The Sugar Campaign for Change (SUCAM) has declared that the sugar zoning proposed in Kenya’s draft Sugar Regulations 2018 as illegal and anti-competitive.
According to the draft regulations sugar cane farmers will be obliged to sell their produce to specific sugar mills, with a single buyer for each area dictated by regulation.
“Forcing farmers to sell to a single buyer, who will be the only miller they can sell to, offers no remaining scope for market forces,” said Michael Arum, SUCAM Coordinator.
“For farmers in areas with poorly performing mills, any mill mismanagement will mean that their own livelihoods are ruined. They cannot seek other sellers, or better prices. In effect, they will simply work for a single mill, and without ever having signed a contract to do so, but by regulatory dictate.”
According to SUCAM, farmers will be forced to conform to the price set by their local enforced mill, which is a breach of the Competition Act that prohibits restrictive trade practices and anti-competitive agreements. The zoning law are apparently also a breach of COMESA rules that prohibit the introduction of a contract, agreement or understanding that is anti-competitive or substantially lessens competition within the common market.