• Sugar companies have acquired fresh debts amounting to Sh150 million barely a fortnight after the government cleared Sh1.9 billion debt owed to sugarcane farmers.
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Sugar companies have acquired fresh debts from new cane amounting to Sh150 million barely a fortnight after Government cleared Sh1.9 billion debt owed to sugarcane farmers.
Mumias Sugar Company has arrears Sh10.65 million, Chemelil Sugar Sh61.13 million and Nzoia Sugar Company Sh78.48 million.
This amounts to Sh150, 273, 751 million. On March 11, agriculture Cabinet secretary Mwangi Kiunjuri said the government has paid Sh1.9 billion of the Sh2.7 billion owed to farmers who directly supplied cane to the state owed companies.
He said the Sh808, 000 million remaining will be factored in the supplementary budget to clear debts.
Kiunjuri was speaking in Kisumu during a sugar industry forum that was attended by Governors, Senators and MPs from the Lake Region Economic Bloc.
Andrew Tuimur, the agriculture chief administrative secretary said privatisation is the only way to address challenges in the sugar industry.
He said the government has continued to bail out sugar companies for a long time but this is not the solution.
“Even as the government is paying the accrued debt of Sh2.7 billion owed to sugarcane farmers, there are companies that have fresh debts. So much money has been spent and there is no value for it. Privatisation is the solution to this problem,” said Tuimur, who spoke to the Star yesterday on phone.
Solomon Odera, the interim head of Sugar Directorate at the Agriculture and Food Authority explained that farmers owed by Chemelil have not been paid.
“So the Sh61, 131, 210 million is part of the remaining Sh808, 000 million that the government id yet to pay,” he said.
The Privatisation Commission chaired by Paul Otuoma has been conducting public participation at individual factories and the exercise is meant to determine the status of each factory and give recommendation one those that need privatisation.
In February, Otuoma said the process of privatisation has been cumbersome, but there was light at the end of the tunnel.
“We want to make the sugar industry more profitable and see farmers dividends rise. We also want to try and get strategic partners to make the sugar industry more efficient as we improve crop production as it was recommended by Comesa in 2000,” he said.