Mumias Sugar Company has injected Sh430 million into sugarcane development in a bid to address a biting shortage.
Chief executive Errol Johnston also said that the state owned company has written off Sh600 million the farmers owe miller.
Addressing farmers at the factory, Mr Johnston said the waiver is meant to encourage them to embrace cane farming. He said that cane production had reduced by between 30 and 40 per cent.
“So far, the company has been able to develop 6,000 hectares of land under the crop,” he said, adding that 7,000 farmers had been recruited in the scheme.
Mr Johnston said the government’s decision to do away with cane zoning had created a loophole for poaching which has left the company counting huge loses in recent years.
He accused rival millers of poaching premature cane — less than eight months old— financed and developed by the factory. Sugarcane matures at 18 months.
“This cane has no commercial value to a miller and the farmer is losing 60 per cent value through early harvesting,” he said. He went on: “The poaching menace has disrupted supply of raw materials to the factory leading to poor sales.”
The company has been forced to protect its catchment area to salvage the remaining crop, he said. Mr Johnston told the National Assembly’s Committee on Agriculture that the company did not receive Sh200 million meant to clear farmers’ arrears from the County government of Kakamega.
He was responding to the committee’s request for a detailed report showing how Sh3 billion bailout cash from the national government and Sh200 million from the county was spent.
“As far as I am concerned, the company did not receive the money in its bank account. I don’t know if the money was given,” he said.
The committee also demanded for an organisational chart and records detailing employees’ salaries. It also wanted the controversial KPMG report made public.
Agriculture and Food Authority (AFA) boss Alfred Busolo said Mumias Sugar had received over Sh2 billion from the authority to help it undertake cane development, factory rehabilitation, clear farmers’ arrears and upgrade infrastructure.
“Since September 2014, AFA has disbursed Sh1 billion for clearing the arrears, Sh414 million for cane development, Sh307million for infrastructure development and Sh300 million for factory rehabilitation,” said Mr Busolo.