The Kenya Sugar Manufacturers Association has threatened to shut down operations from Friday, May 10, 2024.
In a statement directed to the Ministry of Agriculture and the Agriculture and Food Authority (AFA), the Association cited a breach of contractual agreement between them and the sugarcane farmers.
The Association referred to a court ruling delivered on April 24 directing millers to pay cane farmers Ksh5,900 for every tonne delivered.
Jayantilal Patel, the Association’s chairman opposed the ruling that increased the price up from the Ksh.5,100 per tonne that had been set by the cane pricing committee on April 8, 2024.
The millers argued that the price was an infringement of the contractual arrangements between them and the farmers.
Additionally, the Association said the increase violates the mandate of the cane pricing committee adding that it will cause far reaching financial implications on the part of millers.
“The price set by the court is unsustainable in the economic situation and infringes on the contractual agreement between us and farmers,” read the statement in part.
Closure to Affect Sugar Industry
Further, the association indicated that their planned closure would lead to loss of revenue topping Ksh.2 billion monthly and loss of 30,000 jobs.
They also indicated that the shut down a decline in the trading of sugar and loss of income to farmers.
According to Patel, farmers will lose an average of Ksh.3.6 billion they acquire from the supply of cane to millers on a monthly basis.
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However, farmers who addressed the media maintained that they are moved by the miller’s threats.
Chair of the Kenya Association of Sugar and Allied Products, Charles Atiang said the millers can shut down operations if they want, adding that the companies cannot operate without farmers.
“We are saying we are not moved by those threats from the millers, let them go ahead and shut those mills if they want…for all we know, there is no miller without the farmer…there is no worker without the farmer,” he said.
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Farmers Challenge Committee Prices
The Cane Pricing Committee reduced the price per tonne from Ksh6,020 to Ksh5,100 per tonne, effective April 8, 2024.
Atiang filed a case under certificate of urgency challenging the price reduction in the price per tonne of sugarcane as stipulated by the committe.
The Court ruled in favor of the farmers and increased the price per tonne from Ksh5,100 set by the committee to Ksh5,900.
It remains to be seen whether the millers will make good their threat and what the implication will be to the availability of sugar in the market.
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