Mumias to waive Sh600m debts

The decision by Mumias Sugar Company to waive debts amounting to Sh600 million has rekindled hope of better times ahead for cane farmers.

Mumias board chairman Dan Ameyo made the announcement on Wednesday, starting a wave of excitement in the expansive sugar cane belt.

Mr Ameyo said the interest rate on debts will be reduced from 17 per cent to 11 per cent per year.

The debts have accumulated over several years from services the miller provides, including supply of seed, fertiliser and other farm inputs.

The charges on harvesting and transportation of cane have piled up the debts on farmers who end up with poor harvests and are unable to offset the cost of the services advanced to them by the company.

The deputy secretary of the Kenya National Federation of Sugarane Farmers, Simeon Wesechere, told the Nation on Wednesday that writing off of the debts would be a big relief to farmers.

“As a federation representing farmers, we have been pushing for the waiver and finally the good news is here. We are excited and hope the miller will now focus on improving agronomy services to improve cane production,” said Mr Wesechere.

Further, Mr Ameyo asked agricultural extension staff to discuss the issue of the debts and ensure farmers did not sink into debts which were disrupting the miller’s recovery efforts.

“Cases of debts incurred have affected our recovery path, but now Mumias Sugar is reversing the trend by giving a reprieve to our farmers with immediate effect,” said the chairman.

He assured farmers with outstanding debts that the company will write them off after a case by case scrutiny starting from July.

The miller plans to recover future debts incurred by farmers over a three-crop cycle, from plant, first ratoon and second ratoon crop to ease the burden on farmers.

“Mumias Sugar is working on a micro-financing plan to help farmers manage pre-harvest costs,” said Mr Ameyo.

He urged all farmers in the sugar zone to be confident in the miller and embrace cane farming since it was the western region’s economic lifeline.

Mr Ameyo said a third of the nucleus estate had been rehabilitated as part of the ongoing efforts to give Mumias Sugar a facelift. He asked employees to ensure they give their best and support the chief executive Errol Johnston to turn around the fortunes of the company.

The country’s leading sugar producer is grappling with a shortage of cane after rival millers poached its crop, disrupting normal crushing.

Mr Ameyo said measures have been take to stop the scramble for cane by rival private millers.