State gives Mumias Sh830m as bailout to pay farmers
Agriculture Cabinet Secretary Willy Bett (left) with a Rockefeller Foundation director C.D. Glin in Nairobi on June 21, 2016. Mr Bett said on August 10, 2016 that Mumias Sugar Company will receive money from the State to clear farmers arrears. PHOTO | SALATON NJAU | NATION MEDIA GROUP
What you need to know:
- Agriculture Cabinet Secretary Willy Bett said arrangements to release the money were complete.
- Mr Bett said the arrears had made it difficult for farmers to invest in sugarcane development.
- The move was welcomed by Mumias board chairman Dan Ameyo, who said the money will be put into proper use.
Mumias Sugar Company will receive Sh830 million from the government to enable it to clear arrears with farmers.
Agriculture Cabinet Secretary Willy Bett said arrangements to release the money were complete. The firm owes sugarcane farmers Sh700 million.
“We are working on the matter and the money will be given out very soon,” Mr Bett said during a tour of the factory.
He said the arrears had made it difficult for farmers to invest in sugarcane development.
“The government is committed to helping the miller back on its feet to safeguard the livelihood of ordinary farmers, which is at stake,” he said.
The CS said a regulatory framework was in place to benefit farmers and millers.
“We have instituted enforceable contract agreements between millers and the farmers,” said Mr Bett. “This will ensure there is plenty and quality raw materials.”
The move was welcomed by Mumias board chairman Dan Ameyo, who said the money will be put into proper use.
“We still require the remaining Sh830 million for the company to be stable,” said Mr Ameyo, adding that Sh1 billion was used to pay farmers the money they were owed.
Mr Ameyo called on farmers to look at sugarcane farming as a business and start investing in cane production. He said the interest rate for cane development costs financed by the company will be reduced from 17 per cent per year to 11 per cent.
“We want to foster farmers’ loyalty and bring back farmers who have uprooted their cane crops due to low returns,” he said.
Mumias targets robust and early-maturing sugarcane varieties to improve yields and address shortages. The introduction of cane varieties is part of the miller’s strategy to ensure the supply of cane to sustain milling operations.
Mr Bett however warned that the government will not bail out failed commercial institutions.
He said State-owned companies, particularly sugar firms, should be contributing immensely to the exchequer instead of crying out for government financial support.
“We are not going to tolerate such companies which keep on draining the exchequer,” he said.
