far as I know...western and north rift politicians have used political muscle to force us to subsidize industries which have no business propping...we should import Brazilian cheap sugar...and find something we can do better...maybe Soya beans..maybe dairy....anything.....that we can produce cheaply.
Our sugar is more expensive than UG, TZ and of all places MALAWI sugar.
We cannot afford to subsidize agricultural activities.
There is a difference here: GoK may have supported the Sugar INDUSTRY by pumping in money which the likes of Kidero then share with the so called "donor". NOTHING has ever gone to the individual farmers.
Compare that to Kibaki writing off ALL the debts of coffee farmers and once more debts were accumulated, Uhuru comes and writes them off. Kikuyu farmers are in the Debt Writing Off business not Farming.
Do Sugarcane farmers have debts? Could they benefit from debt relief?
Most of the sugarcane delivered to the factories goes to service debts. From inputs to transportation of the very sugarcane and its harvesting. It is not unusual for farmers to get a pay slip and zero cash.
What I need to know is why Kikuyu Presidents (Not Moi) see it fit to repay the individual personal debts of Kikuyu farmers and not those of Luo and Luhya farmers.
Note also that Pundit has fudged the facts.
1. The Government of Kikuyus (GoK) gives grants to Kikuyu farmers and not loans
2. The same GoK gives LOANS to Sugarcane FACTORIES NOT farmers
I would have less to say if the farmers were treated equally.
About unprodutivity: There are many factors causing this not least GoK. As the owner GoK appoints incompetent managers for these factories. When Mumias was under the Booker Management it made profit and upon handing over GoK embarked on its usual thievery.
The Sudanese and Egyptian factories benefit from government subsidies. Brazilian factories produce sugar as a by-product.
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Pundit
Review my posts here and at Mslanani (Choo.com) and you will find what I think of subsidies. I have been at the forefront of advocating for the uprooting of sugarcane and the planting of other crops or use of the land for other economic activities. I believe we should buy cheap sugar while educating our people about the dangers of sugar and hoping the demand for it will wane.
My concern here is not about subsidies. It is the open and blatant discrimination by GoK.
You raise the issue of cash crops in Luoland. Again I would refer you to previous debatesd where I have shown that successive governments used colonial legislation meant to force Luos and Luhyas to become cheap famr labour to deny these areas the right to grow certain crops. You know the history of the small scale farmer in RV, Western and Nyanza.
There is no scientific reason why tea isn't grown in Luo Nyanza but grows in Kisii. This has to be corrected as part of Agenda 4 and the victims should not be blamed.
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Supporting Miraa is more political rather than reality. It could have been better to support them cultivate high value crops like nuts, which b the way are consumed by a majority rather than Miraas minority. You may argue all you want but its politically short minded deal that will not benefit the area. Same as subsidizing sugar which went into Kideros pockets and left farmers moneyless.
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I feel Omollo on historical and present regional discrimination. But the victims should be assisted without castigating innocent beneficiaries -- Gema farmers -- who have been just making a living.
Sugar (and miraa) growers need alternatives which should be run as government programs. We can't just say it is economically unsound to subsidize agriculture, because it is more imperative to have equitable development and socioeconomic justice.
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Kenya govt should bail out of supporting failed cash crops. Let private sector move in. Govt should focus on FOOD security ( maize , beans, cabbage , sukuma wiki , toamtoes , dairy and beef industry.
Let those sugar , tea , coffee , miraa inudstry face the same fate as cotton , pyrethrum cashewnut etc. The modernise , become effecient , find their market or they DIE
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Kenya govt should bail out of supporting failed cash crops. Let private sector move in. Govt should focus on FOOD security ( maize , beans, cabbage , sukuma wiki , toamtoes , dairy and beef industry.
Let those sugar , tea , coffee , miraa inudstry face the same fate as cotton , pyrethrum cashewnut etc. The modernise , become effecient , find their market or they DIE
You may be right on cash crops. But that Darwinian approach is not optimal. That is why we have government to plan the best alternatives for the affected people. Policy making is the antithesis of letting nature take its cause.
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Robina
First you stop the bleeding, sew the wound and then the healing starts. The discrimination is on-going. The Imperial Presidency is back supported by a zombie parliament that allows nay encourages Uhuru to treat National Revenue as Pesa ya Mama Ngina.
I do not support subsidies for anything other than what can come under Strategic Food Reserves.ALL Non performing agri-business should simply die off without any tax monies going in to it.
That said what is the wisdom of supporting miraa? Are we blind to the suffering of the addicts and their families around the world? Should we be aiding such an "industry"? To my mind jubilee has shown total irresponsibility by recent actions:
1. Allowing Mass Gambling
2. Paying lip service to Alcoholism while staging stunts to appear to be fighting the vice
3. Going to bed with drug cartels and barons (CORD is in this too as the Second Demon)
4. Corruption has finally been institutionalized with the Euro Bond Heist (I know my friend Pundit thinks it is nonsense but keep watching this space in the next four weeks as more information comes to the surface)
I feel Omollo on historical and present regional discrimination. But the victims should be assisted without castigating innocent beneficiaries -- Gema farmers -- who have been just making a living.
Sugar (and miraa) growers need alternatives which should be run as government programs. We can't just say it is economically unsound to subsidize agriculture, because it is more imperative to have equitable development and socioeconomic justice.
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Yes there is political malady -- tribalism, corruption, incompetence and psychophancy. Let us not conflate the debate.
Economic prudence is to let free market reign. But leadership requires more than that. It is the government's DUTY to assist the sugar, miraa, etc farmers find alternative economic undertaking.
Robina
First you stop the bleeding, sew the wound and then the healing starts. The discrimination is on-going. The Imperial Presidency is back supported by a zombie parliament that allows nay encourages Uhuru to treat National Revenue as Pesa ya Mama Ngina.
I do not support subsidies for anything other than what can come under Strategic Food Reserves.ALL Non performing agri-business should simply die off without any tax monies going in to it.
That said what is the wisdom of supporting miraa? Are we blind to the suffering of the addicts and their families around the world? Should we be aiding such an "industry"? To my mind jubilee has shown total irresponsibility by recent actions:
1. Allowing Mass Gambling
2. Paying lip service to Alcoholism while staging stunts to appear to be fighting the vice
3. Going to bed with drug cartels and barons (CORD is in this too as the Second Demon)
4. Corruption has finally been institutionalized with the Euro Bond Heist (I know my friend Pundit thinks it is nonsense but keep watching this space in the next four weeks as more information comes to the surface)
I feel Omollo on historical and present regional discrimination. But the victims should be assisted without castigating innocent beneficiaries -- Gema farmers -- who have been just making a living.
Sugar (and miraa) growers need alternatives which should be run as government programs. We can't just say it is economically unsound to subsidize agriculture, because it is more imperative to have equitable development and socioeconomic justice.
-
NOTHING has ever gone to the individual farmers.
The Sudanese and Egyptian factories benefit from government subsidies. Brazilian factories produce sugar as a by-product.
Those state controlled sugar millers are forced to buy sugarcane from farmers at prices way above the market rate, that's one of the reasons why our finished product has a price tag that's double the international price.
In Brazil millers buy sugarcane at about US $18 while in Kenya farmers are paid about $35 per tonne. That Kes 45 per kg subsidy consumers are forced to pay, some of it goes to the farmer.
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Robina
Speaking of conflation, please review the subject before your next post. I sought to address your list below: Tribalism, corruption etc. That is what the Uhuru Kenyatta government is charged with. The other matters such as justification for or against subsidies are indeed subsidiary to the debate. In other words I am asking why a government claiming the legitimacy of election can openly discriminate against its own people and confer privileges based on tribe. I do not think it is a matter to sweep under the carpet by a casual and hurried "admission" before moving on to ostensibly more important issues of government "duties".
I do not agree with your premise that government has any duty whatever to assist any industry unless that industry encompasses a National Security concern. Perhaps you can point at the foundation or basis for this so called "duty". Is it constitutional?
May be you did not notice the contradiction embedded in your own post where one one hand you advocate for the "prudence" of the"free market"while on the other you emphasize government [imprudent] intervention.
Robina what leadership discriminates against citizenry?
Kikuyu farmers have had their debts paid in full by the Kibaki government; Did it help? No they made more debts which Uhuru paid. Take a wild guess when the next debt and repayment would be due!
Yes there is political malady -- tribalism, corruption, incompetence and psychophancy. Let us not conflate the debate.
Economic prudence is to let free market reign. But leadership requires more than that. It is the government's DUTY to assist the sugar, miraa, etc farmers find alternative economic undertaking.
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Those state controlled sugar millers are forced to buy sugarcane from farmers at prices way above the market rate, that's one of the reasons why our finished product has a price tag that's double the international price.
In Brazil millers buy sugarcane at about US $18 while in Kenya farmers are paid about $35 per tonne. That Kes 45 per kg subsidy consumers are forced to pay, some of it goes to the farmer.
I am glad to see Yule Musee here. I guess I have been away for too long
Please read this:
http://mobile.nation.co.ke/news/Why-the-poor-Kenyan-sugarcane-grower-slave/-/1950946/2358254/-/format/xhtml/-/e9gcyaz/-/index.html
By BENSON AMADALA
More by this Author
By JOHN SHILITSA
More by this Author
IN SUMMARY
Contacted, Mumias Sugar Company director for agriculture Wesley Koech sent a text message saying he would comment on the issue later.
ADVERTISEMENT
ADVERTISEMENT
Sugar factories in the country are fleecing farmers by charging them exorbitantly for services and inputs extended to them on credit. It is one of the biggest scandals in the Agriculture sector.
Documents seen by the Nation from many farmers in Bungoma, Kakamega, Migori, Homa Bay and other parts of western Kenya show that farmers are paying exorbitantly for cane deliveries to factories, ploughing, furrowing, seeds, harvesting and fertiliser supply among other costs.
The millers also attach interest rates that are way above the banking industry average to all farm inputs and services, a scenario that industry players say has ensured that many farmers remain in poverty.
In a country with a high cost sugar production model that has left the sector under constant threat from imports from other Comesa producers, it can now be established that millers are part of the problem.
It begins with how sugar firms calculate a farmer’s dues for cane delivered.
The process is a discretion of the miller and farmers only realise the seemingly endless list of deductions when they receive their final statement.
Mr Protasus Wekesa is a contracted farmer for Mumias Sugar Company (MSC).
From a gross of Sh250,000 that his three-acre farm produced, his May 2014 statement shows that he received a net pay of only Sh25,000.
Differing statements
In 2012, Mr Wekesa realised Sh20,000 from a quarter an acre piece, underlining the complexity in which millers calculate farmers’ dues.
“Based on the 2012 returns, I was expecting not less than Sh150,000 from my three acres if the company’s calculations were consistent,” the distraught farmer told the Nation.
His farm is barely 10 kilometres from MSC but his statement showed that he was charged Sh5,200 for transportation of cane per kilometre.
Cane was ferried twice from Mr Wekesa’s farm, bringing the total transport charges to Sh52,000. His cane, according to the company, was valued at Sh250,000.
All millers supply seed cane to farmers at a cost that is deducted from their dues upon maturity of the crop, ordinarily after 18 months.
Mr Wekesa, received 9.8 tonnes of seed cane at a cost of Sh32,226 but upon harvest, the company deducted an extra Sh19,171 as interest, representing 59.4 per cent in just 18 months.
The average lending rate in Kenyan banks is 13 per cent per annum thus the model adopted by the company only serves to hurt and enslave the poor farmer.
“I cannot afford school fees for my children in high school and colleges. I am now really confused. After waiting for almost two years, this is all I get,” said Mr Wekesa, a father of six.
And he is not alone in this woeful state. Thousands of farmers in Mumias are crying foul after inconsistent returns from the miller.
Many do not understand the complexity of computing their returns and are accusing the firm of exploitation.
As a result, thousands are opting for other crops.
Maize and beans are the most preferred alternatives.
The farmers say they can no longer invest in a cash crop that gives them negative margins after a two-year wait.
Interviews with many other contracted cane farmers revealed that the number of tonnes indicated on the pay statement often differs greatly with the figures they get.
The findings lend credence to claims that company officials could be defrauding farmers since cane harvesters are usually paid per tonne.
Kenya Sugar Board (KSB) director for Nzoia region Mr Saul Busolo blames the sorry state of farmers to poor representation or a lack of it. It has left them at the mercy of unscrupulous company officials.
Debt burden
“A single farmer cannot walk into a factory to question how deductions are arrived at and I can say with a finality that many of them are suffering in silence,” said Mr Busolo.
Previously, farmers had representatives and unions to protect their interests but rampant corruption and collusion with company officials led to their collapse.
In Mumias, for example, there was the Mumias Outgrowers Company (Moco). It has since collapsed
Farmers allied to Nzoia Sugar Company (NSC) have Nzoia Outgrowers Company (Noco) whose operations are on the brink of collapse. NSC itself has been sagging under the burden of debt for years.
The effect of the Value Added Tax (Vat) on fuel products, observed Mr Busolo, had also served to drive up transport costs that currently account for 40 per cent of cost of production in the sugar industry.
The KSB executive revealed that the country lacked a standard formula for calculating interest charged on farm inputs as well as cane transportation costs, leaving farmers at the mercy of millers
“Transport charges are arrived at between millers and contractors the same way interest rates are the discretion of the factory’s management,” said Mr Busolo by phone.
The rates charged on other services like ploughing, furrowing, survey and harrowing equally attract interest, sometimes as high as 30 per cent over the 18 month-maturity period.
What is paid to outgrowers (contracted farmers) is, however, set each season by the Cane Pricing Committee (CPC) which comprises representatives from KSB, Kenya Sugarcane Growers Association (KSGA) and Kenya Sugar Millers Association (KSMA).
Misery of farmers
Seventy-year-old Pascal Sakwa from Kakamega County has cultivated sugarcane for the past 40 years.
But Mr Sakwa has been forced to look elsewhere to supplement his meagre earnings from sugarcane farming.
He also works as a security guard at Eshisiru Primary School since his earnings from sugarcane farming on his one-acre parcel of land at Shikoti, Butsotso Central location, can hardly sustain him and the family.
“I have planted sugarcane on my farm from 1971 but life has been tough due to poor returns from cane farming,” said Mr Sakwa.
Long wait
He says he has been harvesting up to 50 tonnes of sugarcane for delivery to Mumias Sugar Factory after waiting for nearly 22 months.
But instead of smiling all the way to the bank, the figures on his payment statement indicate a DR (debit), indicating he owes the miller money after delivering cane.
Mr Sakwa’s is the story of most sugarcane farmers, who after deductions have been made for fertiliser, seeds and other services provided by the miller such as ploughing, harrowing, furrowing of the field and transportation cost, they end up with nothing to show for their efforts.
Mr Sakwa says that he ends up with a debt of about Sh10,000 after delivering cane to the miller on many occasions.
“It is a gamble when one plants sugarcane and hopes to make some money out of it. The long list of deductions leaves the farmer without anything to take home and that is the sad part,” he says.
For instance, a grower whose farm is eight kilometres from Mumias Sugar Factory pays Sh880 per tonne of cane delivered.
The high transportation cost is one of the most common complaints by farmers in the sugar zone.
Contacted, Mumias Sugar Company director for agriculture Wesley Koech sent a text message saying he would comment on the issue later.
Ms Jerida Bakhoya Nambani’s story is not any different. The sugarcane farmer at Nambacha in Navakolo Sub-County made Sh220,473 from her 1.7 hectares parcel of land last year.
However, she took home nothing and was instead required to pay the miller Sh54,000 accruing from the crop pre-harvest costs.
The costs include ploughing, furrowing, harrowing and land survey expenses usually recovered after crop harvest.
The total deductions in the payment statement from Mumias Sugar Company were Sh275,231.
The statement is among several others gathering dust on the desk of Kenya National Sugarcane Farmers Union secretary Simon Wesechere at Shianda trading centre in Mumias.
Ms Nambani was charged Sh27,000 for DAP fertiliser at planting and Sh52,000 for transportation of cane from her farm to the factory, about 15 kilometres away.
She is not the only one affected. Mr Mohammed Mboya Kalo from Lubinu earned Sh73,267 gross pay from his 0.5 hectares land on February 7 last year. However, total deductions were Sh93,718.
This included Sh11,691 for fertiliser supplied and Sh880 for transport per tonne. His land is about eight kilometres from the factory. The farmer owes Mumias Sugar Sh20,431 as indicated in the statement.
Several other farmers have raised similar complaints.
However, Mr Wesechere says the only way out is to empower farmers and enable them to undertake all activities involved in sugar production without having to borrow.
“Farmers must be able to plough their land, do the harrowing and furrowing on their own and if possible transport cane to the factories,” he told Nation.
According to the union leader, the role of the miller and the farmers must be clearly stipulated and followed to the letter.
He said the two parties should meet at the market as buyer and seller. “We need to draw afresh the contract between sugar firms and farmers in this area in order to capture these important aspects,” he said.
Farm independently
Mumias Sugar has in the past encouraged growers to undertake sugarcane farming “independently” instead of relying on the miller to provide all expenses involved in the cash crop development and production.
The company rolled out a multi-million shilling dairy farming project targeting sugarcane farmers to provide diversification options for the growers.
Apart from income from milk, the project also seeks to enable farmers to rehabilitate their farms by using cow dung as manure.
The company has already bought several farmers dairy cows.
Last month, the company’s board chairman Dan Ameyo encouraged growers to embrace a new arrangement where the two parties could enter a land lease agreement of at least six years.
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Those state controlled sugar millers are forced to buy sugarcane from farmers at prices way above the market rate, that's one of the reasons why our finished product has a price tag that's double the international price.
In Brazil millers buy sugarcane at about US $18 while in Kenya farmers are paid about $35 per tonne. That Kes 45 per kg subsidy consumers are forced to pay, some of it goes to the farmer.
I am glad to see Yule Musee here. I guess I have been away for too long
Please read this:
http://mobile.nation.co.ke/news/Why-the-poor-Kenyan-sugarcane-grower-slave/-/1950946/2358254/-/format/xhtml/-/e9gcyaz/-/index.html
By BENSON AMADALA
More by this Author
By JOHN SHILITSA
More by this Author
IN SUMMARY
Contacted, Mumias Sugar Company director for agriculture Wesley Koech sent a text message saying he would comment on the issue later.
ADVERTISEMENT
ADVERTISEMENT
Sugar factories in the country are fleecing farmers by charging them exorbitantly for services and inputs extended to them on credit. It is one of the biggest scandals in the Agriculture sector.
Documents seen by the Nation from many farmers in Bungoma, Kakamega, Migori, Homa Bay and other parts of western Kenya show that farmers are paying exorbitantly for cane deliveries to factories, ploughing, furrowing, seeds, harvesting and fertiliser supply among other costs.
The millers also attach interest rates that are way above the banking industry average to all farm inputs and services, a scenario that industry players say has ensured that many farmers remain in poverty.
In a country with a high cost sugar production model that has left the sector under constant threat from imports from other Comesa producers, it can now be established that millers are part of the problem.
It begins with how sugar firms calculate a farmer’s dues for cane delivered.
The process is a discretion of the miller and farmers only realise the seemingly endless list of deductions when they receive their final statement.
Mr Protasus Wekesa is a contracted farmer for Mumias Sugar Company (MSC).
From a gross of Sh250,000 that his three-acre farm produced, his May 2014 statement shows that he received a net pay of only Sh25,000.
Differing statements
In 2012, Mr Wekesa realised Sh20,000 from a quarter an acre piece, underlining the complexity in which millers calculate farmers’ dues.
“Based on the 2012 returns, I was expecting not less than Sh150,000 from my three acres if the company’s calculations were consistent,” the distraught farmer told the Nation.
His farm is barely 10 kilometres from MSC but his statement showed that he was charged Sh5,200 for transportation of cane per kilometre.
Cane was ferried twice from Mr Wekesa’s farm, bringing the total transport charges to Sh52,000. His cane, according to the company, was valued at Sh250,000.
All millers supply seed cane to farmers at a cost that is deducted from their dues upon maturity of the crop, ordinarily after 18 months.
Mr Wekesa, received 9.8 tonnes of seed cane at a cost of Sh32,226 but upon harvest, the company deducted an extra Sh19,171 as interest, representing 59.4 per cent in just 18 months.
The average lending rate in Kenyan banks is 13 per cent per annum thus the model adopted by the company only serves to hurt and enslave the poor farmer.
“I cannot afford school fees for my children in high school and colleges. I am now really confused. After waiting for almost two years, this is all I get,” said Mr Wekesa, a father of six.
And he is not alone in this woeful state. Thousands of farmers in Mumias are crying foul after inconsistent returns from the miller.
Many do not understand the complexity of computing their returns and are accusing the firm of exploitation.
As a result, thousands are opting for other crops.
Maize and beans are the most preferred alternatives.
The farmers say they can no longer invest in a cash crop that gives them negative margins after a two-year wait.
Interviews with many other contracted cane farmers revealed that the number of tonnes indicated on the pay statement often differs greatly with the figures they get.
The findings lend credence to claims that company officials could be defrauding farmers since cane harvesters are usually paid per tonne.
Kenya Sugar Board (KSB) director for Nzoia region Mr Saul Busolo blames the sorry state of farmers to poor representation or a lack of it. It has left them at the mercy of unscrupulous company officials.
Debt burden
“A single farmer cannot walk into a factory to question how deductions are arrived at and I can say with a finality that many of them are suffering in silence,” said Mr Busolo.
Previously, farmers had representatives and unions to protect their interests but rampant corruption and collusion with company officials led to their collapse.
In Mumias, for example, there was the Mumias Outgrowers Company (Moco). It has since collapsed
Farmers allied to Nzoia Sugar Company (NSC) have Nzoia Outgrowers Company (Noco) whose operations are on the brink of collapse. NSC itself has been sagging under the burden of debt for years.
The effect of the Value Added Tax (Vat) on fuel products, observed Mr Busolo, had also served to drive up transport costs that currently account for 40 per cent of cost of production in the sugar industry.
The KSB executive revealed that the country lacked a standard formula for calculating interest charged on farm inputs as well as cane transportation costs, leaving farmers at the mercy of millers
“Transport charges are arrived at between millers and contractors the same way interest rates are the discretion of the factory’s management,” said Mr Busolo by phone.
The rates charged on other services like ploughing, furrowing, survey and harrowing equally attract interest, sometimes as high as 30 per cent over the 18 month-maturity period.
What is paid to outgrowers (contracted farmers) is, however, set each season by the Cane Pricing Committee (CPC) which comprises representatives from KSB, Kenya Sugarcane Growers Association (KSGA) and Kenya Sugar Millers Association (KSMA).
Misery of farmers
Seventy-year-old Pascal Sakwa from Kakamega County has cultivated sugarcane for the past 40 years.
But Mr Sakwa has been forced to look elsewhere to supplement his meagre earnings from sugarcane farming.
He also works as a security guard at Eshisiru Primary School since his earnings from sugarcane farming on his one-acre parcel of land at Shikoti, Butsotso Central location, can hardly sustain him and the family.
“I have planted sugarcane on my farm from 1971 but life has been tough due to poor returns from cane farming,” said Mr Sakwa.
Long wait
He says he has been harvesting up to 50 tonnes of sugarcane for delivery to Mumias Sugar Factory after waiting for nearly 22 months.
But instead of smiling all the way to the bank, the figures on his payment statement indicate a DR (debit), indicating he owes the miller money after delivering cane.
Mr Sakwa’s is the story of most sugarcane farmers, who after deductions have been made for fertiliser, seeds and other services provided by the miller such as ploughing, harrowing, furrowing of the field and transportation cost, they end up with nothing to show for their efforts.
Mr Sakwa says that he ends up with a debt of about Sh10,000 after delivering cane to the miller on many occasions.
“It is a gamble when one plants sugarcane and hopes to make some money out of it. The long list of deductions leaves the farmer without anything to take home and that is the sad part,” he says.
For instance, a grower whose farm is eight kilometres from Mumias Sugar Factory pays Sh880 per tonne of cane delivered.
The high transportation cost is one of the most common complaints by farmers in the sugar zone.
Contacted, Mumias Sugar Company director for agriculture Wesley Koech sent a text message saying he would comment on the issue later.
Ms Jerida Bakhoya Nambani’s story is not any different. The sugarcane farmer at Nambacha in Navakolo Sub-County made Sh220,473 from her 1.7 hectares parcel of land last year.
However, she took home nothing and was instead required to pay the miller Sh54,000 accruing from the crop pre-harvest costs.
The costs include ploughing, furrowing, harrowing and land survey expenses usually recovered after crop harvest.
The total deductions in the payment statement from Mumias Sugar Company were Sh275,231.
The statement is among several others gathering dust on the desk of Kenya National Sugarcane Farmers Union secretary Simon Wesechere at Shianda trading centre in Mumias.
Ms Nambani was charged Sh27,000 for DAP fertiliser at planting and Sh52,000 for transportation of cane from her farm to the factory, about 15 kilometres away.
She is not the only one affected. Mr Mohammed Mboya Kalo from Lubinu earned Sh73,267 gross pay from his 0.5 hectares land on February 7 last year. However, total deductions were Sh93,718.
This included Sh11,691 for fertiliser supplied and Sh880 for transport per tonne. His land is about eight kilometres from the factory. The farmer owes Mumias Sugar Sh20,431 as indicated in the statement.
Several other farmers have raised similar complaints.
However, Mr Wesechere says the only way out is to empower farmers and enable them to undertake all activities involved in sugar production without having to borrow.
“Farmers must be able to plough their land, do the harrowing and furrowing on their own and if possible transport cane to the factories,” he told Nation.
According to the union leader, the role of the miller and the farmers must be clearly stipulated and followed to the letter.
He said the two parties should meet at the market as buyer and seller. “We need to draw afresh the contract between sugar firms and farmers in this area in order to capture these important aspects,” he said.
Farm independently
Mumias Sugar has in the past encouraged growers to undertake sugarcane farming “independently” instead of relying on the miller to provide all expenses involved in the cash crop development and production.
The company rolled out a multi-million shilling dairy farming project targeting sugarcane farmers to provide diversification options for the growers.
Apart from income from milk, the project also seeks to enable farmers to rehabilitate their farms by using cow dung as manure.
The company has already bought several farmers dairy cows.
Last month, the company’s board chairman Dan Ameyo encouraged growers to embrace a new arrangement where the two parties could enter a land lease agreement of at least six years.
State firms prey on the farmers they are supposed to serve, this is not a new thing, from the sugar millers to ktda, to pyrethrum board, coffee board ad infinitum. It's your argument of zero subsidies to cane to farmers I'm trying to demolish
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Yes Omollo, Jubilee favors Gema and RV as their piper. No excuses. Our "ideology" is tribe so while Obama may favor minorities or the poor, our leaders attend to their people. Unlike socioeconomic ideology that allows some wiggleroom, ethnicity is curved in the DNA leading to the PEV scenario.
Uhuru needs a solid Meru block so he unlocks the purse. He does not see such payoff in Bondo or Nyamira. Politics. This takes us to psychophancy and incompetence -- non-GEMA MPs will not do their job so this will stand.
Pundit has pushed here for 80% devolution for expediency. Well 40% seems to be the US, Germany, etc average. Germany has about 15% 'Equalisation' revenue share to ensure equity in living standards. Resource distribution is the driver of harmony or lack of it. Our new laws left 15% for the counties and a meagre 0.5% for equalization :( These are the basics that fell through the political cracks in Naivasha.
Yes, our government is tribal and only devolution and the regional balance clause protect non-Jubilee folks from rout. Sad but true.
SUBSIDIES... Economic policy is mandated to the government of the day. Still there are fundamental principles on striving to better the wellbeing of all citizens. Just like the revenue allocation is a policy item yet has equity clauses in the book. Note the duty I allude is to facilitate farmers with viable alternatives, not subsidies per se.
Robina
Speaking of conflation, please review the subject before your next post. I sought to address your list below: Tribalism, corruption etc. That is what the Uhuru Kenyatta government is charged with. The other matters such as justification for or against subsidies are indeed subsidiary to the debate. In other words I am asking why a government claiming the legitimacy of election can openly discriminate against its own people and confer privileges based on tribe. I do not think it is a matter to sweep under the carpet by a casual and hurried "admission" before moving on to ostensibly more important issues of government "duties".
I do not agree with your premise that government has any duty whatever to assist any industry unless that industry encompasses a National Security concern. Perhaps you can point at the foundation or basis for this so called "duty". Is it constitutional?
May be you did not notice the contradiction embedded in your own post where one one hand you advocate for the "prudence" of the"free market"while on the other you emphasize government [imprudent] intervention.
Robina what leadership discriminates against citizenry?
Kikuyu farmers have had their debts paid in full by the Kibaki government; Did it help? No they made more debts which Uhuru paid. Take a wild guess when the next debt and repayment would be due!
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Yes the answer lies in devolution leading to federalism (where counties collect their taxes). That is the only answer in an environment poisoned by tribal politics.Corrupt governors will not survive the next election. They will go home like 80% of them. UhuRuto are save by tribal politics though.
Yes Omollo, Jubilee favors Gema and RV as their piper. No excuses. Our "ideology" is tribe so while Obama may favor minorities or the poor, our leaders attend to their people. Unlike socioeconomic ideology that allows some wiggleroom, ethnicity is curved in the DNA leading to the PEV scenario.
Uhuru needs a solid Meru block so he unlocks the purse. He does not see such payoff in Bondo or Nyamira. Politics. This takes us to psychophancy and incompetence -- non-GEMA MPs will not do their job so this will stand.
Pundit has pushed here for 80% devolution for expediency. Well 40% seems to be the US, Germany, etc average. Germany has about 15% 'Equalisation' revenue share to ensure equity in living standards. Resource distribution is the driver of harmony or lack of it. Our new laws left 15% for the counties and a meagre 0.5% for equalization :( These are the basics that fell through the political cracks in Naivasha.
Yes, our government is tribal and only devolution and the regional balance clause protect non-Jubilee folks from rout. Sad but true.
SUBSIDIES... Economic policy is mandated to the government of the day. Still there are fundamental principles on striving to better the wellbeing of all citizens. Just like the revenue allocation is a policy item yet has equity clauses in the book. Note the duty I allude is to facilitate farmers with viable alternatives, not subsidies per se.
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I was mid deletion of some of what you have written when it occurred to me that the best response would be to leave it all intact.
I am glad that you finally admit that the Meru handout is all tribal politics by Uhuru. Now what is remaining is an unqualified apology from you for labeling "anti-Kikuyu".
I am however shocked that you give this tribal and discriminatory policy a clean bill of health and go ahead to unequivocally state that Uhuru needs not "excuse" himself for it? Where is tribalism and discrimination anchored in our constitution? Is EJK also part of our politics because it happens?
Uhuru may need solid tribal blocks and may feel the need to open his purse to them. It won't bother me at all as long as he uses his or Mama Ngina's billions ( loot from the extermination of Kenyan elephants throughout her life). Public funds cannot and should never be abused in that manner. I expected you to join me in opposing and condemning. Instead you provide the apology for Uhuru Kenyatta
Please clarify what you mean by Non-GEMA MPs not doing their job. Are the others doing theirs? Are MPs elected to defend National or tribal interests?
Much as I support Devolution I think it is overrated in relation to its capacity to counter GoK and its Apartheid tendencies. What percent exactly did the Counties get of the Euro-Bond or any other foreign fund / Aid? Consider just how much money that is and remember EVERY KENYAN will repay it. Clearly GoK has many ways of circumventing Devolution. Why Uhuru even spends money for them on wapende wasipende basis! Look at the Medical Equipment deal.
I am not against GoK assisting ALL farmers currently engaged in unproductive activities to shift to more viable activities. I am opposed to the blatant discrimination in it. I would like you to join me in condemning Uhuru Kenyatta and his government for perpetuating this discrimination against some of their citizens.
Yes Omollo, Jubilee favors Gema and RV as their piper. No excuses. Our "ideology" is tribe so while Obama may favor minorities or the poor, our leaders attend to their people. Unlike socioeconomic ideology that allows some wiggleroom, ethnicity is curved in the DNA leading to the PEV scenario.
Uhuru needs a solid Meru block so he unlocks the purse. He does not see such payoff in Bondo or Nyamira. Politics. This takes us to psychophancy and incompetence -- non-GEMA MPs will not do their job so this will stand.
Pundit has pushed here for 80% devolution for expediency. Well 40% seems to be the US, Germany, etc average. Germany has about 15% 'Equalisation' revenue share to ensure equity in living standards. Resource distribution is the driver of harmony or lack of it. Our new laws left 15% for the counties and a meagre 0.5% for equalization :( These are the basics that fell through the political cracks in Naivasha.
Yes, our government is tribal and only devolution and the regional balance clause protect non-Jubilee folks from rout. Sad but true.
SUBSIDIES... Economic policy is mandated to the government of the day. Still there are fundamental principles on striving to better the wellbeing of all citizens. Just like the revenue allocation is a policy item yet has equity clauses in the book. Note the duty I allude is to facilitate farmers with viable alternatives, not subsidies per se.
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Omollo apologize first for condoning neglect of poor farmers :D :D :D
Actually no, your opinion is just that so it does not affect them at all. I condemn tribalism and corruption past and present. Why would I apologize? I bear no responsibility for it, I have never worked in government. No, I am not gleeful, by "no excuses" I meant there are no excuses for tribalism.
We have parliament, courts, counties, commissions, civil society -- partly to provide checks and balances. Sometimes they work, sometimes they don't. Media should highlight corruption and it does. MPs should stop tribal or poor policies, they mostly don't. Judiciary should jail looters, they mostly don't.
Devolution should drive equitable development in the grassroots, let's give it time. Even without tribalism, development would be uneven for varied reasons. Devolution and equalization is an established global mechanism for equitable and grassroots (accessible services) development. In Germany, equalization has been used to uplift poor East states for decades. There is ongoing debate (in Germany) whether this practice should now change. In the US some state treasuries receive grants from the federal budget, it is a sort of equalization.
There are many evils in society not just tribalism and corruption; it is OK to be aggrieved but don't be hang up on them unless you can do something about it. We condemn, analyze and propose solutions to issues. We don't apologize as observers.
I called you anti-Kikuyu... get over it :D
In the miraa 1B case, it is specifically incumbent on the sugarbelt MPs to question objectively and lobby support to either reverse it or include their own farmers. Why would a Meru MP oppose it? You may call it tribalism, I call it representation.
I was mid deletion of some of what you have written when it occurred to me that the best response would be to leave it all intact.
I am glad that you finally admit that the Meru handout is all tribal politics by Uhuru. Now what is remaining is an unqualified apology from you for labeling "anti-Kikuyu".
I am however shocked that you give this tribal and discriminatory policy a clean bill of health and go ahead to unequivocally state that Uhuru needs not "excuse" himself for it? Where is tribalism and discrimination anchored in our constitution? Is EJK also part of our politics because it happens?
Uhuru may need solid tribal blocks and may feel the need to open his purse to them. It won't bother me at all as long as he uses his or Mama Ngina's billions ( loot from the extermination of Kenyan elephants throughout her life). Public funds cannot and should never be abused in that manner. I expected you to join me in opposing and condemning. Instead you provide the apology for Uhuru Kenyatta
Please clarify what you mean by Non-GEMA MPs not doing their job. Are the others doing theirs? Are MPs elected to defend National or tribal interests?
Much as I support Devolution I think it is overrated in relation to its capacity to counter GoK and its Apartheid tendencies. What percent exactly did the Counties get of the Euro-Bond or any other foreign fund / Aid? Consider just how much money that is and remember EVERY KENYAN will repay it. Clearly GoK has many ways of circumventing Devolution. Why Uhuru even spends money for them on wapende wasipende basis! Look at the Medical Equipment deal.
I am not against GoK assisting ALL farmers currently engaged in unproductive activities to shift to more viable activities. I am opposed to the blatant discrimination in it. I would like you to join me in condemning Uhuru Kenyatta and his government for perpetuating this discrimination against some of their citizens.
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Omollo,
I understand your beef here is stabex (coffee) and maybe this miraa deal (which is still hazy). I don't think gov gives subsidies to region but to crops. So if you grew coffee, had some co-op, like say in Kisii then you should qualify for coffee Stabex. The same is true for sugar farmers wherever they are located.Of course I agree that gov has in the past favored some regions, coffee & tea & livestock received special attention during Kenyatta & Moi regime but I won't take from Kikuyu or Gema that they are some of most hardworking farmers deserving of every support.
The issue is which crop in say Nyanza do you think has reached a level it deserve gov support. There is barely nothing happening there. That should be the start. Miraa has been doing well and deserve support now. Just like tea industry was asking gov for some support when the markets went haywire.
As far as I know...western and north rift politicians have used political muscle to force us to subsidize industries which have no business propping...we should import Brazilian cheap sugar...and find something we can do better...maybe Soya beans..maybe dairy....anything.....that we can produce cheaply.
Our sugar is more expensive than UG, TZ and of all places MALAWI sugar.
We cannot afford to subsidize agricultural activities.
There is a difference here: GoK may have supported the Sugar INDUSTRY by pumping in money which the likes of Kidero then share with the so called "donor". NOTHING has ever gone to the individual farmers.
Compare that to Kibaki writing off ALL the debts of coffee farmers and once more debts were accumulated, Uhuru comes and writes them off. Kikuyu farmers are in the Debt Writing Off business not Farming.
Do Sugarcane farmers have debts? Could they benefit from debt relief?
Most of the sugarcane delivered to the factories goes to service debts. From inputs to transportation of the very sugarcane and its harvesting. It is not unusual for farmers to get a pay slip and zero cash.
What I need to know is why Kikuyu Presidents (Not Moi) see it fit to repay the individual personal debts of Kikuyu farmers and not those of Luo and Luhya farmers.
Note also that Pundit has fudged the facts.
1. The Government of Kikuyus (GoK) gives grants to Kikuyu farmers and not loans
2. The same GoK gives LOANS to Sugarcane FACTORIES NOT farmers
I would have less to say if the farmers were treated equally.
About unprodutivity: There are many factors causing this not least GoK. As the owner GoK appoints incompetent managers for these factories. When Mumias was under the Booker Management it made profit and upon handing over GoK embarked on its usual thievery.
The Sudanese and Egyptian factories benefit from government subsidies. Brazilian factories produce sugar as a by-product.
Stabex for coffee is just account receivable financing and its not a grant but a loan that's deducted upon payment of coffee https://www.co-opbank.co.ke/agri-cooperatives/stabex-fund . The loans that have been cancelled by government were loans that KPCU or myriads of cooperatives took out. The only solution to coffee industry in kenya is full liberalisation just like what the brilliant Julius kones proposed for Tea sector. The good thing is farmers have rapidly shifted from coffee to macadamia farming (fully liberalised)and are fetching good prices with minimal labour and farm inputs.
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This MP must have read this thread:
Balambala MP Abdikadir Aden has faulted President Uhuru Kenyatta's move to allocate Sh1 billion to revive miraa business and cushion farmers against the ban on miraa export to the UK.
Speaking to the Star on the phone, Aden said support of the trade raises moral questions because of the health implications miraa has had on people in Northern Kenya and the coastal region.
“Miraa has ruined lives of many youth in the two regions. It is insensitive of the Jubilee government to continue supporting growing and selling of this drug, yet some countries have classified it as a dangerous drug. The UK has even banned it's export to the country,” Aden said.
He added: “The government should instead introduce laws that regulate the trade and consumption of miraa like all other drugs. A responsible government would be mindful of the welfare of its citizens and invest in countering the sale and growth of drugs and not subsidise them."
The MP said as a representative of the people from “a region most affected by miraa" he disapproves plans to support it.
Aden urged Jubilee to rethink its action if it cares about the well-being of Kenyans in Northern and Coast.
“We the people of NEP and Coast must challenge this move and even boycott the consumption of this dangerous drug, which is now enjoying the funding from the taxpayers' money,” he said.
Aden said Northern region should come up with initiatives to rehabilitate youth affected by miraa and measures to stop its consumption like the rest of the world.
http://www.the-star.co.ke/news/2016/04/25/balambala-mp-faults-jubilees-miraa-funding_c1337996