Treasury delay casts doubt on directive to pay dairy farmers

The Treasury is yet to appoint a team to update debt records of the collapsed KCC, raising doubt over President Uhuru Kenyatta’s directive to clear farmers’ dues by next month.

Official documents submitted to Parliament show that Sh500 million that was set aside to pay milk farmers for their old deliveries in the current budget is yet to be released to the New KCC.

“We have requested Treasury to appoint a team to do validation of milk farmers’ debts before the funds are transferred to New KCC for payments,” Adan Mohamed, Industry, Trade and Co-operatives secretary, told the National Assembly Committee on Agriculture while defending the State department for Co-operatives budgetary allocations for 2017/18.

The Treasury has not allocated any money to clear the debt owed to milk farmers in the 2017/18 financial year. President Kenyatta at the weekend directed New KCC management to release the Sh500 million to farmers by January while on a tour of the North Rift region.

The payment will be backdated to more than a decade and Mr Kenyatta assured farmers the government was committed to settling a promise made to them last year that Sh500 million would be paid.

READ: Uhuru tells New KCC to pay Sh500m farmers’ debt

The President pledged last year the government would waive the debt to support farmers in milk production.

“We put money into New KCC this year to ensure the dues owed to farmers are settled.

“The government has already allocated the money so that farmers can continue with their investment. The list is there and, by January, we will ensure the beneficiaries get their dues,” Mr Kenyatta told the North Rift farmers.

He also assured them that the firm’s ownership would not change hands as alleged by a section of farmers.

Last month, the Privatisation Commission allayed fears that there were plans to sell New KCC to a private entity.

KCC managing director Nixon Sigey said at least 130,000 dairy farmers — including transporters and co-operative movements that delivered milk to the firm in 1999 — would benefit from the funds.

In the next three weeks, “we will submit the list to the county co-operatives department for verification. We hope to conclude this exercise by January, as directed by the President. Payments will then be made,” he said.