Sugarcane farmers to get Sh500 million loan boost

By PETER ORENGO

Government through the Kenya Sugar Board has released Sh500 million as loans to cane farmers, in a move aimed at easing sugar shortage.

The programme which is a revolving fund is being loaned to cane farmers through the Agricultural Finance Corporation (AFC), and aims to support the achievement of competiveness in the sugar subsector in preparation of the removal of the COMESA safeguards.

The loans will be availed to all sugarcane farmers who have one hectare and above, or those who can come together in blocks, to make one hecatare and above.

"We established that since out-grower institutions are not financial institutions, the arrangement is not working well. We want cane farmers to be handled by an institution that handles other farmers," said Sally Kosgei, Minister for Agriculture.

She said another Sh2 billion is expected to be released to AFC from Finance Ministry following the passage of a parliamentary Bill to provide grants to cane farmers to boost their production.

The Minister said the farmers will be charged an interest of 5 per cent, which is the lowest rate in the market and are repayable for over a period of three crop harvests.

To avoid diversion and misapoproation, Kenya Sugar Board and AFC will undertake tranche disbursements and intensive periodic monitoring of the loans to ensure they are utilised for the intended purpose.

Kosgei who was speaking at the cheque presentation ceremony at the Agriculture Ministry office said the government intends to ensure Kenya is totally self sufficient in Sugar.

The funds beneficiaries are millers, growers, out-grower institutions, Kenya Sugar Research Foundation (KESREF), small scale transporters and land preparation contactors.

"The fund offers attractive interest rates that will benefit all the cadres in our society. Repayment will be in three instalments 40 per cent, 30 per cent and 30 per cent," said Lucas Meso, the AFC managing Director.

He said so far 1400 farmers have benefitted from the Sh634 Million that was disbursed under phase one of the fund in 2006. It involved the establishment of 9,100 acres of sugarcane, which led to the production of 686,000m Tonnes of cane.