Uhuru sweetens sugar sector revival with Sh40bn write-off

President Uhuru Kenyatta at the Nairobi International Trade Fair on October 2, 2015. PHOTO | JEFF ANGOTE | NATION MEDIA GROUP 

In Summary

• Nine factories set to be privatised will get Sh4.4 billion for repairs.
• The President said the revival plan was costly but a “bitter pill to swallow to improve farmers’ lives by enabling them earn from sugarcane farming”.
• The President said the government has also established a Sh3 billion Fertiliser and Seed Development Fund to ensure farmers get quality seeds.

By PSCU
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By JAMES KARIUKI
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President Uhuru Kenyatta has announced a major bailout plan to revive the sugar industry.

Speaking at the Nairobi International Trade Fair on Friday, President Kenyatta said a total of Sh39.7 billion would be used to write off debt owed to the Sugar Development Levy Fund by sugar millers set for privatisation.

In the last 24 months, the Sugar Development Fund disbursed Sh1.4 billion to purchase equipment for nine millers.

President Kenyatta said the fund also released Sh1.2 billion for cane development, Sh2 billion for farmers credit and grants, and an additional Sh1.5 billion to repair sugar factories.

The government has also set aside Sh5 billion for improving farming infrastructure.

The President said the revival plan was costly but a “bitter pill to swallow to improve farmers' lives by enabling them (to) earn from sugarcane farming”.

SUBSIDIES

President Kenyatta said the government is also implementing policies that will address the high cost of agricultural inputs, citing enacting and enforcement of regulations that will lower the cost of capital and financial services for farmers and promote agro-processing and value addition.

“My government recognises that agriculture is and will continue to play a key role in realising the twin objectives of poverty reduction and shared prosperity as enshrined in our Constitution and our blueprint Vision 2030,” he said.

The President emphasised that the government’s subsidy scheme will continue to cushions farmers against high input prices.

Under the subsidy programme, the prices of fertiliser have been reduced from Sh3,700 to Sh1,800 for DAP (diammonium phosphate) and from Sh2,700 to Sh1,500 for CAN (calcium ammonium nitrate).

More than 206,000 tonnes of fertiliser has been distributed through the National Cereals and Produce Board to farmers this year.

“My government subsidised this fertiliser at a cost of Sh3 billion,” President Kenyatta said, adding that groundbreaking for the construction of a fertiliser factory was done last month in Uasin Gishu County.

GALANA-KULALU HARVEST

In line with the Jubilee administration’s pledge to reduce dependence on rain-fed agriculture, President Kenyatta said the area under irrigation has increased.

“Last year, through the Expanded National Irrigation Programme, my government rehabilitated and expanded national irrigation schemes by approximately 25,000 acres,” President Kenyatta said.

The President said the government has allocated Sh13 billion to complete 175 irrigation projects this financial year to bring an additional 42,500 acres under irrigation.

He observed that the Galana-Kulalu irrigation project is on course and the first crop was harvested a few weeks ago.

“We have now signed agreements with our partners in Israel for partial funding and technical assistance, and we look forward to the success of what amounts to the most ambitious irrigation project in the history of this nation,” he disclosed.

SEED FUND

The President said the government has also established a Fertiliser and Seed Development Fund to ensure farmers get quality seeds.

The initial investment is Sh3 billion, which will be increased gradually to Sh15 billion in the near future.

“In the meantime, we have ensured that there are enough subsidised seeds to match this planting season’s requirements,” the President said.

This financial year, the government allocated Sh77 million for various high-value crop and planting materials to be distributed to farmers for the short and long rains.

A further Sh375 million to promote crop diversification across the country has also been set aside.

President Kenyatta said these efforts —combined with the tireless diligence of farmers — have ensured a bumper harvest this year.

“We expect 43 million bags of maize this year, up from 38 million last year. We would have had even more, had it not been for the lethal Necrosis disease that struck some maize farms,” President Kenyatta said.

While encouraging farmers to work with extension service officers in their counties on how to fight the maize disease, the President expressed satisfaction that research has identified promising disease-resistant varieties, which will soon be released to farmers.

He said there is a one-stop screening facility at the Kenya Agricultural, Livestock and Research Organization in Naivasha. 

COFFEE

On coffee, President Kenyatta cited liberalisation of the marketing and milling of coffee, debt waivers to farmers and the establishment of the Commodities Fund — which has to date disbursed over Sh2 billion to 80,000 beneficiaries — as part of the government’s initiatives to improve the sub-sector.

Acting Agriculture Cabinet Secretary Adan Mohamed thanked Zambia and East African countries that are taking part in the trade fair.

Zambia is participating for the first time.

Nairobi Governor Evans Kidero said the county government is building the largest Jua Kali market in the country at the junction of Kangundo and Outer-Ring roads.

Acting ASK national chairwoman Annabella Kiriinya said 93 foreign countries, including China, Nigeria, Zambia and Iran, are participating in the trade fair.