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September 25, 2018

Nyanza farmers lament frustrations by sugar millers

Isaac Odero a farmer in Miwani and Muhoroni zone says cane farming has been declining due to poor payments by state-owned millers. 

Odero, who has been farming cane on his 200-acre farm for 25 years said initially, cane farming was a booming business until the state-owned millers started  experiencing financial problems. 

He said, when the factories were vibrant payments were prompt but this took a turn for the worse. 

 “The government-owned factories have really frustrated farmers and if it were not for private millers, many would have abandoned the crop long ago,” he told the Star.

Currently, private millers pay Sh3,700 per tonne for burnt cane and between Sh3,900 to Sh4,000 for green cane within a week or month of delivery due to stiff competition among them.

Kenya Sugarcane Growers Association secretary general Richard Ogendo said farmers are abandoning cane farming for sorghum, vegetables, maize, beans and coffee. Other are now growing trees. 

 Already, operations at Chemelil, Muhoroni and Miwani sugar companies have ground to a halt due to cane shortage, which is further compounded by managerial and financial problems.

According to Ogendo, the three factories were established to stem the rural urban migration with a clear policy on how the raw material was to be sourced and maintained.

The factories were required to develop their own sugarcane nucleus estates. They were also expected to funds farmers apart from offering extension services.

Ogendo said the payment structure was such that cane cutters were paid weekly and transporters every fortnight, while farmers were paid monthly.

This, he said, led to the rapid expansion of infrastructure around these factories, which led to establishment of towns around them.

“With the collapse of the industries, the economies of Muhoroni, Miwani and Chemelil are in shambles. Circulation of money has gone down,” Ogendo said.

 He added that most of traders in the region have moved to other towns in the neighbouring counties.

“The towns are no longer lively like before because people lack jobs and businesses are not booming anymore,” Ogendo said.

Currently, Miwani is in receivership and completely dead. This has made it a ghost town. The plant has also been cannibalised and insecurity is a nightmare as idle youths have resorted to crime.

 “We are experiencing an increase in spates of crime such as gender-based violence, cattle rustling, robbery, murder, rape and defilement,” Ogendo said.

The poverty level is high and families previously solely dependent  on cane farming are unable to take their children to school.

Chemelil, which is also currently closed, was the giant of Nyando sugar belt having been curved out of the nucleus of Miwani.

The company owes employees Sh315 million in seven-month salary arrears.

Managing director Gabriel Nyangweso said the factory's crushing capacity is down at 2,500 tonnes, down from 3,000 tonnes.

He blamed this on cane shortage, poaching and lack of proper factory maintenance. Nyangweso said millers should prioritise sugarcane development to address the shortage.

Ogendo said cane poaching started with the entry of private firms such as West Kenya, Kibos and Sukari.

He said the private companies have slightly helped to ease the tough times facing state-owned millers  but there are complainants that they employ many expatriates from India for jobs that can be done by locals.

Ogendo added that the private millers lure farmers to sell them cane developed by state-owned industries, resulting in a massive lack of raw materials for the public firms.

Currently, Kibos and West Kenya have weighbridges right at the doorsteps of Chemelil and Muhoroni, which face a bleak future.

Muhoroni, which is state-owned, was shut down for six weeks on May 21 for what the management attributed to cane shortage. The closure came days after the Kenya Revenue Authority demanded Sh861 million in tax arrears.

The factory, currently under receivership, is being managed by general manager Nashon Osieko.

He said the issues bedeviling Muhoroni are mainly regulatory, claiming that KRA raided their accounts making them unable to pay farmers and transporters.

He said the company owes farmers more than Sh470 million. It also also owes suppliers more than Sh250 million and about Sh107 million to its staff.

“The sugar miller owes KRA historical arrears of Sh 861.7million. This is the debt position of the company,” he said.

Receiver managers Asa Okoth and Fredrick Kebeney have been replaced by Elisha Ooko and Harun Kirui. 

 Kebeney and Okoth said lack of cane and huge debts have disabled operations making them unable to pay farmers and suppliers.

Okoth said Muhoroni has a Sh26 billion debt accrued through penalties of bilateral and loans.

Kenya National Federation of Sugarcane Farmers Muhoroni branch chairman Charles Anyumba asked the government to expeditiously resolve the problem facing the state-owned factories.

 He accused the current management of incompetence, and said the government should place the factories under new hands. 

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