Farmers and millers in talks to resolve sugarcane price dispute
Stakeholders are forming a new pricing committee to set fair sugarcane rates. This follows a deadlock between millers, who want to pay Sh5,100 per ton, and farmers demanding Sh5,900 per ton per a court order. Convened by Sugar Directorate head Jude Chesire and chaired by Agriculture Principal Secretary Paul Rono, the initiative aims to prevent future standoffs, with a policy review projected to take six months.
Stakeholders are in talks to establish a new pricing committee tasked with setting fair rates for sugarcane acquisition from farmers by millers.
The move follows a deadlock between millers and farmers regarding the pricing of sugarcane, with some millers delaying payments to farmers for up to three weeks. As farmers demand Sh5,900 per ton as per a court order, millers insist on paying Sh5,100 per ton.
A meeting convened by Sugar Directorate head Jude Chesire and chaired by Agriculture Principal Secretary Paul Rono came up with the initiative to forestall future standoffs.
“There are ongoing good faith consultations between the farmers and the Sugarcane Pricing Committee (SPC) to resolve the cane payment stalemate occasioned by the court order in the High Court in JR Misc. E 047 of 2024 April 24, 2024,” reads the resolution of the meeting held in Nairobi on Tuesday and Wednesday.
“In line with the provisions of the Constitution of Kenya 2010, the process of policy review of the sugarcane pricing formula involving all stakeholders will be initiated. The timeline for this process of policy review is projected to take six months from the date of this meeting.”
The current sugarcane prices are based on a formula that takes into account cane weight, net ex-factory sugar price and farmer-sharing ratio. The downside of this formula, farmer representatives Charles Atiang and Simon Wesechere say, depends largely on sugar price leaving out other co-products such as molasses and electricity.
Farmers complained that the interim SPC had a farmer representative handpicked by themselves and handed over to AFA Directorate for appointment “effectively making them puppets of the miller and in essence, making miller representation at the committee to be four rather than specified two members.”
“It is a good thing for millers to realize, belatedly though, that human beings have rights. We remind them of how they have ‘sat’ on our rights for far too long to the extent that of all cash crops in this country, it is only sugarcane farmers who transport manufacturers’ raw material all the way from the farm to the factory at a whopping 40 per cent of gross income,” said Wesechere.
The millers had threatened to shut operations following a court ruling to the effect that farmers should be paid Sh5,900 per ton for their cane, saying the mandate of setting prices was a reserve of the SPC, not the courts.
Atiang filed the case before Justice Jairus Ngaah citing grievances over the reduction in the price per ton as stipulated in a circular issued by the interim SPC last month.
According to the circular, the price was reduced from Sh6,020 to Sh5,100 per ton, effective April 8, 2024.
In his affidavit, Atiang said the decision of the committee did not consider factors such as inflation, influx of imported duty-free sugar and rising production costs.
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