chapter  3
22 Pages

The Mumias Sugar Company: A Nuclear Estate in Kenya

WithSimon Williams

The Mumias Sugar Company (MSC) is a joint venture of the Government of Kenya (GOK), the Commonwealth Development Corporation (CDC, Chapter 13, Section 1), Booker Agriculture International (BA, Chapter 13, Section 11), and the East African Development Bank. In addition to its investment, BA manages the enterprise under contract. MSC is a model of what is called a "nucleus estate," a system that integrates a core processing plant, a corporate plantation that ensures a supply of highquality raw material, and an outgrower or "satellite farming procurement program" into which large numbers of small-scale farmers are drawn.

The achievements of the company, which began production in 1974, have been remarkable. In one decade, a poverty-stricken sub-subsistence area with no background of sugarcane production has been converted into a cash economy. The sugar mill now produces roughly half the sugar consumed in Kenya. Twenty-three thousand outgrowers are under contract, supplying 88 percent of the cane requirement. Exclusive of its impact on the farmers, the enterprise employs 5,000 people full time and upwards of 9,000 part time. In ten years, as the sole commercial force in the area, the company has dramatically altered the economic and social characteristics of an area embracing several hundred thousand people.

There are two distinctly different systems of interaction with the local people in operation. With employees of the sugar mill and the plantation, MSC is almost totally involved. Villages have been created to provide housing for the majority of workers and the company provides all of the supporting services, including medical. Technical training facilities are extensive and upward mobility is a common thread of opportunity throughout the enterprise. The enterprise site is a bustling center of energy, almost startling in its impact on an observer first visiting this remote part of Kenya. Relationships with contract farmers are close and continuous insofar as they relate to technical supervision of sugarcane cultivation, but are deliberately 36somewhat withdrawn in terms of community and human development.

Unlike the decision of Hindustan Lever Limited (HLL) in the Etah District of India (Chapter 2), for example, MSC tends to hold back in taking responsibility for how the people in the area capitalize on their new opportunities and build for their future outside of the environment of the company. This responsibility, it is strongly felt, belongs to the Government of Kenya. To facilitate bringing the people and their government together, the farmers have been brought into their own organization, the Mumias Outgrowers Company, intended ultimately to be the local agency for development and the interface between the local people and the company, and between the local people and government officials. As the case reveals, this methodology raises basic questions: Can one organization effectively relate to 23,000 farm families? With what resources of money and talent is the organization to be endowed? Where are these resources to come from, with what strings attached?

The questions raised by this important case are not meant to imply criticism. Rather, they reveal unusual opportunities to build the Mumias area into a second generation of development success on the foundations of constructive change that has been introduced.