EU gives Sh6.3 billion in support of sugar industry
Posted Sunday, July 8 2012 at 16:19
The sugar industry got a major boost after the European Union donated Sh6.3 billion in support of a project aimed at increasing productivity in the sector.
The programme, to be known as the National Sugar Adaptation Strategy for Kenya (NAS), is set to improve the sugar market and reduce the cost of production.
It will also support trade and marketing and lead to the privatisation and restructuring of public millers, expansion of sugar factories and introduction of new crop varieties.
“We are excited and grateful for the funding of this programme because it is going to make our industry competitive through improvement of efficiencies and reduction of costs,” said Kenya Sugar Board (KSB) mechanical engineer Richard Magero during a workshop forsugar stakeholders on Friday.
A background presentation of the project showed that the government started implementing it in 2007 but failed due to financial hiccups.
The presentation also demonstrated that sugar prices had skyrocketed over the years due to declining production.
“About five years ago the GoK started implementing NAS and it was believed that the sugar sector could achieve 90 tonnes per hectare, but by 2012, the production of sugar has still not recuperated,” the report of the preliminary findings stated.
It also revealed that farmers felt demotivated due to the many deductions and little pay from millers.
Mr Magero noted that KSB and the Kenya Sugar Research Foundation embarked on the project after a research identified crucial challenges affecting the growth of the sugar industry among them privatisation of government-owned sugar mills, poor infrastructure insugar cane growing areas, poor cane yields, inadequate training of factory staff, weak sugar research foundation, weak environmental improvements and poor funding for policy support.
He said the financial support will help in improving infrastructure, building capacity of outgrower organisations and strengthening the sugar research institutes.
Joseph Kariuki, a socio-economic expert involved in the implementation of the project warned that sugar producers may get out of business if the NAS project is not supported continuously because of government policies of importing sugar through Comesa.
The EU will fund the project for a three-year period.