Nzoia Sugar Company has released Sh211 million arrears that it owes sugarcane farmers for January and February, coming just days after growers protested delayed payments.
The payment is for 5,812 farmers who delivered their cane during the period. Between July last year and February this year, 23,627 farmers were been paid as the miller moved to reduce its debt burden.
The acting managing director, Michael Kulundu, said that payment of farmers was in line with the company’s commitment to the sector regulator’s directive to pay farmers within a month of cane delivery.
A fortnight ago, farmers from the region protested over delayed payment noting that the company was giving priority on payments to growers who have no contracts with the firm.
However, Nzoia said that farmers whose payments were delayed had been reluctant to open bank accounts for fear that their money would be deducted.
“Despite the challenges we face, our priority is farmers payment because we understand the central position our farmers occupy in our operations supply of raw material,” said Mr Kulundu.
He also refuted claims that Nzoia Sugar was on the brink of collapse as a result of lack of cane.
“We are having cane shortage as a result of poaching and drought, but this is a challenge that is facing all the millers. The situation has been worsened by rampant poaching by private millers who do not have adequate cane to support their operation,” he added.
He emphasised that shortage of cane (the raw material) was normal and faced by all millers in the country. The situation is expected to return to normal with the onset of rains.