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{
    "id": 521152,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/521152/?format=api",
    "text_counter": 206,
    "type": "speech",
    "speaker_name": "Hon. Kobado",
    "speaker_title": "",
    "speaker": {
        "id": 2964,
        "legal_name": "John Owuor Onyango Kobado",
        "slug": "john-owuor-onyango-kobado"
    },
    "content": "terms of dependency in their livelihood. It also employs close to 300,000 Kenyans so the collapse of the sugar industry would kill one particular region in this country. We have heard about the COMESA safeguard from 2004 up to this year. In 2004, we had some safeguard window for the Government to make and put in place some reforms. In 2008, it was the same; 2013 it was the same and this time round it is still the same. Why have we been having these COMESA safeguards? The reason is simple. It is for the Government to come up with comprehensive reforms to make the sector competitive. Some of the issues that they were supposed to address have not been addressed. One of them is to look at the cost of production. The cost of producing sugar in this country is double the cost of producing sugar in the region which does not really make us competitive. If you look at the factories, some of them are operating at between 55 per cent and 65 per cent of their capacity which means that they are under-producing. The factories have machines which are archaic; outdated machines and so issues of technology and modernization of the factories need to be looked at. The competitiveness of the product, sugar, is an issue and the corporate governance has been a very big issue in this particular sector. On efficiency and productivity, these are some of the raft of issues that were meant to be addressed by the Government but it has not been done. So when we talk about privatisation, if you look at some of those factories you want to privatise, it is like taking a sick cow to the market to sell. It will sell at throwaway prices and in that way farmers will stand to lose quite a bit. Privatisation is the way to go and I would strongly support it because the world is heading there. The Government should not be in business and more so the business of production. The Government should be in the business of serving citizens; not in the business of manufacturing and competing with the private sector. So privatization is the way to go. However, privatisation may not be a panacea to the problems that the sector has been facing. There is a lot more that we really need to look at to ensure that when we privatise, these factories are going to survive and be profitable. Hon. Temporary Deputy Speaker, if you look at success cases, we do not have success cases to learn from. Mumias Sugar Company is a very bad case to look at if we were to really go by cases to learn from. The Kenya Co-operative Creameries (KCC) is another case. You remember the time the Government was taking over KCC, its value was Kshs5 billion and the Government of Kenya bought it for a meager Kshs500 million and now we are shifting back to sell KCC back to the farmers. As we are considering privatising the five State-owned sugar factories, we really need to do it in a manner that will involve the farmers, the out-growers, so that it becomes participative and the process becomes all inclusive so that all the key stakeholders should be involved. We are aware that agriculture is a devolved sector. Since agriculture is devolved, as we are considering selling some of these factories, there is need to involve the county governments. They may not be having the capacity but there is need to ultimately make sure that they also participate in the process of consultation and the process of coming up with a formula to sell off these sugar factories. As we are considering selling the five State corporations that are in this sector, we need to look at what kind of assets we want to dispose. There are two aspects to this: We have the fields and we have the factories. The fields are the land. Considering a factory like SONY where more or less 60 per cent The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor."
}