Sugar cane farmers and millers are battling over pricing, with the factories threatening to shut their plants from Friday after a court stopped a government committee from lowering the rates to Sh5,100 per tonne.
Farmers, who went to court and obtained orders retaining cane prices at Sh5,900, are accusing the millers of attempted economic sabotage and blackmailing the government over their threat to shut down operations.
The Kenya Sugar Manufacturers Association (Kesma) has termed a court decision to pay farmers Sh5,900 per tonne as unsustainable.
In the latest review by the Sugar Pricing Committee, prices per tonne fell sharply from Sh5,900 to Sh5,100 which was to be effected from April 8.
Despite the millers deriving a number of benefits from the primary raw material, Kenya Sugarcane Growers Association secretary general Richard Ogendo said farmers had nothing to show for the same.
“It is unfair to have sugarcane pricing formula derived from gross sugar prices at the factory level while some of the companies also extract products like ethanol, biogas, electricity, briquettes and fertiliser,” he said.
He challenged the government to operationalise cane testing units to pay farmers based on sucrose content as opposed to weight.
But Kesma chairman Jayantilal Patel said that the court directive infringes on the contractual arrangements between the millers and farmers and threatened to halt milling.
“The new sugarcane prices are causing high disruption and interference of our business operations and are in direct violation of the rights and the basic trade fundamentals,” he said.
“As millers, our options are very clear, we will either operate at the price of Sh5,100 per tonne until the matter in court is determined or close the sugar plants until the case comes to an end,” added Mr Patel.
