Farmers oppose proposed sugar levy to KADCO

Small holder cane farmers drawn from the Western sugar belt have petitioned the National Assembly to stop a proposed law aimed at diverting part of the Sugar Development Levy from the local industry to the Kenya Agricultural Development Corporation (KADCO).

In a memorandum dated September 9, 2026, addressed to the departmental committee on Agriculture through the clerk of the National Assembly, the farmers expressed concern that if implemented, the move could reverse the gains so far made in reviving the troubled sector.

The Western Development Initiative Association (WEDIA), which represents more than 15,000 sugarcane farmers in Busia, Bungoma and Kakamega, has urged lawmakers to delete Clauses 5, 6, 7 and 8 of the Crops Laws (Amendment) Bill, 2026.

“Clauses 5 to 8 of Bill No. 30 seek to remove lending from Sugar Board and Kenya Sugar Research Institute and to transfer 40 percent of Sugar Development Levy under Section 40 (6) to KADCO for general agricultural lending,” the farmers said in the memorandum seen by The Standard.

The farmers argue that the Sugar Development Levy should remain within the sugar sector because it is not a general tax but a special charge imposed on consumers and sugar dealers to support the revival and development of the sector.

The memorandum notes the levy currently stands at 4 percent on domestic and imported sugar.

National chairman of the Western Development Initiative Association (WEDIA), Joseph Barasa, says the ongoing debate on Kenya’s sugar politics must guard against reversal of the progress so far made.

“The industry suffered during the period when there was no dedicated financing mechanism following the enactment of the Crops Act in 2013. That period coincided with the collapse of Mumias Sugar, declining cane development and productivity, and increased dependence on imported sugar,” said Barasa.

The association further notes that sugar required a specialised and long-term financing because cane takes between 12 and 24 months to mature, while factories require substantial investment in rehabilitation, transport, power generation, ethanol production and working capital to facilitate timely payments to farmers.

“Transferring the funds to a general agricultural financing institution could weaken the implementation of the Sugar Act, 2024, which is only two years old and whose institutions are still being established.

So far, more than 20 investors have expressed interest in sugar factories and the leasing of Mumias Sugar has succeeded.

Moving the levy away from sugar institutions, the farmers cautioned, could create policy uncertainty at a time when the Government is seeking to attract investment and rebuild Kenya’s sugar industry.

According to the farmers, the proposed change could undermine confidence in ongoing efforts to restore factories and increase domestic cane production.

The memorandum also raises concerns about accountability, noting that the current framework gives the sugar industry oversight through the Sugar Board, which includes farmer and miller representatives.

“Transferring the funds to KADCO could leave sugar farmers without sufficient influence over financing priorities, project selection and monitoring.

 “Under current Section 40, funds are accountable to the sugar industry through the Sugar Board, which has farmer and miller representatives but when funds go to KADCO, sugar farmers will lose control over financing priorities, project selection and monitoring,” the memorandum further states.

The farmers' lobby is asking Parliament to retain Section 40 of the Sugar Act, 2024, in its original form and allow its full implementation as part of efforts to complete the revival of Mumias Sugar and other factories.

It also wants the Sugar Board to enforce the seven-day payment requirement for farmers, arguing that protecting the levy and ensuring timely payments are critical to restoring confidence in Kenya’s sugar industry.