The new Sugar Act 2022 which has been assented to by President William Ruto on Friday will see sugarcane producing regions allocated 15pc of the Sugar Development Levy collected from local and imported sugar.
The funds to be allocated on a pro-rate basis based on production capacity will go towards infrastructural development and maintenance of sugar sector in the regions.
The new act prescribes the establishment of the Sugar Development Levy which is to be levied on domestic sugar and retained in a Sugar Development Fund that is administered by the Kenya Sugar Board.
The Levy is capped at 4pc of the value of domestic sugar and 4pc of the Cost Insurance Freight (CIF) value of imported sugar.
Additionally, 15pc of the levy collected has been allocated for factory development and rehabilitation, another 15pc towards research by the Kenya Sugar Research and Training Institute and 40pc towards cane development and productivity enhancement.
The Kenya Sugar Board which has been reintroduced under the new act will be allocate 15pc of the levy for administration purposes while the remaining 5pc will be allocated to sugarcane farmers’ organizations to help further their courses and run their activities.
The board which assumes the mandate currently held by the Sugar Directorate of the Agriculture and Food Authority (AFA) will be responsible for regulating, developing and promoting sugar industry and co-ordinating the activities of individuals and organizations within the industry and take part in policy formulation and implementation, establish linkages with government agencies and research institutions.
The board will also facilitate the sale, import and export of local sugar, advise local sugar growers, regulate pricing of sugar, license sugar mills and conduct local and international market surveillance.
Under the new law, the 14-member board comprises a non-executive chairperson, five representatives elected by growers in the counties clustered under the Central, Upper Western, Lower Western, Southern, and Coastal sugar catchment areas, two representatives each from both private and public-owned sugar mills, the principal secretary for agriculture, a representative of the Council of County Governors, the Principal Secretary for National Treasury, and a chief executive officer who is an ex-officio.
The Board is to serve for a term of three years which is renewable once.
The act is expected to help Kenya address challenges that have faced the sugar sector since 2013 among them increased cost of sugar production, shrinking acreage of land under sugar cultivation, lack of markets, failure to control imports and exports of sugar, poor management of sugar companies and lack of research and cane development initiatives.
According to latest data from the Sugar Directorate, total sugar production in months of the year to September grew by 65pc to 615,499 metric tonnes from 374,119 recorded last year.
