Challenges posed by common market for Eastern and Southern Africa (COMESA) on sugar millers in Kenya

Abstract

The aims of the study presented here are to assess the challenges posed by COMESA on the sugar millers in Kenya. In particular, the focus was on the eight sugar millers in Kenya. This study report details findings that portray an industry going through difficulties borne out of adjustment, exposure to contraband products or an ill-regulated market. It also shows that sugar could offer fledgling economies in developing countries an opportunity to expand their earnings from exports. In conclusion, it lays out a number of possible measures, also sought from stakeholders, relevant to producers and policymakers to save the country's developing sugar millers from falling over the edge. The research ,design was .a case study focusing on the sugar millers in Kenya. A population of eight (8) sugar millers was studied. Data collection method was by use of a questionnaire. Data was analysed using frequency distribution tables and percentages. The findings indicated that there were associated costs of sugar production. Costs that were mentioned by a majority of the Millers included maintenance costs of plant and equipment, labour costs, land preparation costs and government taxes. Some of the internal factors that affected the sugar sector cost of effectiveness were high taxation and the high cost of inputs e.g. fertilisers, and low cane yield. To address these measures, firms undertook encompassed manpower training and motivation, tax review/reduction and more investment in research and development. The challenges that faced the sugar Millers included excessive deductions and taxation of farmers' income; negative effects of regional trading systems; inadequate capital for operations and survival of the sugar Millers and its ability to sustain growth; poor and patronage-based management systems; and massive investment of cash and energy. Measures that firms took to address the challenges included emphasising on product quality and a constant need to manage cost; investing in new technology to get the high state of operations in order to monitor and have constant feedback; making acquisitions such as beet factories and more land to plant more stock to minimise the negative impact of trade arrangements and consumption trends