Kenya’s sugar sector shows promise as Mumias Sugar disburses US$1.16M bonus to cane farmers

KENYA – Mumias Sugar Company has issued a Ksh 150 million (US$1.16M) bonus to sugarcane farmers, marking a milestone in Kenya’s efforts to revive its ailing sugar sector. 

The announcement was made by President William Ruto during a high-profile event at the company’s headquarters, signaling progress in reforms aimed at revitalizing the industry and boosting farmers’ livelihoods.

Speaking at the launch, President Ruto highlighted the success of ongoing interventions, noting that last year’s production reached a record 832,000 tonnes. He expressed optimism that Kenya is on track to achieve surplus sugar production by 2026, paving the way for regional exports.

“The bonus payment to farmers demonstrates the effectiveness of our reforms. We are transforming sugarcane farming into a profitable venture that uplifts thousands of livelihoods across the country,” he stated.

Sugar reforms in motion

Central to these reforms is the enactment of the Sugar Act 2024, which aims to streamline operations within the sector. 

The law establishes sugarcane catchment areas to improve supply management, enhances milling efficiency, and introduces regulations ensuring farmers receive timely payments. 

Bonuses are now pegged to sugarcane deliveries, with individual farmers entitled to 50% of annual rents paid to the Kenya Sugar Board, distributed based on their supply volumes.

Additionally, the government has implemented measures to reduce financial strain on stakeholders. 

This includes writing off Ksh 117 billion (US$903.5 M) in industry debts, clearing Ksh1.7 billion (US$13.13M) in farmers’ arrears, and settling Ksh 650 million (US$5M) owed to employees. A subsidized fertilizer program is also underway to boost sugarcane yields.

“We are committed to ensuring farmers and workers benefit fully from these reforms,” President Ruto remarked. 

He also directed the Ministry of Agriculture to finalize regulations under the Sugar Act and address issues such as cartels and cane poaching that undermine industry growth.

Operational challenges persist

Despite these advancements, tensions remain within the industry. Earlier this year, farmers and local leaders protested a Kenya Sugar Board directive mandating the temporary closure of three mills—Mumias Sugar, Olepito Sugar, and Busia Sugar Industries—citing a shortage of mature sugarcane. 

While the closures were intended to allow for verification of sugarcane acreage and age, Mumias Sugar was controversially permitted to continue operations, sparking discontent among stakeholders.

Leaders from the region have urged the government to expedite the finalization of the Sugar Regulation Bill, which seeks to address systemic issues such as cane poaching and the influx of cheap sugar imports. 

Cooperatives Cabinet Secretary Wycliffe Oparanya emphasized that limiting the establishment of new factories will help curb raw material shortages.