Kenyan sugar output rises as reforms bear fruit

Kenyan sugar output rose by 29 percent in the first six months of 2004 against the same period last year, as measures initiated by the government to reform the industry paid off, President Mwai Kibaki said on Tuesday.
Production rose to 290,030 tonnes in January-June this year from 224,337 tonnes in the same period last year, Kibaki told a meeting in Nairobi seeking to address problems in the sugar sector.
Kibaki said the improvement was mainly due to government reforms aimed at resuscitating the ailing sector, including paying farmers on time for cane delivery and restructuring debts incurred by sugar factories.
Kenya's peasant sugar growers have long complained of prolonged delays in payments for cane delivered to local factories, which are burdened with huge debts, outdated machinery and poor management.
"The implementation of debt restructuring has improved the performance of the majority of sugar companies. Today, farmers are receiving their payments on time and some of our sugar companies have started posting profits", Kibaki said.
But Joash Wamang'oli a sugar farmer in western Kenya said that peasant farmers were still suffering despite government efforts.
"Yes farmers are being paid, but at a very low price. We are still suffering in poverty as the millers (factories) post profits. We need to get returns on our land," he told Reuters.
Cane farming is the major employer in the impoverished western Kenya where over 100,000 peasant farmers grow up to 85 percent of cane.
Kibaki urged industry players to urgently seek measures of reducing production costs before February 2008, when the industry will face a flood of cheap imported sugar, from neighbouring countries.
Kenya's annual sugar consumption is estimated at 650,000 tonnes with the country producing about 450,000 tonnes.
The deficit of 200,000 tonnes is met through imports, mainly from the Common Market for East and Southern Africa (COMESA) countries.
The country currently allows the 200,000 tonnes to be imported under the COMESA zero tariff system, which will end in 2008 paving the way for unlimited importation of sugar.
"If we are going to survive, we need to produce sugar at a cheaper price then we are able to do at the moment, because we have producers next to us who are already producing cheaper than we are," Kibaki said.
"We do not have time, we have three years left, and we will not be able to stop our neighbours from providing us with sugar", he said.