Emergence of 'ghost' farmers delays Mumias Sh500m debt payment plan

President Uhuru Kenyatta and his Deputy William Ruto hand over Sh1 billion dummy cheque to Mumias Sugar Company Chairman Dan Ameyo (second left) last month. Looking on are Kakamega County Governor Wycliffe Oparanya (left) and Senator Dr Boni Khalwale (centre). [Photo: Benjamin Sakwa/Standard]

Cane farmers who supplied their cane to Mumias Sugar Company will have to wait for the company to weed out ‘ghost’ farmers who have infiltrated the payment list before getting their proceeds.

The situation has forced audit firm, KPMG and officers from the company to scrutinise farmers’ list by making physical verification of their plots to establish if they supplied Mumias with cane. The exercise is meant to save the company from losing money to ‘fake’ farmers.

Those with arrears below Sh20,000 were to be paid last Friday, but most of them returned home empty handed. John Omondi, a farmer contracted by the company harvested his cane in July last year but is yet to be paid.

“I supplied my cane to Mumias last year, up to now I have not received my payments. The company owes me Sh16,000. Those with below Sh20,000 were to be paid on Friday last week but nobody was paid,” said Omondi.

In an interview with The Standard at the factory, the out-going Managing Director Coutts Otolo confirmed the delayed payment and attributed it to ‘ghost’ farmers who have penetrated the list. He confirmed that the company had received Sh1 billion bailout cash from the Government and the management was finalising the expenditure plan for the money.

“The company received the money, the process of paying farmers is on-going but we are worried of ‘ghost’ farmers on the list of payment. Our officers are physically verifying farmers’ plots and we expect the process of verification and validation to end by July 21, 2015,” said Otolo.

Settle debts

He assured farmers they will be paid their dues by the end of the week as they have set aside over Sh500 million to settle debts owed to farmers since last year. “I understand farmers’ frustrations for not having been paid for over a year yet they supplied their cane to the company. Some have started uprooting their cane or taking it to other sugar millers in the county. I assure them that we are committed to paying them their arrears by end of this week. We appeal to farmers to exercise patience,” he assured.

Mr Otolo revealed that employment of at least 50 of the company staff members was terminated after some allegedly infiltrated the list with names of ‘fake’ farmers.

“The management terminated services of at least 50 staff members whom we believe had a hand in trying to swindle the company’s money through ‘ghost’ farmers,” Otolo said.

Otolo told Standard that his one year stint at the helm of the firm was a difficult one due to threats from debtors, but remained optimistic it would bounce back to glory.