ADVOKS GLOBAL · KENYA
Kenyan legislation
The Crops (Sugar) (General) Regulations
Edition: 2022-12-31 · In force
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Part I – PRELIMINARY
1. Citation
These Regulations may be cited as the Crops (Sugar) (General) Regulations.2. Interpretation
In these Regulations, unless the context otherwise requires—"agreement" means an agreement specifying the standard provisions that govern the rights and obligations of a grower, miller, out-growers' institution, harvester or transporter, in the farming or supply of sugarcane or a sugarcane product;"directorate" means the Directorate for the time being responsible for sugar established pursuant to section 11(4) of the Agriculture and Food Authority Act (Cap. 317);"extraneous matter" means any matter other than sugarcane delivered with and weighed as sugarcane;"grower" means a person who cultivates sugarcane in Kenya;"independent grower" means a grower who —(a)is not a member of any out-growers' institution;(b)does not depend on a miller for any assistance in cultivating his sugarcane; and(c)depends solely on his own resources to develop and supply sugarcane directly to any miller as per an agreement;"industry" means the Kenyan sugar industry;"interested party" means a stakeholder in the industry and includes the Government, a miller, millers' association, grower or out-growers' institution;"mill gate" means a site designated as such by the Authority where sugarcane weighing and sugarcane testing facilities have been set up;"miller" means a person who operates a sugarcane mill to produce sugar jaggery or other products of sugarcane;"out-growers' institution" means a legal entity composed of small-holder growers and includes a co-operative society;"sugar inspector" means a person appointed as an inspector under section 27 of the Crops Act (Cap. 318);"sugarcane" means sugarcane (Saccharum) or sugar beet (beta vulgaris) grown for the production of sugar or other products;"sugarcane nursery" means a site where sugarcane varieties are progressively grown under strictly controlled agronomic conditions for eventual establishment of the sugarcane crop; and"working day" means a day other than a Saturday, Sunday or public holiday.Part II – REGISTRATION PROVISIONS
3. Registration of umbrella millers' associations
(1)Registered millers may organise themselves into an association and register with the Authority as an umbrella association to represent and advocate for the millers' interests.(2)An association of millers that intends to be registered as an umbrella millers' association shall apply to the Authority for registration as an umbrella millers' association in Form 1 set out in the First Schedule.(3)The Authority shall consider the application made under subregulation (2) and—(a)within thirty days of submitting an application, issue to a successful applicant a certificate of registration; or(b)within fifteen days issue the applicant a notice of their rejection of the application specifying the reasons for the rejection.(4)An applicant who is dissatisfied with the rejection of their application made under subregulation (3)(b) may within fourteen days of the decision, resubmit the application after addressing the reasons raised in the rejection.(5)Upon resubmission of a satisfactory application under subregulation (4), the Authority shall issue the applicant a certificate of registration as an umbrella millers' association, within thirty days.(6)Where the Authority rejects an application resubmitted under subregulation (4), the applicant may appeal to Court within thirty days after the date the applicant receives the notice of the rejection of the application from the Authority.(7)The Authority shall issue a certificate of registration as an umbrella millers' association under this regulation in Form 2 set out in the First Schedule subject to such conditions it deems necessary.4. Registers maintained by millers
(1)A miller shall maintain a register of the registered out-growers' institutions, growers and other dealers in sugarcane or sugarcane products, with whom the miller has entered into an agreement for the farming or supply of sugar cane.(2)The register maintained under subregulation (1) shall contain—(a)the particulars of the registered out-growers' institutions;(b)the particulars of the growers;(c)the miller's location, land registration number, registration number, and agreement numbers;(d)the particulars of the sugarcane harvesters;(e)the particulars of the transporters; and(f)the particulars of the acreage, varieties, crop cycles and yield of sugarcane per acreage.5. Registration of growers
(1)A grower may register with any out-growers' institution of their choice.(2)A grower may register with a miller of their choice.6. Registration of out-growers' institutions
(1)An out-grower institution which has registered growers in accordance with regulation 5(1) shall register with the Authority.(2)An out-grower institution that intends to be registered as an out-growers' institution shall apply to the Authority for registration in Form 3 set out in the First Schedule.(3)The Authority shall consider the application made under subregulation (2) and—(a)within thirty days of submitting an application, issue to a successful applicant a certificate of registration; or(b)within fifteen days issue the applicant a notice of their rejection of the application specifying the reasons for the rejection.(4)An applicant who is dissatisfied with the rejection of their application made under subregulation (3)(b) may within fourteen days of the decision, resubmit the application after addressing the reasons raised in the rejection.(5)Upon resubmission of a satisfactory application under subregulation (4), the Authority shall issue the applicant a certificate of registration, within thirty days.(6)Where the Authority rejects an application resubmitted under subregulation (4), the applicant may appeal to Court within thirty days after the date the applicant receives the notice of the rejection.(7)The Authority shall issue a certificate of registration as an out-growers' institution under this regulation in Form 4 set out in the First Schedule subject to such conditions it deems necessary.(8)A certificate of registration issued under this regulation shall not be transferable.7. Obligations of a registered out-growers' institutions
(1)A registered out-growers' institution shall—(a)organize its out-growers' farms into viable economic units to enable its farmers pool resources for bulk procurement of farm inputs, services and machinery;(b)promote and represent the interests of its growers;(c)ensure that its members comply with their obligations as per their agreements;(d)negotiate the terms of supply of sugarcane to the millers;(e)co-ordinate the production, harvesting and transport of sugarcane to the millers;(f)provide financial credit or arrange for financing of its growers for the production of their sugarcane, land clearance and preparation, planting, cultivation and tending, harvesting, transport and the supply of goods and services relating thereto;(g)provide services, advice and assistance for its growers as may be required;(h)provide accounting services and record keeping services for its members in respect of their individual operations; and(i)purchase, sell or otherwise deal in, securing or providing such goods, materials, supplies and services as may be required by its growers.(2)An out-growers' institution which does not comply with the provisions of this regulation commits an offence and shall be liable on conviction to a fine not exceeding five hundred thousand shillings, or to imprisonment for a period not exceeding one year, or to both.8. Registers maintained by out-growers' institutions
(1)An out-growers' institution shall maintain a register of its members and the growers who have entered into an agreement with it for the farming or supply of sugarcane.(2)The register maintained under subregulation (1) shall contain the particulars of the locations, land registration numbers, identity card numbers, agreement numbers, sugarcane harvesters, transporters, acreage, varieties, crop cycles and yield of sugarcane per acreage of its members and the growers who have entered into an agreement with it for the farming or supply of sugarcane.(3)An out-grower institution which registers smallholder growers shall forward a copy of the register of their smallholder growers to the respective county government and to the Authority at least once in every six months.(4)A registered out-growers' institution shall notify the Authority of any change in its ownership, by-laws and shareholding.(5)A registered out-grower institution shall notify the Authority of the appointment of a principal officer or a director within thirty days of the making of such appointment.(6)An out-growers' institution which does not comply with the provisions of this regulation commits an offence and shall be liable on conviction to a fine not exceeding five hundred thousand shillings, or to imprisonment for a period not exceeding one year, or to both.9. Registration of umbrella out-growers institutions
(1)Registered out-growers' institutions may organise themselves into an umbrella out-growers' institution and register as such with the Authority to represent and advocate for the interests of its members and the growers who have entered into an agreement with it for the farming or supply of sugarcane.(2)An umbrella out-growers' institution that intends to be registered as such shall apply to the Authority for registration in Form I set out in the First Schedule.(3)The Authority shall consider the application made under subregulation (2) and—(a)within thirty days of submitting an application, issue to a successful applicant a certificate of registration; or(b)within fifteen days issue the applicant a notice of their rejection of the application specifying the reasons for the rejection.(4)The Authority may in consultation with the County Governments register an out-growers' institution as an umbrella out-growers' institution based on—(a)whether the institution is duly registered as an association under existing laws;(b)the by-laws or constitutional provisions relating to membership, voting rights, rights and obligations of members including the right to join or leave the institution; and(c)the number of its members.(5)An applicant who is dissatisfied with the rejection of their application made under subregulation (3) (b) may within fourteen days of the decision, resubmit the application after addressing the reasons raised in the rejection.(6)Upon resubmission of a satisfactory application under subregulation (6), the Authority shall issue the applicant a certificate of registration as an umbrella out-growers' institution, within thirty days.(7)Where the relevant county government rejects an application resubmitted under subregulation (5), the applicant may appeal to Court within thirty days after the date the applicant receives the notice of the rejection.(8)The Authority shall issue a certificate of registration as an umbrella growers' institution under this regulation in Form 2 set out in the First Schedule subject to such conditions it deems necessary.(9)A certificate of registration issued under this regulation shall not be transferable.10. Revocation and suspension of registration
(1)The Authority shall suspend the registration of a umbrella millers' association, an out-growers' institution or an umbrella out-growers' institution if—(a)the association or institution made a false declaration in the application for registration;(b)the association or institution engaged in corruption or fraud to obtain the certificate of registration;(c)without reasonable cause, the association or institution has not complied with a condition of its registration;(d)the institution has contravened regulation 7; or(e)the association or institution has not complied with the law under which it is registered.(2)When the Authority suspends the registration of an association or institution under subregulation (1), the Authority shall issue the association or institution a notice of the suspension.(3)The notice issued under subregulation (2) shall set out the reasons for the suspension and the corrective measures that the association or institution should undertake to reinstate their registration.(4)The Authority shall reinstate the registration of an association or an institution, who complies with the corrective measures set out in the notice issued under subregulation (3).(5)The Authority shall revoke the registration of an association or an institution, who does not comply with the corrective measures set out in the notice issued under subregulation (3).11. Returns by miller and out-growers' institutions
All registered millers and registered out-growers' institutions shall submit to the Authority and the relevant county government, annual returns of the registers maintained under this Part before the thirty-first date of January every year following the conclusion of the data collection period.Part III – AGREEMENTS FOR DEALING IN SUGARCANE AND SUGARCANE PRODUCTS
12. Agreements for the harvesting of sugarcane
(1)A grower may enter into an agreement with a miller, out-growers' institution or any other person, for the harvesting of the grower's sugarcane.(2)An agreement for the harvesting of sugarcane on behalf of a grower, shall be in Form 5 set out in the First Schedule13. Agreements for the transportation of sugarcane
(1)A grower may enter into an agreement with a miller, out-growers' institution or any other person, for the transportation of the grower's sugarcane.(2)An agreement for the transportation of sugarcane on behalf of a grower, shall be in Form 5 set out in the First Schedule.14. Agreements between growers and millers
(1)A grower may enter into an agreement with a miller for the farming or supply of the grower's sugarcane.(2)An agreement referred to in subregulation (1), shall be in Form 6 set out in the First Schedule.(3)Despite subregulation (1), a grower may enter into an agreement with a miller for the leasing of part of their land to the miller on the terms and conditions mutually agreed between them.15. Agreements between outgrowers' institutions and growers
(1)A grower may enter into an agreement with a registered out-growers' institution for the farming and supply of the grower's sugarcane.(2)An agreement referred to in subregulation (1) shall be in Form 7 set out in the First Schedule.16. Agreements between outgrowers' institutions and millers
(1)A registered out-growers' institution shall enter into an agreement with a miller for the farming or supply of the sugarcane on behalf of the growers who the institution have entered into an agreement under regulation 14.(2)An agreement referred to in subregulation (1) shall be in Form 8 set out in the First Schedule.17. Registration of agreements
A person who enters into an agreement in accordance with this Part shall submit the agreement to the Authority for registration.Part IV – MISCELLANEOUS PROVISIONS
18. Sugarcane development plans
(1)A miller shall develop and submit a sugarcane development plan to the Authority and the respective County Government.(2)An out-growers' institution shall develop and submit a sugarcane development plan to the Authority and the respective County Government.(3)A sugar development plan shall be based on the number of growers, the size of the land under cultivation, sugarcane varieties cultivated, yields of the sugarcane cultivated and the maturity profile of the sugarcane.(4)The purpose of a sugarcane development plan shall be to facilitate economic harvesting and transportation.(5)A sugarcane development plan shall be developed in consultation with the growers.19. Adequate milling capacity
(1)Subject to subregulation 19(2), a miller shall ensure that they have adequate milling capacity in accordance with the sugarcane development plan developed and submitted in accordance with regulation 18.(2)A miller shall operate their mill in accordance with the registered milling capacity, the terms of sugarcane throughput per day and the sugar recovery percent set by the Authority.(3)A miller may in writing apply to the Authority for authorization to change the installed milling capacity by more than twenty percent of the registered capacity.(4)A miller who makes any variation of the installed capacity without prior authorisation from the Authority, commits an offence.20. Report of changes to millers
(1)A grower who is a member of a registered out-growers' institution shall report any changes to the name of the grower's farm, land reference number or any other particulars, to the out-growers', institution the grower has registered with and the miller with whom the grower has entered into an agreement for the farming or supply of the grower's sugarcane.(2)An independent grower, shall report any changes to the name of the grower's farm, land reference number or any other particulars, to the miller with whom the grower has entered into an agreement for the farming or supply of the grower's sugarcane.21. Use of certified seeds
A grower shall only use seeds that are certified accordance with the Seeds and Plant Varieties Act (Cap. 326).22. Payment statements
(1)A miller shall issue a grower issue a grower with whom the miller has entered into an agreement in accordance with regulation 14, a payment statement that indicates the quantity of sugarcane delivered, the price and agreed deduction or recovery on the payment, as agreed upon by the grower and the miller.(2)A registered out-growers' institution shall issue a grower issue a grower with whom the institution has entered into an agreement in accordance with regulation 25, a payment statement that indicates the quantity of sugarcane delivered, the price and agreed deduction or recovery on the payment, as agreed upon by the grower and institution.(3)A miller shall issue a registered out-growers' institution with whom the institution has entered into an agreement in accordance with regulation 16, a payment statement that indicates the quantity of sugarcane delivered, the price and agreed deduction or recovery on the payment, as agreed upon by the miller and institution.23. Sugarcane Pricing Committee
(1)There is established a Sugarcane Pricing Committee.(2)The Sugarcane Pricing Committee shall comprise of—(a)a chairperson appointed by the Cabinet Secretary from amongst the members of the Sugarcane Pricing Committee;(b)one person nominated by the Ministry responsible for matters relating to agriculture and appointed by the Cabinet Secretary;(c)two persons nominated by the Authority and appointed by the Cabinet Secretary;(d)two persons nominated by the registered umbrella out-growers' institution and appointed by the Cabinet Secretary;(e)two persons nominated by the registered umbrella millers association and appointed by the Cabinet Secretary; and(f)two persons nominated by the Council of Governors from the county governments from the sugarcane growing areas and appointed by the Cabinet Secretary.(2A)In appointing persons under subregulation (2)(b), (c), (d), (e) and (f), the Cabinet Secretary shall take into account the gender, regional and ethnic diversity of the persons to be appointed.(2B)A person shall not be nominated for appointment under subregulation (2)(b), (c), (d)(e) and (f), unless the person has demonstrable experience, knowledge and skills in sugar pricing or similar relevant qualifications.(3)The quorum of the Sugarcane Pricing Committee shall be two-thirds of its members.(4)The members of the Sugarcane Pricing Committee who were appointed under subregulation (2)(d) and (e) shall hold office for a period of three years and shall be eligible for re-appointment only once for a further term of three years.(5)The members of the Sugarcane Pricing Committee who were appointed under subregulation (2)(d) and (e) may resign from office by a letter addressed to the Cabinet Secretary.(6)The office of a member of the Sugarcane Pricing Committee shall become vacant if the member—(a)has been absent from three consecutive meetings of the committee without the permission of the chairperson;(b)is adjudged bankrupt or enters into a composition scheme or arrangement with his or her creditors;(c)is convicted of an offence involving dishonesty or fraud;(d)fails to comply with the requirements of Chapter 6 of the Constitution;(e)is convicted of a criminal offence and sentenced to imprisonment for a term exceeding six months of to a fine exceeding ten thousand shillings; or(f)is incapacitated by prolonged physical or mental illness or is otherwise deemed unfit to discharge his duties as a member of the committee.(7)The objective of the Sugarcane Pricing Committee shall be to ensure equitable returns to the growers and millers.(8)The principal function of the Sugarcane Pricing Committee shall be to determine the Sugarcane Pricing Formula.(9)In determining the formula under subregulation (8), the Sugarcane Pricing Committee may consider —(a)revenue sharing between the grower and the miller;(b)the distribution of the proceeds of the milling of sugarcane among growers on the basis of sugarcane quality, sugarcane production and handling costs; and(c)the outcome of the sugarcane testing services.(10)The Sugarcane Pricing Committee may review the formula determined in accordance with subregulation (8) from time to time to provide for continuous improvements in sugarcane testing and revenue sharing systems.24. Sugarcane testing services
(1)The Sugarcane Pricing Committee may conduct sugarcane testing services to determine the sucrose content of sugarcane to determine the Sugarcane Pricing Formula.(2)The Sugarcane Pricing Committee may contract the services of an expert in conducting sugarcane testing services.25. Burnt sugar
(1)A miller may accept burnt sugarcane subject to the following conditions—(a)a grower had authorised the harvesting of his burnt sugarcane before the sugarcane was harvested;(b)the harvested sugarcane was delivered to the mill weighbridge while still fresh; and(c)sugarcane of an acceptable quality was harvested.(2)The authorisation referred to in subregulation (1)(a) shall be in the form of a separate agreement between a grower and a miller and shall set out conditions for the miller's acceptance the grower's burnt sugarcane.(3)An agreement referred to in subregulation (2) shall be in Form 9 set out in the First Schedule.26. Approved standards
(1)A miller shall manufacture, package, transport or store in a warehouse, sugar and by-products of sugar in accordance with the Kenyan specifications for sugar set out in the Second Schedule.(2)All brands for packaging, including a brand which is repackaged for sale by a distributor, shall register with the Authority for purposes of traceability.(3)A dealer shall apply for registration under subregulation (2) in Form 10 set out in the First Schedule.(4)The Authority shall issue a certificate of Registration in Form 11 as set out in the First Schedule to a successful applicant.(5)A person who fails to comply with subregulations (1) or (2) commits an offence and shall be liable on conviction, to a fine not exceeding five hundred thousand shillings, or to imprisonment for a period not exceeding one year, or to both.27. Stay of execution
Any person against whom a decision to revoke or suspend their registration, may request for stay of the execution of that decision for thirty days within which he may effect remedial action.