The sugar sub-sector has suffered from problems including high cost of production, debt, acute cane shortage, and declining yields.
The Kenya sugar sector faces collapse, putting at stake the survival of an estimated 25 percent of Kenya’s population who depend directly or indirectly on the industry for livelihood.
According to the association of manufacturers, KAM, the government, through inadequate regulations, has allowed flaws for sugar cartels to exploit.
Sugar, compared to other agricultural commodities, is highly volatile, posing a challenge to policymakers, especially in price regulation. Brazil is the largest producer of sugar followed by India. Others are the European Union (EU), China, Thailand, South Africa and the US.
The sugar sub-sector has suffered from problems including high cost of production, debt, acute cane shortage, and declining yields.
The Kenya sugar sector faces collapse, putting at stake the survival of an estimated 25 percent of Kenya’s population who depend directly or indirectly on the industry for livelihood.
According to the association of manufacturers, KAM, the government, through inadequate regulations, has allowed flaws for sugar cartels to exploit.
Uncontrolled importation of the commodity and smuggling pose serious problems to the already dying industry.
According to the Ethics and Anti-Corruption Commission (EACC), poor governance and management challenges are manifested in the way decisions are made and implemented by key actors on matters of sugar importation, privatisation, and other international agreements affecting the sector.
In liberalised economies, government intervention should be minimal in making economic decisions. However, when it comes to issues that directly affect food security and protection of local industry, it is incumbent upon the State to act in the interest of the nation and its people.
The World Bank says government interventions to stabilise sugar prices can crowd out international markets as risk management instruments and inhibit the development of domestic risk management practices.
Conversely, the international markets for risk management offer opportunity to mitigate the consequences of volatility introduced by domestic reforms.
In Poland, the 1994 Sugar Industry Act provided a stable and profitable environment for the industry during the privatisation. Kenya must move with speed to finalise and publish the Sugar Act and establish an efficient regulatory system.
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