The Agriculture Ministry has ordered millers to increase sugarcane prices paid to farmers.
Invoking the Crops (Sugar) (General) Regulations, 2020, the Ministry says having considered the prevailing ex-factory sugar prices over the past three months (August – October 2021) and the current upward trend in the price of sugar, the sugarcane pricing committee resolved to base the cane price on the average ex-factory sugar price of Kshs.4,770.00 per 50kg bag for October 2021.
The Committee, therefore, approved an increase in the price of cane from the current Ksh.3,833 per tonne to Ksh.4,112 per tonne, effective from 18th November 2021. The Ministry says sugarcane price calculated using the simplified formula is largely dependent on the sugar prices as all the other parameters are fixed over a longer timeframe.
The Ministry directs the millers to adhere to the new prices while making payments to the farmers and asks any farmer being paid less to report to the Agriculture and Food Authority (AFA) for redress. The Crops (Sugar) (General) Regulations, 2020 specifies the various requirements for contracts/agreements between cane growers and millers, handling, and supply of sugarcane. The regulations provide for a Sugarcane Pricing Committee responsible for developing the cane pricing formula and reviewing cane prices. The payment for cane on the basis of set prices shall be done weekly according to the Ministry.
According to the Ministry, the sugar industry has witnessed a steady increase in sugar production due to enhanced investments by both the Government and private sector players. Cumulatively, sugar production in January – October 2021 was 577,807 tonnes compared to 514,727 tonnes produced in the same period last year, indicating a 12% increase.