Sugarcane farmers pay for the sins of mismanagement

Tuesday September 12 2017

Mumias Sugar Company

President Uhuru Kenyatta and his deputy William Ruto (both in white overcoats) are taken on tour of Mumias Sugar Company on July 11, 2017. Listed on the stock market, Mumias controlled the Kenyan market with a quality product. PHOTO | ISAAC WALE | NATION MEDIA GROUP 

By SHABAN MAKOKHA
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By ANGELA OKETCH
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Publicly-owned sugar factories in western Kenya face a gloomy future due to years of cane poaching, corruption and mismanagement.

Some factories, like Mumias, have not paid their workers for as many as seven months.

At Chemelil, employees have not received salaries for five months.

MUMIAS
The effects of this economic sabotage are biting even more among the thousands of farmers contracted by the factories.

Many are unable to pay fees for their children and foot medical bills.

The situation is especially dire in the Mumias sugar belt where, for years, many thought this behemoth was too big to fail.

Listed on the stock market, Mumias controlled the Kenyan market with a quality product.

BUSINESS VENTURES

At the height of its success, it branched into other product lines like bottling water and even producing power, which it plugged into the national grid.

It developed one of Kenya’s best football stadiums and sponsored a team that won the Kenya Premier League.

But unknown to many, these projects took away resources from cane development and the company is now regretting them.

“Many things were not done in the right way at Mumias leading to deterioration of operations in terms of cane development and factory maintenance.

"The management engaged in projects, which consumed a lot of money without focusing on cane development,” Mr Nashon Aseka, the managing director brought in to revive the company, said.

EDUCATION
Poor farmers who used to educate their children through payments from the company are now begging school heads to accommodate their children as they seek alternative means of raising funds.

Mr Godfrey Owori, the Principal of St Peters Mumias, revealed that many students from sugarcane-growing homes are now on the school “sympathy” arrangement.

“Since Mumias Sugar went down, we are forced to send children home regularly for school fees. Initially, parents would bank their contracts with us to deduct fees from their cane proceeds,” Mr Owori said.

CONTRACTS

Parents, he said, feel frustrated in supporting school programmes because they don’t have money.

“We are forced to follow up on students whenever they are sent home because they take long to return,” he added.

Mr Michael Mugo, the administrator at St Mary’s Hospital in Mumias, said they had a pile of farmers’ contracts after they failed to foot their medical bills.

“Initially, we used to retain contract agreements and identity cards for patients who failed to foot their medical bills. They piled up when the company failed to pay farmers and we have now stopped accepting them,” Mr Mugo said.

REVAMP
Mr Aseka promised that his regime was moving to correct the situation and return Mumias to profitability.

“We shall bounce back fully once we get funds and this will be the beginning of reviving Mumias. We are seeking funds from the government and other financiers to re-energise the process,” he said.

Recently, the government released Sh3.6 billion as bailout to the factory.

But it still needs much more to return to profitability.

POLICY
Stakeholders also think the government should take other deliberate policy decisions to help Mumias and other factories.

Top among them is to facilitate the factories to develop their own cane for crushing.

Kenya National Federation of Sugarcane Farmers vice-secretary Simon Wesechere has faulted the government for allowing millers to import duty free sugar and repackage it in their brands for sale.

He argues that allowing millers to flood cheap sugar in the country will hurt cane growers who depend on the produce for their livelihoods.

“The only beneficiaries out of the importation are powerful businessmen and brokers,” he said.

CANE POACHING
Farmers also want the ministry of Agriculture to verify if millers are investing in adequate cane development to sustain availability of raw material.

As it is, most companies have been relying on poaching cane as opposed to nurturing their own plantations, a situation that has caused continued shortage of raw material.

The Kenya Union of Sugar Plantation and Allied Workers Secretary-General, Mr Francis Wangara, says factories without adequate investment in nurturing cane should be compelled to suspend operations until they develop adequate sources.