Cane farmers have asked the government to rethink their intent to scrub off the Sugar Development Levy (SDL) that is set to take effect in June this year as announced by the National Treasury in this year's budget.
The farmers have said most millers are debt-ridden and will suffer more if the recent move is implemented without the government giving an alternative for funding the functions supported by the levy.
Kenya National Sugarcane Farmers Union (KENSFU) Deputy Secretary Atiang’ Atyang’ asked the National Treasury to suspend the move to allow negotiations seeking a replacement for the fund from which over 6 million sugarcane farmers benefited through their sugar millers.
“The government should reinstate the levy tentatively and give room for negotiations for alternative funding. Millers and farmers obtained funds from the levy for sustainability of their operations. Alternatives should have been sought before having the directive in force,” said Mr Atiang’.
Atiang yesterday told Hivisasa that the recent budget will not benefit cane farmers given that state-owned millers from the Nyanza region were still in dire need of a bailout of over Sh59 billion from the government.
He said the sector will be exposed to further operational challenges as phasing out the levy will paralyse sugar research, maintenance of feeder road networks, factory maintenance and administration.
He added that Chemilil sugar was joining Miwani and Muhoroni in the trail of receivership and collapse given that its license expired in May and had not been renewed.
The sugar industry in Kenya has not been a prosperous one in the recent past after the country's leading sugar maker Mumias Sugar sank into debt.