State pays farmers’ debt after 19 years

Farmers have already started receiving payment for the milk they supplied to KCC in 1999. [File, Standard]

The Government has finally started paying milk farmers money owed to them by the collapsed Kenya Co-operative Creameries (KCC).

KCC owed the milk farmers millions of shillings by time it went under.

In Mt Kenya region, farmers have already started receiving part of the Sh500 million bailout announced by the Government through their co-operatives.

The debt arises from deliveries of milk to KCC, which collapsed in 1999 due to financial problems. Most of the farmers who delivered milk to the firm then are now elderly.

It was later placed under receivership, until the Narc administration took over its control in 2003 and renamed it New KCC.

Bailout plan

The bailout plan was announced by Deputy President William Ruto in March when he launched the repayment schedule at the KCC factory in Kiganjo, Nyeri.

Mr Ruto issued cheques worth Sh58 million to dairy farmers from Nyeri, Kajiado, Murang’a, Embu, Meru and Laikipia.

In Nyeri, dairy farmers have been given Sh20.3 million through their co-operatives.

The county’s Executive for Agriculture, Robert Thuo, yesterday confirmed that the money had already been disbursed to the farmers’ accounts.

“The only farmers who are yet to receive their funds are members of Naromoru Farmers Society who delayed in submitting their accounts,” Thuo noted.

Endarasha Dairy farmer Benjamin Wangai confirmed that some farmers have been paid.

Second phase

“We have some farmers who have been paid. Others are still awaiting and its not clear why there are delays in disbursing the funds,” he said.

Most dairy farmers in Embu County have already been paid.

According to New KCC Runyenjes plant manager Sammy Nderitu, about 400 farmers and others in 15 groups were paid a total of Sh7 million.

“Those left out will be considered during the second phase,” he said.

Michael Gitonga, a prominent farmer, who is also an official at the plant said 80 per cent of the farmers have been paid although he could not state the amount they got per litre of milk.

He said most farmers gave their details to New KCC officials and the money was wired to their accounts.

Embu Commissioner of Co-operatives David Muriuki revealed there were no records detailing how much each farmer was owed. Consequently, the farmers were asked to produce documentation to prove that they supplied milk to KCC.

Meanwhile, Meru dairy farmers have received a shot in the arm after the Government waived their Sh449 million debt.

Meru Dairy Union Executive Kenneth Gitonga said the farmers had been greatly weighed down by the debt.

“The waiver of the debt is going to help the farmers a lot  because they are now going to access more financing in their dairy production,” said Mr Gitonga, who oversees the union with a capacity to process 300,000 litres of milk annually.

[Stories by Lydiah Nyawira, Joseph Muchiri, Phares Mutembei and Munene Kamau]