President Uhuru Kenyatta recently directed Agriculture CS Mwangi Kianjuri and his Treasury counterpart Rotich to set aside KES. 2.6 billion, to compensate Sugar cane farmers.
The move comes after major sugar producers owned by the government failed to along the sugar belt failed to meet their debt obligations that date back to 2014, they include; Mumias Sugar Company (Sh889 Million), Chemelil Sugar Company (Sh200 million), Nzoia Sugar Company(Sh520 million), Sony Sugar (Sh512 Million) and Muhoroni Sugar (Sh470 Million).
The CS set a committee to vet genuine farmers who were eligible for payments; paramount to note that the government had earlier spent over Sh4 billion to revive these sugar factories that were literally in 'ICU'. However, a large portion of this money ended up in the pockets of politicians or brokers parading themselves as farmers.
The sugar industries which operate under parastatal models cannot be competitive in an environment encroached by private companies that take advantage of the loopholes.
The Government should use a private company approach while compensating sugar cane farmers; they can convert the Sh2.6 billion debt to equity or shares.
The farmers can receive a monthly payment of Sh3500 as a shareholder; instead of receiving Sh30,000 lump sum which can barely last a month.
Sh2.6 billion plus over Sh3 billion from the factory plant sale proceeds can be used to start over 30 Cottage industries; which can create over 10,000 jobs in the sugar belt and earn the government the much-needed taxes.
The remedy to the sugar belt region is to give way to a younger and better mindset.
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