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{
    "id": 664251,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/664251/?format=api",
    "text_counter": 40,
    "type": "speech",
    "speaker_name": "Hon. Wakhungu",
    "speaker_title": "",
    "speaker": {
        "id": 1889,
        "legal_name": "Chrisantus Wamalwa Wakhungu",
        "slug": "chrisantus-wamalwa-wakhungu"
    },
    "content": "Thank you, Hon. Temporary Deputy Speaker. From the outset, I support this amendment Bill. It is the responsibility of any Government in the world to take care of its citizens. Sometime back, I was on a trip to Turkey with His Excellency the President, Uhuru Muigai Kenyatta. President Kenyatta requested for reduction of taxes on our tea and the President of Turkey said that that was the source of livelihoods in that country and they could not do anything. That tells you that that particular government is very particular about the welfare of its citizens. It is the responsibility of the Government to ensure that the welfare of sugarcane farmers is improved. When you look at the measures that have been put in place, we need to do more. I listened to the Budget by the Cabinet Secretary of the National Treasury where he removed the sugar levy. The sugar levy plays a very critical role as far as production of sugarcane is concerned. This is the money that is borrowed by farmers for the improvement of the produce. The Kshs2 billion that was given to Mumias never came from the Exchequer. It was from the sugar levy. If you remove it, where are we going? The sugarcane research firms use this development levy in terms of improvement of varieties. You can get varieties that can mature within a short time. We know very well that farmers, particularly in the western region, are languishing in poverty. Because of the small acreage they have, they do not enjoy the benefits of economies of scale. That is why the production cost of sugar is very high. Those of you who have done basic economics know that the total cost is equal to the fixed cost plus the variable costs. You can enjoy economies of scale if you have higher volumes, but our farmers are on one, two or three acres. When you add VAT on transportation, it adds a significant cost. When you add a margin, since price is equal to total cost plus percentage margin, you cannot compete when you put into consideration the laws of demand and supply. The sugar we are getting from Brazil is cheaper because sugarcane producers in Brazil enjoy the benefits of economies of scale. They have bigger volumes. The KRA is also to blame because most of the sugar in the market is smuggled into the country through Somalia. Such sugar is not subjected to taxation. It gets to the local market at lower costs. If you go Nakumatt Supermarket, you will find sugar labelled “Nakumatt”. Where does Nakumatt produce sugar? This is the cheap sugar that comes into the country. This sugar will kill our local industries. We have Mumias and Nzoia sugar factories. Removing VAT on sugarcane transportation will play a critical role in terms of reducing the total cost of sugar production in Kenya and enabling local sugar to compete with cheap imports. As the CS for the National Treasury removes sugar levies, there should be allocation of funds to the sugar research firms because they play a critical role, as I mentioned earlier. If money is not set aside for that purpose, in the long-run, we will kill the local sugar industry. In some parts of western Kenya where sugarcane is grown, like Trans-Nzoia County, farmers are languishing in poverty. They cannot afford to pay school fees for their children or put food on the table just because the measures the Government has put in place do not benefit the local"
}