National Assembly Committees on Agriculture and Finance are puzzled how State-owned sugar factories in Nyanza accumulated Sh128 billion debts.

The committees are also concerned about farmers’ debts amounting to Sh1.7 billion for cane delivered and not paid in the last 10 years.

The statistics were presented to the MCAs, MPs from Nyanza sugar belt during a week-long Sugar National Conference in Kisumu. Finance Committee Chairman Kuria Kimani and his Agriculture counterpart John Mutunga, co-chaired the meetings. Kimani disclosed that out the total debt owed, Sony Sugar Company has Sh7.2 billion, Muhoroni, (Sh26 billion), Miwani (Sh22 billion) and Chemelil (Sh9.9 billion).

Then there is government taxes owed to Kenya Revenue Authority (KRA) and other statutory bodies amounting to Sh50 billion, creditors Sh5 billion and salary arrears Sh1.7 billion.

Development loans amounted to Sh65 billion. Apart from the Nyanza mills, Nzoia Sugar Company is located in Bungoma County, is also indebted to the tune of Sh62 billion.“It means by deductive logic that the factories have been operating on a loss for over a decade, as the State gleefully watches,’’ the Parliamentary committees noted.

Kimani said an operating loss does not consider the effects of interest income, extraordinary gains or losses from equity investments or taxes.

“We have a 14-day mandate to come up with viable recommendations to Parliament on how to revitalise or commercialise the firms,’’ he explained.

Kimani and Mutunga wondered what will happen to the managers accused of allegedly mismanaging the factories as the State mulls over writing off the debts.

“This is why, we are here. We want to know what can be done to salvage the sub-sector and what can be done to forestall such losses in future,’’ said Kimani.

This is because, they claimed the State won’t bail out the firms, and fail to put in place adequate precautionary measures of policies to avert a possible repeat.

\Mutunga said it is the only proper legislative framework that would curtail such mismanagement and that is what Parliament is up to. He spoke as sugarcane farmers in Nyando sugar belt said “No” to privatisation of the State-owned sugar factories, instead wanting them leased for only 20 years.
The farmers told the government to be serious with the management of the sugar industry and to stop taking farmers in circles each election year. Led by Muhoroni MP Onyango Koyoo, the farmers wanted the State to make good their promise to write off the huge debts choking the sugar factories.

“We want to thank President William Ruto for planning to revive the State-owned millers, but they must write off the debts this time round,’’ he said.

The farmers claimed that it was disturbing that the State spend a lot of time setting up the Taskforce on the Sugar Industry but doesn’t implement the findings.

They cited the recent National Sugar Taskforce Report, which was presented to the government, but whose proposals have not been put into use.

“There is no need of holding these series of meetings and not putting them into use. It defies logic and sense,’’ said Koyoo on the sidelines of the Sugar Conference.

Koyoo also dismissed proposals to merge Muhoroni and Miwani sugar factories, saying the millers should be treated as separate entities. He was backed by farmers led by Charles Atyang, Noah Opiyo and Eng Chris Ondis, who said Miwani, Muhoroni and Chemelil sugar factories are distinct.

“The existence of these firms would enhance competition and create a more liberalized market as opposed to monopolisation,’’ said Atyang.