Members of Parliament from sugar-growing areas of Muhoroni, Awendo, and Kanduyi have asked the government to speed up the process of writing off debts amounting to Sh128.07 billion owed by five state-owned sugar companies.
The MPs John Makali (Kanduyi), James K’Oyoo (Muhoroni), and Walter Owino of Awendo made the plea when they appeared before the National Assembly’s joint committees of Agriculture and Livestock as well as that of Finance and Planning.
The MPs were also accompanied by members of the County Assemblies from Kisumu and Migori regarding the revival and commercialization of state-owned sugar companies.
Under the leadership of John Mutunga and Kuria Kimani, the committees are set to delve into a multifaceted challenge that has plagued the sugar sector.
According to the Treasury action plan to revive and revitalise the sugar sector, Nzoia Sugar Company, Chemelil Sugar Company, Miwani Sugar Company, Muhoroni Sugar Company, and South Nyanza Sugar Company (SONY) owe substantial amounts of money to farmers, suppliers for goods and services rendered.
The companies also owe employees salary arrears, un-serviced loans and interest to financiers, taxes and tax penalties, and unpaid statutory deductions such as the National Health Insurance Fund and PAYE, leaving these companies with huge debt burden without corresponding assets.
Members of the Joint Committee acknowledged land ownership as a point of contention that needs to be resolved. Kibagendi Osoro emphasized the importance of resolving issues surrounding community land and divestiture of land.
Proposals to lease community-owned land for sugar cane farming gained traction. Justice Kemei and Gabriel Kag’ombe argued that this approach could help boost yields and reduce the burden on smallholder farmers.
Kisumu and Migori County MCAs also voiced their support for leasing land rather than selling factory land.
The MCAs oppose the merger of factories proposed by the National Treasury in their memorandum, citing concerns that it will create monopolies and stifle competition.
Instead, they proposed the development of a formula for leasing land from farmers with a guaranteed percentage for farmers.
On the other hand, MPs Makali, K’Oyoo, and Owino called for an end to sugar importation and the creation of protections against imports.
The leaders also stressed the need to pay arrears owed to cane farmers and employees of state-owned sugar companies.
They highlighted the dire situation in Nzoia Sugar Company, where farmers have not been paid for the last 10 months and workers for 11 months.
Nzoia has the largest nucleus estate, which is underutilized due to serious cases of mismanagement.
Members of the joint committee will meet with farmers’ representatives and the management of the five public-owned sugar mills, including Nzoia Sugar Company, Chemelil Sugar Company, Miwani Sugar Company, Muhoroni Sugar Company, and South Nyanza Sugar Company (SONY).
They also intend to meet representatives from the Competition Authority of Kenya and the Kenya Revenue Authority in the coming days.
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