Govt to Revoke Leases if Sugar Investors Fail to Modernize Mills and Pay Farmers Weekly
Kenya Sugarcane Board has announced weekly payments and annual bonuses for farmers supplying four leased sugar factories. CEO Jude Chesire warned leases will be revoked if investors fail to pay or modernize infrastructure. The 30-year leases include strict performance conditions. Government support includes Ksh2.5 billion for staff salaries and arrears, aiming to revitalize the sector and protect farmers’ interests.
Farmers who supply their sugarcane to the four leased-out sugar factories will be paid every week, the Kenya Sugarcane Board has said.
In a press briefing on Tuesday, May 13, the board’s CEO, Jude Chesire, said the leases will be revoked if the investors fail to pay farmers on time, as outlined in their agreement.
He said farmers delivering their produce to the four factories will also receive annual bonuses based on the quantity of sugarcane supplied.
The government recently finalised agreements to lease the Nzoia, Chemelil, Muhoroni, and Sony factories to investors for 30 years as part of efforts to revive the struggling sugar sector.
“When these companies were announced, one of the conditions that we set was that new laws had to be introduced to protect farmers, and that is why the Sugar Act, which has already been passed, was formed by the farmers and other stakeholders,” he stated.
“When these new investors pay the government for every kilogram of sugar they produce, we will ensure that the farmers are given a bonus depending on the sugarcane they are taking to these companies,” he added.
According to the CEO, the investors will be further needed to modernise and enhance the infrastructural capacity of the factories in the next 6 months, and again, if they fail to do so, the government will transfer the lease to another investor who will be capable of delivering.
“These are some of the many conditions we have set to ensure that these investors perform their duties diligently, as some farmers are concerned that the leases will simply be used as a weighbridge, but that is not true,” he said.
So far, Nzoia Sugar Company has been awarded to West Kenya Sugar Company, Chemilil to Kibos Sugar & Allied Industries, Sony Sugar to Busia Sugar Industry Ltd, and Muhoroni to West Valley Sugar Company.
In a statement, Agriculture CS Mutahi Kagwe assured that the government will cover the salaries of workers in these factories in the first year, during which the investors will evaluate their workforce needs and determine the criteria for the retention of current employees.
Additionally, the CS stated that the ministry will ensure all unpaid salary arrears, pension contributions, and statutory deductions are paid to the workers.
“Ksh1 billion will be paid to workers upon takeover (Ksh600 million to pay part of the staff arrears and the remaining Ksh400 million to pay salaries starting from May 2025),” he stated.
“Ksh1.5 billion will be released in July 2025 for the payment of staff salaries and arrears,” he added.
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Source : Kenyans.co.ke
