A sugar task force wants the regulator to make public the names of importers alongside the quantities they are allocated as one of the ways of addressing low earnings for farmers.
A report of the technical working committee on the design, development, and implementation of the sugar industry price stabilisation framework points out that lack of transparency enables dumping of the sweetener locally, hurting farmers’ earnings.
Releasing the report on Monday, the task force said the Sugar Directorate should work with other agencies such as the Kenya Revenue Authority to seal the loopholes that have seen huge volumes of the sweetener smuggled into the country for lack of transparency.
“Streamlining sugar importation requires the development of transparent criteria for issuance of import permits including regularly publishing names of firms issued with import permits as well as the quantities to be imported,” said the task force.
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For many years, the names of firms and individuals importing sugar have remained a secret.
The committee said there is serious competition from low-cost sugar produced within Comesa countries and low world market prices when compared with local production.
Local sugar has been expensive on the account of the high cost of production with a tonne of cane costing $900 when compared with the $500 that a farmer in Mauritius will incur.
Kenya is allowed to import up to 350,000 tonnes of sugar from the Comesa countries to bridge the local deficit.
Local millers and farmers have complained the government allows more imports than what is required.
The committee said in sugar marketing and trade, opaque pricing and in-country flows of lawfully imported as well as contraband sugar have the most significant impact on the final price of sugar.
The task force also says that farmers’ incomes will improve if policy interventions address distortions and inefficiencies in sugarcane production, harvesting, and transportation. Farm-level inefficiencies account for nearly a third of the loss in productivity.
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“Transport cost is the farmers’ single largest cost, accounting for 22 percent of total farmer costs, excluding the cost of the five percent cane lost through spillage en-route to trans-loading sites or the mill-gate, depending on who transports the cane to the mill,” said the committee.