Sugar millers’ license renewals tied to honoring farmer payments

sony sugar company
Sony Sugar Company factory. PHOTO | COURTESY

Sugar millers are set to be subjected to new licensing requirements aimed at protecting farmers from financial exposure.

Under the proposed recommendations, sugar millers will be expected to guarantee payments of sugarcane deliveries within 30 days as part of the new framework.

According to the Agriculture and Food Authority (AFA) the measure is in line with changes to the licensing regime, as farmers continue to grapple with millions of shillings in unpaid cane deliveries.

AFA director General Alfred Busolo said the 11 registered millers would be subjected to different tests to ascertain if they adhere to conditions such as timely payment to farmers.

“We would want the millers, before licensing, to come out and confirm that they will be able to pay farmers within 30 days of receiving their raw material,” Mr Busolo said.

As part of the changes, sugar millers will also undertake to purchase cane within their specified zones a measure to curb rampant cane poaching that has seen most state owned sugar millers grapple with declining production.

Mr Busolo said the regulator would continue engaging the public on whether milling permits should be extended.

“We would also want millers to confirm that they will enter into contracts with farmers so that we don’t have issues of millers scrambling for cane which will have been developed by another miller,” he stressed.

Players in the sugar sector and unions have been pushing for the return of zoning rules to avoid undue scramble for sugarcane.

The rules restrict sugar millers within different belts to specific areas where they can source the raw material.

Smaller millers have often accused their deep pocketed rivals of breaching these rules and buying cane which they have helped develop leaving them with acute shortages.

Last week the National Treasury gazzetted the duty fee import of sugar into the country to cover a projected production drop.

The duty free window is however only open to sugar millers in the hope that it will stabilize their operations.

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