Agriculture and Livestock Development Cabinet Secretary Mutahi Kagwe has firmly defended the government’s decision to introduce a 4% Sugar Development Levy, clarifying that the tax is not just for revenue collection but a strategic investment in reviving the struggling sugar industry.
Speaking before the Senate Committee on Delegated Legislation on Thursday, October 2, 2025, Kagwe argued that the levy is necessary to fund critical research, modern technology, and farmer training.
“Keeping the levy at 4 per cent is not about increasing the financial burden,” he said. “It is about matching resources with today’s level of challenges and opportunities. Without proper investment in research, innovation, and technology, the sugar industry will collapse.”
Who Will Pay the Levy?
The Ministry of Agriculture had earlier announced that the levy will be paid by:
- All local sugar millers – at 4% of the ex-factory price
- All sugar importers – at 4% of the Cost, Insurance, and Freight (CIF) value of each shipment
Some millers have protested the move, claiming it will increase operational costs. However, Kagwe countered that the benefits of the levy far outweigh the short-term financial concerns.
Levy to Fund Research, Modern Farming & Factory Upgrades
The CS emphasized that much of the money will be channelled through the Kenya Sugar Research and Training Institute (KESRETI), whose mandate was expanded under the Sugar Act 2024.
KESRETI will now be responsible not only for scientific research but also for:
- Training farmers on modern farming practices
- Introducing new high-yield, climate-resilient cane varieties
- Supporting millers with mechanisation and value addition
Kagwe revealed that 97% of Kenya’s current sugarcane varieties are outdated, highly vulnerable to disease, drought, and low productivity.
“Research is the engine that will give us better cane varieties that produce more sugar and survive harsh climates,” he stressed.
How the 4% Levy Will Be Shared
According to Kagwe, the levy funds will be allocated as follows:
| Allocation Area | Percentage Share |
|---|---|
| Cane development & productivity | 40% |
| Factory development & rehabilitation | 15% |
| Infrastructure | 15% |
| Kenya Sugar Board administration | 10% |
| Farmer organisations | 5% |
| Research & training (KESRETI) | Remaining share under core programmes |
He warned that failure to invest now would lead to even poorer yields, inefficient factories, and higher dependence on imported sugar — a risk that could threaten Kenya’s food security.
Senate to Decide Fate of the Levy
With submissions now presented by the Ministry and other stakeholders, the Senate Committee will review the matter and determine whether the 4% tax will proceed as proposed or be adjusted.
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