Kenyan sugar cane farmers oppose 4% sugar development levy import exemption proposed by manufacturers 

KENYA – Kenyan sugar cane farmers have dismissed a proposal from the Kenya Association of Manufacturers (KAM) seeking exemptions for exporters and manufacturers importing refined white industrial sugar from remitting the four per cent Sugar Development Levy (SDL). 

Through the Sugar Campaign for Change (Sucam), farmers said the recommendation is legally unsupported and risks undermining industry-wide restructuring efforts, claiming it would reduce funding critical for cane development, infrastructure upgrades, and long-term sector reforms. 

Sucam coordinator Michael Arum said manufacturers could pursue commercial priorities for their members but argued the proposal conflicts with the Sugar Act, 2024, which, he said, clearly outlines the levy’s scope.  

The Act mandates a charge on locally produced sugar and an equivalent four per cent of the Cost, Insurance, and Freight (CIF) value on imported sugar, without granting waiver provisions for industrial users or exporters. 

“Section 40 of the Act requires a levy on domestic sugar and a parallel four per cent of the CIF value on imported sugar. There are no clauses allowing exceptions for exporters or industrial manufacturers sourcing refined white sugar for industrial purposes,” Arum said in a statement. 

Farmers also referenced earlier policy interventions, drawing parallels to KAM-backed proposals from 2006 and 2007, when the levy was reduced from seven per cent to four per cent and select import exemptions were introduced.  

According to Sucam, those changes did not translate into lower retail pricing for sugar-derived products, improved consumer outcomes, or measurable benefits for growers. Instead, farmers said the amendments depleted the Sugar Development Fund, weakened factory support mechanisms, and stalled field expansion initiatives. 

Sucam further stated that prior pushes to reduce the SDL to two per cent were driven by similar commercial interests, despite limited cane volumes being the industry’s primary constraint.  

Farmers said such proposals overlook raw material shortages, do not improve structural competitiveness, and divert capital that supports farming productivity and milling resilience. 

“Funding from the SDL is the most dependable and predictable pooling mechanism Kenya has for stabilising cane agriculture, supporting miller recovery, and enabling sustainable growth across the sugar-producing regions. Weakening the levy only destabilises the financing framework the industry relies on,” Arum said. 

Farmers warned that a selective waiver plan would benefit a narrow segment of industrial players while exposing smallholders to heightened vulnerability, particularly during periods of crop supply shortages, volatility in global sugar pricing, and rising import volumes. 

KAM Proposals 

KAM earlier said the SDL’s current structure has raised processing-related expenditure at a time when domestic sugar output has contracted.  

The manufacturers’ body noted that Kenya’s national sugar volumes fell by 16 per cent in the first half of 2025, attributing the decline to high production overheads and raw material and supply-side limitations. 

To navigate these pressures, KAM proposed interventions including shielding sugar consignments destined for export markets from SDL charges, and exempting licensed industrial manufacturers importing highly refined white sugar strictly for food, beverage, and industrial processing. 

KAM maintained that the proposed waivers would reduce landed costs of industrial-grade sugar, improve production-scale efficiencies, encourage factory-level growth, and support Kenya’s integration into East African and global value chains. 

Farmers have since called on Parliament, agricultural regulators, and the Ministry of Agriculture to decline the proposal and preserve structured sector financing for cane expansion programmes, factory modernisation, and supply chain reforms. 

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