Cane farmers declare zoning illegal unless given waiver by competition authority

Cane farmers under their umbrella lobby group, Sugar Campaign for Change (SUCAM) are opposing the proposed amendments to the agriculture and food authority act 2018 that seeks to introduce cane zoning.

According to SUCAM, the proposed law is designed to benefit private millers at the expense of government-run sugar companies. As a result, it would require an express waiver by the Competition Authority.

Farmers will be forced to conform to the price set by their local enforced mill, which is a breach of the Competition Act that prohibits restrictive trade practices and anti-competitive agreements.

“Forcing farmers to sell to a single buyer, who will be the only miller they can sell to, offers no remaining scope for market forces,” said Michael Arum, SUCAM Coordinator.

“For farmers in areas with poorly performing mills, any mill mismanagement will mean that their own livelihoods are ruined. They cannot seek other sellers or better prices. In effect, they will simply work for a single mill, and without ever having signed a contract to do so, but by regulatory dictate.”

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They claim the proposed amendments is a breach of COMESA rules that prohibit the introduction of a contract, agreement or understanding that is anti-competitive or substantially lessens competition within the common market.

“Imposing a single buyer contract on farmers will, in fact, drive many Kenyan farmers away from sugar production. It means farmers must produce without any possibility of selling their produce freely, versus switching to producing other crops entirely,” said Saulo Busolo, SUCAM Chairman.

The lobby group said the move rekindles what was witnessed in the past when cane farmers in Mumias, Sony, Chemelil, Muhuroni and Nzoia incurred losses when a similar move was implemented.

“The zoning caused delayed payments, currently totaling to Sh2.6bn, and hit the development of ratoon crops. As a result, many farmers, especially in Mumias, abandoned cane farming and the poverty index soared in the sugarcane growing areas,” read part of the lobby’s statement.