The financial woes facing state-owned sugar companies in Nyanza region have been cited as the major impediment to the industry's growth and sustainability, a parliamentary committee has heard.
The Joint Committee on Finance and Agriculture under the leadership of Kuria Kimani (Molo) and John Mutunga (Tigania West) is concerned with the debts which currently stand at Sh128 billion.
“The financial woes are staggering. Factories have a huge collective debt making it a key hindrance in this revival process,” Kimani said.
The Committee is in Kisumu to meet stakeholders as part of the plans in place to address the pressing issue of reviving and commercializing state-owned sugar companies.
Leaders from Kisumu and Migori who appeared before the Committee called for the fast-tracking of payment of arrears owed to cane farmers and sugar factory workers.
Farmers, they said, have not been paid for the last 10 months and workers for 11 months.
John Makali (Kanduyi), James K’Oyoo (Muhoroni) and Walter Owino (Awendo) called for support in writing off the debt and tax penalties of the sugar companies.
“A clean financial record will provide an opportunity for the companies to commercialize without debt,” Owino said.
Proposals to lease community-owned land for sugar cane farming gained traction, with MPs Justice Kemei (Sigowet/ Soin) and Gabriel Kag'ombe (Gatundu south) arguing that this approach could help boost yields and reduce the burden on smallholder farmers.
"Land is a very emotive issue. This was community land that was donated to the government for some of these factories,” said Kemei.
The MCAs also voiced their support for the leasing of land, rather than the selling of factory land opposing the merger of factories as proposed by the National Treasury in their memorandum.
Instead, they suggest developing a formula for leasing land from farmers with a guaranteed percentage for farmers.
Members of the joint Committee are expected to meet with farmers' representatives, the management of the five public-owned sugar mills, including Nzoia Sugar Company, Chemelil Sugar Company, Miwani Sugar Company (in receivership), Muhoroni Sugar Company (in receivership), and South Nyanza Sugar Company (SONY) and the Competition Authority of Kenya.
