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Kenya’s Sugar Industry Struggling

May 18, 1999

BUNGOMA, Kenya (AP) _ In the rolling hills of western Kenya, sugar cane grows almost like a weed _ and is nearly as worthless.

Corruption, mismanagement and competition from cheap foreign sugar have battered Kenya’s once vibrant sugar industry and left many of the country’s cane farmers struggling for survival.

Eluid Wabubwa Nyaranga’s 5-acre plot in Bungoma, was once green with fresh cane, a crop that earned him a healthy $4,500 a year. But he ripped up the fields after the Nzoia sugar refinery refused to pay the $1,500 it owed him for a shipment of cane in 1995, he said.

Nyaranga now toils as a subsistence farmer, struggling to feed his 15 children and two wives on the potato and maize he now grows.

``It is very difficult. I am just surviving,″ he said.

The government, which owns Kenya’s sugar refineries, is trying to rescue an industry that an estimated 1.5 million Kenyans rely on for their livelihoods.

It has put high tariffs on imported sugar, pledged to privatize some of the better-run refineries and brought in foreign firms to run mills that were run into the ground by unqualified government cronies who had been installed as managers.

``We can see some light at the end of the tunnel,″ said Francis Chahonyo, managing director of the Kenya Sugar Authority, which regulates the industry.

Some analysts are more pessimistic about saving an industry that produced enough sugar to feed all of Kenya 20 years ago, but now barely meets half local demand, which was estimated at 716,455 tons in 1998.

``It will take us time to overcome the culture of corruption, to overcome the culture of inefficiency,″ said Dan Ojijo, director of the Resource Management and Policy Analysis Institute.

The government’s revival program hit an early snag when the Pakistani managers hired to clean up one sugar mill were chased off by workers and farmers wary of outsiders.

An American firm, F.G. Schaefer International of Baton Rouge, La., had more success in trying to clean up the rusty remnants of the Nzoia refinery.

When the new managers came in December, they found a factory nearly falling apart from neglect. They found poorly paid workers demanding bribes to harvest cane. They found a company $160 million in debt, some of it owed to impoverished farmers and suppliers.

``We’ve had a very unfortunate history,″ said Peter Du Boulay, Nzoia’s new general manager. ``The whole scenario is one of poor management, because the potential is here.″

Simply by demanding that freshly cut cane be brought to the factory before it dries out and loses its sugar content, Du Boulay has made Nzoia almost 25 percent more efficient.

He said there are plans to pay off some of its debts to farmers and suppliers and hopes to raise wages so factory workers will be less susceptible to bribes.

``Unless you’re fair and equitable, you’ll never get this place running right,″ he said.

No matter how well-run it becomes, Nzoia and the 26,000 peasant farmers who supply it with cane may never be able to compete with the efficiency of foreign producers like Brazil, where sugar is grown on huge, fully mechanized plantations.

``It would be very difficult for Kenya to switch to that system, because you would create massive unemployment, throwing these people off their farms, and obviously the government would be courting widescale unrest,″ said Arthur Stevenson, a sugar analyst with Prudential Securities in New York.

The government has repeatedly raised tariffs in an effort to keep the cheap foreign sugar out, but industry analysts estimate nearly half the sugar imported into Kenya evades taxes.

Chahonyo insists all imported sugar is currently being taxed and denies the existence of corruption in the industry.

But in Bungoma, about 20 miles from the border with Uganda, farmers talk of having to bribe Nzoia workers to cut their cane.

Even with the bribes, the cane was often left unharvested for years after it had ripened, losing much of its sugar content and taking up space that farmers could have used to plant other harvests, Nyaranga said as he walked from his family’s two small mud huts to his meager field.

But Nyaranga believes Nzoia’s new managers will change that, pay off its debt to him and operate honestly.

So he is optimistic about his latest crop: a green field of young cane.

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