Kenya: Cane Farmers Back Sacking of Troubled Millers' Boards

11 August 2020

Cane farmers have endorsed the decision by the government to disband the boards of public-owned sugar millers.

Kenya National Alliance of Sugarcane Farmers Organisations Chairman Saulo Busolo said good corporate governance has been lacking in government-owned factories.

"The government millers have been operating in dysfunctional mode... which made it impossible for creative solutions to be deployed to solve the challenging issues across the sugar belt," Mr Busolo said.

Last week, Agriculture Cabinet Secretary Peter Munya presided over the opening of Expression of Interest (EOI) bids for the leasing out of the five State-owned millers, whose operations have been crippled by debts and mismanagement.

Those targeted for the long-term lease model are Chemelil, Miwani (in receivership), Muhoroni (in receivership), Nzoia and South Nyanza (Sony).

Revoked appointments

Mr Munya further invoked the State Corporations Act and revoked the appointment of the members of the boards of Nzoia, Chemelil and Sony Sugar.

Mr Busolo said the boards had failed to improve the financial health of the factories. "These companies are technically insolvent," he said.

In 2008, the area under cane in nucleus estate was 1,995 hectares and 3,488 hectares for Chemelil and Nzoia respectively.

This declined to 1,591 hectares and 3,158ha by 2017 for Chemelil and Nzoia Sugar respectively.

For Sony Sugar, area under cane by outgrowers declined to 10,840ha in 2017 from 17,041ha in 2008.

"This decline is steep, an indication of a serious problem," Mr Busolo said.

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