Nzoia sugar owes cane farmers Sh113 million in arrears

Nzoia sugar company says it owes contracted farmers Sh113 million for cane deliveries made in 2019.

The firm's chief executive officer Wanjala Makokha said they were working on a realistic payment plan that will help them clear the arrears and current payments.

In a press release to the media, Mr Makokha said payments would be made on Tuesdays and Fridays to fast track the process.

“We would like to inform all our contracted farmers that we are back on track and we intend to clear all current payments as we continue to reduce 2019 arrears as per our payment plan,” read the press release dated November 9 and signed by the managing director.

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Mr Makokha said there were farmers’ arrears dating back to 2017 totaling to Sh8.1 million when the factory resumed operations on February 14, 2020. “This amount was cleared.”

He clarified that government money released earlier was paid directly to the farmers’ accounts which the company had earlier forwarded for that particular purpose.

An earlier arrangement by the firm to make current payments under 30 days was derailed by challenges with the company accounts and the factory plant according to Makokha.

Mr Makokha had earlier dragged Kenya Revenue Authority into the firm’s woes by claiming that the agency had deducted some funds from the firm’s accounts.

“KRA deducted Sh20 million from the account without even informing us and this was the money meant to pay cane farmers. I'm working round the clock to see to it that we pay farmers and they should be just a little patient as I sort out their issues. I can assure them that they will get paid soon,” Makokha told The Standard on phone last week.

But KRA, when reached for comment, was categorical that it was bound by law not to reveal tax affairs of an individual or company unless it was a case under investigation.

Nzoia sugar company has also dismissed claims that it had become insensitive to the plight of the farmers.

“The chief executive officer has been engaging stakeholders on radio at least every month and one of the topics of discussion has been the status of farmer’s payments. He has also set aside Fridays to attend to farmers with unique cases,” read the press release in part.

Last week, farmers contracted to the sugar mill protested the delayed payment accusing the management of reneging on the promise to pay promptly.

Some of the farmers claimed not to have been paid for cane delivered in 2017 calling on Mr Makokha to address the issue.