Treasury has released the cash to the agriculture ministry.
The money covers deliveries made by farmers to the cash-strapped millers from 2014.
The government for a long time has been pumping billions into the sugarcane industry but the problem of delayed payment to farmers has persisted.
Sugarcane farmers are set to receive Sh2.7 billion owed by State-owned millers this week after the national treasury released the cash to the agriculture ministry.
The money covers deliveries made by farmers to the cash-strapped millers from 2014. Farmers attached to Mumias Sugar Company are owed Sh889m while their counterparts at Sony Sugar are yet to be paid Sh512m.
Muhoroni-Miwani owe farmers some Sh474m delivered from March 2017, Chemelil Sugar has accumulated Sh201m from January, while Nzoia is yet to clear Sh524m.
Mr Kiunjuri said the Government together with other players were set to privatise the underperforming cane millers "that are struggling in a competitive market".
“For 20 years we have been facing challenges on how to pay our farmers; this is set to change as our farmers will be smiling all the way to the bank,” Mr Kiunjuri said after a meeting with ODM party leader Raila Odinga.
Mr Odinga said the government for a long time has been pumping billions into the sugarcane industry but the problem of delayed payment to farmers has persisted.
Deathbed
He said private investors will come on board and inject more money and new machines, especially to the public sugar milling companies such as Chemelil, Miwani, Muhoroni, Nzoia and Sony Sugar that are on their deathbeds.
The final details of the privatisation, Mr Odinga said, will be discussed on Monday next week in Kisumu during a major cane stakeholders meeting.
“There is need for permanent solution and the Monday meeting will address all the issues,” Mr Odinga said.
He said the injection of private capital in the firms will go a long way in rehabilitating and modernising the millers for competitive and sustainable production.
The former Prime Minister was accompanied by former Funyula MP Paul Otuoma who was recently appointed chairperson of the Privatisation Commission and officials from the Ministry of Agriculture.
Mr Odinga regretted that the sugar industry has been brought down to its knees due to corruption and mismanagement.
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