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Cane farmers petition Treasury to clear Sh59 million millers' debts

By Kepher otieno | May 9th 2016

Cane farmers in Western Kenya want the Treasury to speed up the writing-off of Sh59 billion in debt to clean the books of sugar millers that are earmarked for privatisation.

The farmers’ appeal comes as the European Union pledged Sh800 million to train farmers on the importance of privatisation in improving their economic fortunes.

Farmers were informed that privatising the state-owned sugar factories would lead to improved enterprise performance besides improving their earnings from cane deliveries. Yesterday, Kenya National Federation of Sugarcane Farmers officials appealed to Treasury Cabinet Secretary Henry Rotich to honour the presidential decree and settle the debts.

Federation Secretary General Ezra Okoth and Deputy National Chairman Charles Atyang, said investors would be discouraged if the current debts remained on the millers' books.

“The factories will not attract investors given the huge debt load that crowds their ledger books,” argued Mr Etyang.

Mills that are due for privatisation include Sony, Nzoia, Miwani, Chemilil and Muhoroni sugar mills. The proposed privatisation is expected to improve the factories operations and make the ills economically viable. The mills are currently operating with rundown technology or dilapidated machines.

But even as the good news of the planned privatisation remains on the cards, majority of cane farmers are far from prepared to buy shares in the firms. Mr Okoth and Atyang urged the county government to help marshal the farmers to save some of their earnings so as to enable them take part in the sale of these important assets.

The farmers also hope some of the shares in the state firms would be reserved for them besides being offered financing facility to enable them own part of the mills.

“We want to believe that the Government is not privatizing the mills just to raise money but also to empower the farmers economically,” said Atyang. Okoth emphasized on the need to give the sugar growing Counties priority to buy equity on behalf of the farmers and transfer the same when the farmers are ready.

The planned sale of the sugar factories was announced in September by President Uhuru Kenyatta when he opened last year’s Nairobi International Trade Fair.

Kenya has been granted a one-year extension on sugar-import limits from the Common Market for Eastern and Southern Africa (Comesa) to safeguard local millers from outside competition.

This is the sixth extension and it is envisaged to run through to March 2017. The sugar factories serve farmers in Kisumu, Bungoma, Kisii, Narok, Kericho, Migori, Homa Bay, Kakamega, Busia and Nandi counties.

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