President William Ruto last week signed into law the Sugar Act, 2022, ending more than two years of delay in enacting legislation, which introduces drastic changes in the sub-sector.
The Bill was introduced in the National Assembly by Navakholo Member of Parliament Emmanuel Wangwe in 2022 but its enactment faced years of delay due to a ping-pong between lawmakers in the National Assembly and the Senate.
Some of the issues that the two houses were contesting over werethe rate of the Sugar Development Levy that has been introduced by the law, how monies collected from the kitty will be used and establishment, composition and roles of the new sugar parastatals.
Last month, a joint mediation committee comprising the Senate and National Assembly was formed to address the impasse surrounding the Bill.
How will the Sugar Act, 2022 affect sugar prices?
Local sugar prices will likely increase due to implementation of the Act, which has introduced a Sugar Development Levy charged at four percent of the total value of sugar imports.
The Cabinet Secretary for Agriculture will also publish a gazette notice imposing a levy on locally produced sugar.
Importers and local millers will pass on the additional cost to consumers. The sugar levy will be used to run operations of the Kenya Sugar Board, Kenya Sugar Research Institute (KSRI), price stabilisation for sugar growers and infrastructure development in the sector.
Who regulates the sugar industry in the new Act?
The Sugar Act, 2022 has reinstated the Kenya Sugar Board as the top-most decision-making entity on matters relating to the subsector.
It was disbanded by the Agriculture, Fisheries and Food Authority Act, 2013 and converted to a directorate under the Agriculture and Food Authority (AFA). This means that AFA is no longer the regulator of Kenya’s sugar industry, a role it has been undertaking over the last 11 years.
What is the role of the Kenya Sugar Board?
The Kenya Sugar Board will now be undertaking 21 key roles in the industry, including the licensing of sugar millers, developing and implementing policies for the sector. The board will oversee licensing of sugar exporters and importers and will act as an intermediary between the government and sector players.
Who will sit on the board?
The Kenya Sugar Board will comprised a non-executive chairperson elected by the board from among representatives of growers and appointed by the Cabinet secretary, five representatives chosen by farmers from each sugar catchment area and one representative elected by sugar millers.
It will also have the Agriculture PS, National Treasury PS, a nominee of the Council of County Governors, and the chief executive officer.
Which are the listed sugar catchment areas?
The Act has listed five sugar catchment areas. Each of the zones will elect a member to represent them in the Kenya Sugar Board. These areas are Rift Region (Kericho, Nandi and Uasin Gishu), Upper Western (Bungoma, Trans Nzoia) and Lower Western Region (Busia, Kakamega, Siaya and Vihiga).
Others are Southern Region (Homa Bay, Kisumu, Migori and Narok) and Coastal Region (Kwale, Lamu and Tana River).
How will the staff of the Sugar Directorate be affected?
According to the Act, all workers of the Sugar Directorate who have not been fired or resigned will be transferred to the Kenya Sugar Board. The Act states that the workers will “become a staff of the board on their current improved terms and conditions of service”.
How will sugar research be done under the Act?
The Sugar Act, 2022 has established the Kenya Sugar Research Institute (KSRI) which has been tasked with undertaking all research work on the crop in the country. It takes over the role from the Sugar Research Institute, which is one of the 18 institutes under the Kenya Agricultural & Livestock Research Organisation (KALRO).
KSRI will promote and regulate research in sugar and sugar diseases, facilitate access to research information and resources, and breed sugarcane varieties suited for various agro-ecological areas of Kenya.
What does the Act say on privatisation of public sugar mills?
The Act has reserved at least 51 percent of shareholding in privatised sugar mills for growers. Farmers have also been reserved at least 51 percent of the positions on the boards of directors of privatised mills. At the same time, all private sugar mills are required to have a representative of the growers on their boards.
Who will solve disputes among sugar stakeholders?
The Act establishes the Sugar Arbitration Tribunal which will hear and determine disputes among sector stakeholders. The tribunal will consist of a chairperson appointed by the Chief Justice and four other members.
It will determine disputes between sugarcane farmers and out growers, millers, or interest parties.
