KENYA: Farmers oppose privatisation of SONY Sugar

Published: 03/20/2018, 12:55:39 PM

The government's plans to privatize state owned sugar mills have been thrown into a twist after sugarcane farmers in Migori led by local leaders opposed the planned privatization of Sony Sugar, according to Kenya's Citizen TV.

The sugar mill is among five state owned factories earmarked for privatization but local farmers now say there is enough local capacity to run the mill.

Migori Governor Okoth Obado who also chairs the Council of Governors' agriculture committee said the Privatization Commission needs to take into account the sentiments of farmers before making a blanket recommendation to sell the Sony Sugar.

"We are supposed to be governed by ourselves. We don't expect anything to be imposed on us. If the residents say they don't want this privatization because they don't see its benefit, that is what must be respected," Obado said.

In the proposed sugar mill sale a private investor is set to get 51% of the factory while farmers have the chance to own 24% with the remaining 25% being listed on the Nairobi Securities Exchange.

But there has been a push by governors in sugarcane growing regions to change the ownership formula.

The Privatization Commission has been holding stakeholder engagements with residents and farmers to get them to buy into the privatization plan.

Obado has in the past expressed fears that privatization would discourage sugarcane farmers, warning that they might be forced to opt out of the venture.

Other sugar mills earmarked for privatization are Chemelil, Nzoia, Muhoroni and Miwani.

The five mills collectively have a debt of KE89 billion (US$878.6 million) which the governors also want the National Treasury to write off.