KENYA – Agriculture and Food Authority (AFA), a state Corporation established to regulate, develop and promote scheduled crop value chains for increased economic growth in Kenya, has committed to releasing Sh17.2 million (US$137600) owed to more than 500 sugarcane farmers affiliated with Mumias Sugar Company.
In a letter dated January 23 from the industry regulator addressed to the current management of the miller, the authority has committed to releasing the money withheld by the AFA over dormant accounts to the farmers.
The letter reads: “The government availed funds to the authority for the settlement of long-standing arrears to farmers who supplied cane to Mumias Sugar Company Limited. Whereas most farmers were paid, some funds bounced back on account of closed, dormant, or wrongly captured account details,” read the letter in part.”
“The purpose of this letter is to request you to assist in identifying the farmers on the attached list, to obtain their correct account details to facilitate settlement.”
According to Boniface Manda, a grower from Mumias West constituency, farmers have welcomed the news as they have been waiting for the money for nearly four years.
“We are happy that finally, the money has come, this will encourage the farmers to revert to sugarcane farming. The affected farmers must be able to submit their correct details at their nearest chief offices for verification to make things easier,” said Manda.
In 2021, the government leased the assets of Mumias Sugar Company to the Uganda-based conglomerate Sarrai Group for 20 years.
However, the government excluded assets in the firm’s ethanol and cogen plants, which were seized by Pan-African lender Ecobank and French development financier Proparco from KCB Group.
“Although the lessee is not in sugar production in Kenya, he has a proven track record of running three sugar factories, a distillery, and power generation in Uganda and is committed to commence rehabilitation of assets immediately to ensure the revival of operations within the shortest period,” the miller’s receiver-manager Pongangipalli Venkata Ramana Rao disclosed.
Commenting on the news of the disbursement, Simon Wesechere, deputy secretary general of the Kenya National Federation of Sugarcane Farmers, challenged AFA to redirect its attention to sugarcane development as soon as it paid the arrears.
According to Wesechere, AFA has not been doing well in the area of cane development, and this has caused an acute shortage of raw materials and an unwarranted scramble for the scarcely available raw materials among sugar mills in Western Kenya.
The western region has been the highest sugar producer, with the cash crop being a major income earner for many families.
The region has five sugar factories namely, Mumias, West Kenya, and Butali sugar companies, all based in Kakamega and others in Bungoma and Busia.
For the longest time, Mumias Sugar had been the largest sugar miller in the region but has faced numerous closedowns due to financial crises, which among others included failure to pay farmers.
The miller has the capacity to process 8,000 tonnes of sugarcane a day and owns a cane-growing nucleus of 4,000 hectares.
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