Operations at the Transmara Sugar Company may be grounded after cane farmers resolved to withhold supply of raw materials to the miller over a five percent cut in cane prices.
This is after chief executive Frederick North-Coombes announced that farmers would be paid Sh3,910 per tonne for deliveries made between February and March, down from Sh4,110.
“The company cannot operate at a loss. It also doesn’t control market prices,” he said.
Farmers on Tuesday held a meeting with Trans Mara managers and security chiefs but did not agree.
They accused the company of reducing their pay while farm inputs, transport and gate cutting charges remain high.
“Why is it that farmers have to be the losers all the time? We will only allow cane prices to be reduced if the company lowers farm input, transport and cane cutting expenses,” said Davis Dikirr, a farmer.
Kenya National Federation of Sugarcane Farmers national treasurer Stephen Narupa said they had been disregarded and underrated.
“We are all in business and it is wrong when one partner only wants to benefit while oppressing the other. We also need proper consultations before such changes are effected. We don’t want dictatorial leadership in a company we have built over time,” he said.
About 14,000 farmers supply cane to Trans Mara Sugar Company, which has a crushing capacity of 4,500 tonnes per day.
“We’ll not supply cane to the company if its management does not listen to us. We will resume dialogue on March 14, a date given by area MP Gideon Konchella.”
Mr North-Coombes, however, said the miller was contemplating increasing transport charges, which have years remained constant for the past three.
He said sugar cartels, which had flooded the market with contraband and cheap imports, should instead be dealt with as they are killing the sugar industry. “We need to restore law and order in the industry. If imports are not controlled then local cane prices will even be lower,” said the CEO.