Stakeholders are currently discussing the formation of a new pricing committee aimed at setting fair rates for sugarcane acquisition from farmers by millers. This initiative follows a stalemate between millers and farmers over sugarcane pricing, with some millers delaying payments to farmers for up to three weeks, reported The Saturday Standard.
While farmers are demanding Sh5,900 per ton as per a court order, millers are adamant about paying Sh5,100 per ton.
The idea emerged from a meeting convened by Sugar Directorate head Jude Chesire and chaired by Agriculture Principal Secretary Paul Rono, aiming to prevent future conflicts.
“There are ongoing good faith consultations between the farmers and the Sugarcane Pricing Committee (SPC) to resolve the cane payment stalemate caused by the High Court order in JR Misc. E 047 of 2024 on April 24, 2024,” stated the resolution from the meeting held in Nairobi on Tuesday and Wednesday.
“By the Constitution of Kenya 2010, a policy review process for the sugarcane pricing formula, involving all stakeholders, will be initiated. This review process is expected to take six months from the date of this meeting.”
Currently, sugarcane prices are determined by a formula considering cane weight, net ex-factory sugar price, and farmer-sharing ratio. However, farmer representatives Charles Atiang and Simon Wesechere argue that this formula is flawed as it largely depends on sugar prices, excluding other co-products such as molasses and electricity.
Farmers have also expressed concerns about the interim SPC, claiming that a farmer representative was selected by them but appointed by the AFA Directorate, effectively making them puppets of the millers, thereby increasing miller representation on the committee from the specified two members to four.
“It is encouraging that millers are finally acknowledging, albeit belatedly, that human beings have rights. We remind them of how they have long oppressed our rights. Among all cash crops in this country, only sugarcane farmers bear the cost of transporting raw materials from the farm to the factory, which consumes 40 per cent of gross income,” said Wesechere.
Millers had threatened to halt operations following a court ruling that farmers should be paid Sh5,900 per ton, arguing that setting prices is the SPC’s prerogative, not the courts.
Atiang filed the case before Justice Jairus Ngaah due to grievances over a price reduction stipulated in a circular issued by the interim SPC last month. The circular reduced the price from Sh6,020 to Sh5,100 per ton, effective April 8, 2024.
In his affidavit, Atiang contended that the committee’s decision failed to consider factors such as inflation, the influx of imported duty-free sugar, and rising production costs.
