Deputy President William Ruto Tuesday evening gave sugar cane farmers the green light to market their produce to processors offering to pay on time in what could further dent debt-ridden State millers’ fortunes but please the growers.
Dr Ruto told a meeting of the Intergovernmental Budget and Economic Council (IBEC) in Nairobi that cane growers will be allowed to supply produce to millers who offer the best package, even as industry players discuss a solution to the sugar firms’ woes.
“Until there is some clarity on what would happen to these ailing sugar cane millers, farmers should deliver their produce to those entities that can honour their obligations,” said Dr Ruto while referring to millers like Nzoia, Chemelil, Sony, Mumias and others suffering from shortage of raw material.
This will come as good news to many farmers who have complained of delayed pay for deliveries to some millers.
The meeting was attended by governors mostly from cane growing regions.
At the same time, the Treasury will now pay cane directly to farmers instead of using agents in a bid to stem diversion of cash meant for growers by sugar millers.
Treasury Cabinet Secretary Henry Rotich, speaking at the IBEC meeting on Tuesday, announced there would be an initial payout of Sh1.9 billion to farmers after verification of beneficiaries.
“The pending issue would now be to come up with a long-term payment solution to farmers by sugar millers,” said Mr Rotich.
Some disgruntled cane farmers are proposing to have Mumias Sugar Company #ticker:MSC sold to a private investor to help revive its fortunes.
Some growers said a strategic investor would be better suited to run the miller as opposed to relying on government funds.