In 2010, Justice Martha Koome said Kenya was a free-market economy and farmers were free to sell their produce to a miller of their choice.
The ruling, in a raging court case between two sugar millers, meant that private and government factories were free to buy cane from farmers, most of who had been held hostage by millers who never paid on time.
State-owned companies have been attempting to reintroduce zoning via the recently gazetted Sugar (General) Regulations, 2018.
Farmers are opposed to zoning as they would forgo the freedom of choosing where to sell their cane.
A number of proposed factories in some zones are already dead — something that could give particular millers monopoly in a bigger belt.
At the moment, zoning remains one of the most revisited topics in the sugar belt. It receives support and opposition in equal measure, depending on who one asks.
While public factories regard zoning as the ultimate solution to the ‘invasion’ by privately-owned mills, which began operations just a few years ago, the private firms regard the practice as a lame excuse to hand undue advantage to badly-run companies.
The private millers have the backing of farmers.
Zoning remains a hot clause in the sugar regulations and will shape the way the document is received in Parliament.
Many believe the document has been the missing guide in the sugar industry.
Already, there is heavy lobbying by those who support or oppose the document, which ended public participation in August, and is awaiting final reshaping before presentation to the National Assembly.
According to the draft regulations, no new factory will be allowed in another miller’s registered zone.
It means those with weighbridges outside their zones would have to move them.
State-owned factories believe zoning is their only saviour in regard to securing their raw material planning. It enables them to know what volumes of cane to expect in which season and when it is altered.
Most usually stall due to lack of cane.
The public millers also say they have made direct and indirect interventions and support to ensure they have enough cane from their catchment areas and the “invasion” has financial implications.
“We have lost up to Sh2 billion worth of sugar cane through poaching in the last five years. It’s taking a toll on us because sugar production is essentially 60 per cent agricultural.
“The remaining percentage is in processing. They are reaping where they never sowed,” South Nyanza Sugar Company corporate planning and strategy manager Eliud Owuor said.
The millers argue that the collapse of zoning is responsible for the little support farmers get in growing the capital-intensive crop since no one wants to commit on cane-growing.
The farmers, on the other hand, are happy because the absence of the zoning gives them the freedom to market their produce.
It allows them to sell to whoever pays promptly or higher.
After years of delayed payment and difficulties to even have their crop harvested when mature, farmers found freedom when private millers set up off-site weighbridges and cane collection centres.
Mr Moses Osoro, for example, has only known sugarcane farming in his entire life. He took up the venture after high school, attributes his success to private millers.
He says private firms revived his hopes and made him expand his farming business by leasing land in Fort-Ternan and Koru.
“I should be free to choose who to sell my cane to. It is unfair to restrict me to a company that does not pay on time. This is our way of life and the only source of livelihood,” Mr Osoro said as he ploughed his new plot with his tractor, the second he has bought in five years.
“I’m expanding this much because a private miller set up a cane collection centre near my home. I am told another is looking for a place to set up a weighbridge.”
The farmers, however, stand accused by State-owned millers of exploiting the loopholes provided by private firms.
The government factories say private companies take the cane at high prices yet farmers are supported to grow their crop by the State firms.
In the process, the money they owe the government millers is never repaid.
The farmers may then stop growing cane, fearing that the debt may be recovered at some point.
This creates the overall shortage responsible for the stops of the mills and by extension the delayed payments.
The public mills also claim the poaching game has opened floodgates for bad industry practices like harvesting immature crop.
Muhoroni Sugar Company Joint Receiver-Manager Francis Ooko said harvesting immature cane is bad even for the private millers.
“One even wonders what their rationale is because immature cane does not produce sugar. We also end up with a disrupted cane supply. That is why we feel the millers should have a demarcated region to source,” Mr Ooko said.
Another economic puzzle in the zoning debate surrounds the business sense behind trucking cane for more than 200 kilometres.
Those in support of zoning believe it is not economical to transport cane from the far flung areas, pay premium for it, mill and sell then sugar at a cheaper prices while paying farmers promptly.
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Publish date : 2018-12-28 12:14:18