New sugar levy brings hope to Kenyan farmers in troubled sector
By Maureen Kinyanjui |
The Sugar Act is expected to significantly benefit stakeholders and enhance the competitiveness of Kenya's sugar industry.
Kenyans will soon pay an additional Sh4 for every Sh100 spent on sugar as part of a new sugar levy designed to revitalise the struggling farming sector.
This is after President William Ruto on Friday assented to the Sugar Bill, 2022.
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This legislation aims to implement significant reforms to address long-standing challenges in the industry, including mismanagement, inconsistent pricing, and competition from cheap imports.
The Sugar Bill passed through the National Assembly and received Senate approval, positioning it as a critical step towards the establishment of a Sugar Development Fund and the re-establishment of the Kenya Sugar Board.
This board will play a vital role in overseeing the regulation, development, and promotion of the sugar industry.
"The Bill provides for enhanced and structured funding for the work of the Board," a key provision states.
The funding will comprise money appropriated by the National Assembly and the newly introduced Sugar Development Levy, which will be collected from domestic sugar sales.
This levy is capped at four per cent of the value of domestic sugar and four per cent of the Cost Insurance Freight (CIF) value for imported sugar.
Sponsored by Navakholo MP Emmanuel Wangwe, the law proposes that 30 per cent of the collected levy be allocated to improvements in the sugar sector.
This funding will support factory development and rehabilitation, enhance research and training at the Kenya Sugar Research and Training Institute, and improve infrastructure for sugarcane farmers.
In addition to establishing the Kenya Sugar Board, the law also introduces a Sugar Arbitration Tribunal to resolve disputes related to cane pricing and contracts.
This tribunal aims to address cases within a 90-day timeframe, offering a quicker resolution to ongoing conflicts in the sector.
"Enactment of the Bill will facilitate the transformation of the sugar sector, which has been adversely affected since 2013," Wangwe said.
With these new regulations, enhanced oversight, and a focus on research and development, the Sugar Act is expected to significantly benefit stakeholders and enhance the competitiveness of Kenya's sugar industry.
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