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Muhoroni pays sugar arrears as counties eye ailing millers

By Kepher Otieno | January 3rd 2020 at 12:00:00 GMT +0300

Sugarcane is transported to the Chemelil Sugar Factory in August 2018. [File, Standard]

A sugar miller has cleared arrears owed to farmers dating back to 2017/2018 financial year.

Muhoroni Sugar Company General Manager Nahashon Osieko disclosed that the firm has paid Sh180 million, which was part of the Sh2.6 billion owed to farmers by State millers countrywide.

"The money was released in the last week of December. We have crossed the year with no pending arrears," Mr Osieko said when he visited The Standard offices in Kisumu yesterday. 

He, however, added that the miller was yet to pay Sh50 million for sugarcane that was delivered between November and December.

The manager said although President Uhuru Kenyatta had ordered that farmers be paid last year, other factories were yet to get money to settle the debts.

While Osieko assured farmers of better times ahead and encouraged them to cultivate more cane, he also revealed that the miller was experiencing a production shortfall due to erratic supply of the crop.

Muhoroni currently has 16,000 hectares of land under cane but the miller has been sharing the available cane with rival sugar mills operating in the area such as Kibos Sugar Factory.

Poach cane

"Our main problem is rival competitors who poach our cane. This is because they invested in expansion and setting up of new factories in the Nyando sugar belt but did not invest in cane production," Osieko said.

He revealed that the factory was barely meeting its production targets due to the shortage of raw materials.

"We have to accumulate cane for three days and mill," the MD said.

As a result, Muhoroni’s sugarcane production has fallen by 50 per cent with the factory milling an average of 1,100 tonnes each day against the installed capacity of 2,200 tonnes of cane.

Osieko expressed optimism that the numbers would go up in the coming weeks following the anticipated reduction of heavy rains, which, coupled with bad roads, had affected the transportation of cane to the factory.

One of the contracted farmers, Noah Opiyo, said they were happy the government had responded to their plight.

But the reality is a lot grimmer for fellow farmers who want the government to pay them over Sh1 billion in arrears for cane delivered to other factories last year.

They also want the national government to bail out cash-strapped millers to salvage the sugar sub-sector from collapse.

During an interview on Wednesday, Kenya National Sugarcane Federation Secretary General Ezra Okoth made a passionate appeal for the State to release a task force report on the struggling sector.

The report was presented to President Kenyatta last year to update him on the problems ailing the industry and suggest possible solutions.

"We fear that unless payments to farmers are released to enable them raise school fees, many are likely to be stranded with their children," said Mr Okoth.

He disclosed that Sony, Chemelil, Nzoia and Mumias sugar factories have not paid up for cane delivered.

"The firms owe farmers over Sh1 billion for cane supplied to them in the last eight months," Okoth said.

Frustrated farmers

He encouraged farmers not to lose hope even as frustration grew over lack of payment."We want farmers to continue growing cane as we nudge the State to pay its debts," said Okoth.

Kakamega Governor Wycliffe Oparanya also asked the Government to write off the sugar industry's debts or hand over management of the millers to the counties.

Speaking on Wednesday, Mr Oparanya said if the State was reluctant to bail out the millers, the counties were prepared to take over the factories' management that are 98 per cent owned by the national government.

"It defies economic logic for the industry to reel in deep financial crisis as the State gleefully watches cane growers suffer while agriculture is devolved," the governor said.

Oparanya said smallholder agriculture was crucial for rural economic growth, adding that sugarcane farming was central to the improvement of livelihoods and a pathway out of poverty.

The Vision 2030 programme identifies agriculture as one of the key sectors that will bolster the State's economic plan to deliver 10 per cent annual growth.

"It envisages farmers, the government and private players working together to achieve this, and that is why we want to see the State revive the sector," said Oparanya.

Muhoroni Sugar Company Cane farmers Arrears
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