REVIVAL BOOST

Cane farmers, leaders welcome waiver on millers' Sh62bn debts

Say companies should now direct all available resources to development of the crop.

In Summary

• Kakamega Governor Wycliffe Oparanya and Devolution CS Eugene Wamalwa welcomed the decision by the government.

• Athman Wangara said that the move by the government will restore confidence in farmers to resume cane farming.

Tractors carrying sugar canes drive to an open yard within the Mumias sugar factory on February 24, 2015. REUTERS/Thomas Mukoya
Tractors carrying sugar canes drive to an open yard within the Mumias sugar factory on February 24, 2015. REUTERS/Thomas Mukoya

Cane farmers and leaders from Western have welcomed the government's waiver of Sh62 billion debts owed by sugar millers in efforts to revive the sugar sector. 

Agriculture CS Peter Munya on Thursday announced the waiver and start of the process of leasing five state-owned millers to address governance issues.

Simon Wesechere, Kenya National Federation of Sugar Cane Farmers deputy secretary general, said the move is a major boost to the troubled sector.

 

“The huge debt portfolio by sugar millers has been a major impediment to their revival. We are happy because the government is finally implementing what we have been advocating for in the last six years,” Wesechere, a farmer in Mumias sugar belt said.

Wesechere said that the millers should now direct all available resources in cane development with the support of the agronomy department to improve production.

He said cane development should be staggered to ensure a continuous supply of the raw materials to the millers throughout the year.  

Musa Ekaya, a cane farmer in the Mumias zone, said that the government should also address management issues in the state-owned companies to complete the process of revival.

He said the government should also gazette sugar industry regulations to end unfair competition practices and restore sanity in the sector, especially as regards zoning, out-grower institutions, sugar importation among others.

"Just suspension of sugar importation is short term. We want the regulations to be clear that only millers will qualify to be licensed to import sugar to avoid saturating the markets and making it difficult for millers to sell locally manufactured sugar," Ekaya said. 

Athman Wangara said that the move by the government will restore confidence in farmers to resume sugar cane farming.

 

He said that cane farmers felt that they had been ignored by the government and started uprooting the crop because waivers were only granted to the dairy, coffee, tea and pyrethrum sectors as the sugar sector reeled under huge debts.

"As farmers, we were feeling orphaned because no one seemed to listen to our problems. We want the government to follow up to ensure the waiver has happened and those being appointed to manage the factories are given key deliverables," he said.

He said that entities that will lease the five factories must not be collaborators of politicians out to frustrate farmers so they can run the firms down and pave the way for sugar importation.

Kakamega Governor Wycliffe Oparanya and Devolution CS Eugene Wamalwa welcomed the decision by the government.

Oparanya said the move will help in reviving the ailing sugar sector in the country.

"I thank the President for the move that is a step forward in the efforts to revive the sugar sector. Leaders rubbishing the move should stop petty politics and focus on development matters," Oparanya said.

Wamalwa said the leadership in the region was confident the sugar industry will be vibrant again.

Mumias Sugar Company has been under receivership since September last year. The KCB group took over its management after over one year of closure due to a huge debt portfolio and inadequate raw materials.

Its closure affected hundreds of thousands of residents who depended on the company both directly and indirectly as employees lost their jobs due to the firm's financial hiccups.   

The county government of Kakamega has set aside Sh100 million for cane development within the county this financial year as part of the revival plan for Mumias Sugar Company.

A sugar sector task force co-chaired by former Agriculture CS Mwangi Kiunjuri and Oparanya cited poor governance, huge debts portfolio and lack of raw material as key causes that led to the collapse of the firm. 

(edited by o. owino)

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