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"speaker_name": "Mr. Kirwa",
"speaker_title": "The Minister for Agriculture",
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"content": " Mr. Temporary Deputy Speaker, Sir, when you give an hon. Member one minute, he takes five minutes. I would like to say the following:- First, I support the Motion. I do so for a number of reasons. I will state some here, and on April 19, 2006 PARLIAMENTARY DEBATES 545 others, we shall work together with my colleagues. It is useful for us to understand that problems affecting sugar-cane farmers and other farmers in general do not squarely lie in the Government's hands alone. They lie with us all as the people of this country. I just wanted to state the facts. When I took over the Ministry, farmers' arrears stood at Kshs2.3 billion. I have entirely retired farmers' arrears that I inherited in the Ministry. Productivity at that time was low. But we have improved by 15 per cent. We have also reduced the cost of production by the same measure. In return, we have improved efficiency across the board in various factories by 20 per cent. Sugar production has gone up. Unlike what many colleagues have stated this morning, the production of sugar went up by 15,000 metric tonnes to surpass the figure of 500,000 million tonnes per year from the previous figure of 436,000 million tonnes. We have also increased money for research. When I took over the Ministry, we were giving research Kshs80 million. We have doubled that figure for purposes of empowering research through Kenya Sugar Research Foundation (KESREF). Mr. Temporary Deputy Speaker, Sir, the collection of Sugar Development Levy, when it was being collected through the Sugar Board, was Kshs90 million per month. But when we handed over that portfolio to Kenya Revenue Authority, we are now collecting Kshs120 million per month, giving a figure that was stated by my colleague of Kshs1.5 billion per year. What have we done with that money? I have given Kshs2.4 billion to the industry through farmers' arrears of Kshs800 million, factory rehabilitation using various amounts and development of infrastructure in that particular sector, apart from research. Mr. Temporary Deputy Speaker, Sir, when I took over the Ministry, the money under SDL was Kshs800 million, and we now have Kshs2.5 billion. This is money that we still want to plough back to the industry. Mr. Temporary Deputy Speaker, Sir, it is easy just to criticise the position the Minister has taken, but I have said we have ploughed back Kshs2.4 billion. The statistics are available in my Ministry for any Member to verify. We have also done reduction in areas of time lag between cane delivered and the payment. I can challenge any colleague to give me the names of farmers who have not been paid within the period of one month as is stipulated by the law, apart from SONY Sugar which has in-built problems. When I took over the Ministry, we had arrears amounting to over Kshs2.3 billion stretching over a period of five years before I took over the Ministry. Today, I challenge any Member to bring me the names of farmers who have not been paid and they shall be paid within a week of the time I get the names. Mr. Temporary Deputy Speaker, Sir, all these are good intentions by the Government and those of us in the Ministry. But there are more challenges than the intentions that we have. First of all, there is the Bill that will soon come before the House. At this juncture, I want to thank Prof. Oniang'o for ceding the moving of that Bill to me. We have prepared the necessary instruments and amendments that we envisaged as a Ministry. The same has been sent to the Attorney-General for processing. The challenge is with us as Members of this House, that when the Bill comes, we look at the necessary changes for purposes of reducing the baggage that the sugar-cane farmer has. Mr. Temporary Deputy Speaker, Sir, the other issue is just to inform the House that I have already prepared a Sessional Paper on the Revitalisation of the Sugar Industry. The key element in that Sessional Paper is to clean up the balance sheets of all factories and allow the Government to take the debt, including that of Nzoia Sugar Factory, for purposes of ensuring that the factory is able to operate with the least encumbrances. We are also thinking of ways of ensuring that debenture holders of Miwani Sugar Factory are off-loaded for purposes of ensuring that we get an investor to take on board the issues of Miwani and Muhoroni sugar factories. There is also the issue of privatisation of the companies that are already doing well. 546 PARLIAMENTARY DEBATES April 19, 2006 Just for comparison purposes, I would like to inform the House that when I took over the Ministry, the sugar factories in this country had made losses as follows: SONY Sugar Company, Kshs468 million; Nzoia Sugar Company, Ksh191 million, Chemilil Sugar Company, Kshs420 million and Mumias Sugar Company, Kshs245 million. A year later, the situation reversed with the sugar companies recording profit as follows: SONY Sugar Company, Kshs144 million; Nzoia Sugar Company, Kshs423 million; Chemilil Sugar Company, Kshs65 million and Mumias Sugar Company, Kshs1.138 billion. These are facts made available to hon. Members for purposes of establishing what can be done to improve the situation further. Mr. Temporary Deputy Speaker, Sir, another issue I would like to make clear is that the COMESA market is a sugar deficit market. We want to think out of the box. Instead of us worrying about sugar being imported into this country, we should be asking ourselves: \"How do we prepare the requisite capacity to produce enough sugar for local consumption?\" The amount of sugar consumed locally has been increasing steadily over the years. This year we may consume over 600,000 metric tonnes. In the next four years, all factors being constant, we will require 1 million metric tonnes of sugar for local consumption. Therefore, we should be thinking of how to produce enough sugar for our people and for the COMESA market, instead of worrying about sugar getting into this market from the COMESA market. My colleague, the Minister for Trade and Industry, has just stated clearly that this year, divide all the odds and the thinking of the majority of people, there is less sugar coming into Kenya as was predicted earlier on. So, what is the way forward? We require close to Kshs20 billion. That money may not be available in the Government kitty. The opportunity that is available for us, is to clean the balance sheets of these factories and allow investors to take over the running of the factories. However, we should do this strategically, so that our people do not suffer the same way the stakeholders of Mumias Sugar Company did. Where while declaring profits, it did not trickle down to the farmer. Mr. Temporary Deputy Speaker, Sir, another thing we have done as a Ministry is that the SDLs that we are giving to farmers for purposes of production, will reduce the cost of that money from 10 per cent to 5 per cent. We have also been able to suspend interest and penalties of previous loans to the tune of Kshs4.8 billion, which will be captured by the Sessional Paper I have referred to. So, it is not true that it is only tea and coffee farmers who are taken into consideration when it comes to the issue of suspending loans. We are thinking across the board. These are issues we shall be able to bring to this House for purposes of harmonization. Mr. Temporary Deputy Speaker, Sir, I also want to urge my colleagues to look at a number of issues. The question of improving productivity should be considered. \"Productivity\" is the word I used advisedly because, unlike many people who consider production as the main component in terms of efficiency in the sugar industry, I look at it differently. I just want to capture the imagination of my colleague, Prof. Anyang'-Nyong'o, that unless we move towards irrigation, we are not likely to improve productivity. We also need to engender good husbandry practices in the majority of cases. Mr. Temporary Deputy Speaker, Sir, why would a farmer produce over 110,000 metric tonnes of sugar-cane while in the neighbouring area, farmers are only producing 30 tonnes of cane per acre? These are some of the questions that we should ask ourselves. We should ask ourselves whether the inputs that we give to the farmers through various organisations get into the sugar-cane growing areas or it is diverted to other uses. This is a vicious circle, but I do not want to deal with all issues. The other issue is what my hon. colleague has been referring to as alcohol or whatever terminology. As we discuss the Sessional Paper, the issue is that we need to diversify the sugar industry, so that sugar is not the only product that we produce. We must produce electricity, nepar alcohol and other products, so as to make it more competitive. Fundamentally, how do we own the April 19, 2006 PARLIAMENTARY DEBATES 547 entire chain of sugar-cane production? Today, farmers in Mumias off-loaded the majority of the shares that they had and the benefits accrued now out of the shares and dividends are going to the people who have never seen sugar-cane, even the simple one that they chew. This is an issue that we in the leadership of this country must tackle and allow our people to own the entire chain. That is the only way they can enjoy the benefits accruing from any section of that particular chain. Mr. Temporary Deputy Speaker, Sir, as the hon. Members have said, we need to get rid of extra expenses like the retaining of the farmers' money by various out-grower institutions. I have given instructions that we ought to get rid of these institutions and allow the money to be lent to farmers through financial institutions so as to protect the farmers from being fleeced by the said organisations. Once I have said that, I will look at the Motion and discuss it with the Minister for Finance. As you can see, most of these issues relate to taxation. I will prepare the normal letter that we write to the Minister for Finance when we are preparing the Budget and I hope that at the right time when it comes to the House, it shall get the support of the hon. Members. Thank you."
}