Government Approves Sh654 Million to Support Sugar Sector Reforms

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The government has allocated Sh654 million to settle arrears owed to farmers and workers in the sugar industry. Agriculture Principal Secretary Paul Rono announced that this budget for the 2023-24 financial year will aid in implementing necessary reforms within the sector.
Of the total amount, Sh354 million will be directed towards paying arrears to farmers associated with Nzoia, Muhoroni, Chemelil, and Sony sugar mills. Additionally, Sh150 million will address three months’ salary arrears for workers at Nzoia Sugar, while the remaining Sh150 million will be distributed among other companies to cover one month’s salary for their workers.
Alfred Khang’ati, chairperson of the Nzoia Sugar Board, expressed gratitude to the President and local leaders for their advocacy in revitalizing the company. He confirmed that bank details for farmers and workers have been submitted to the Agriculture and Food Authority (AFA), with payments expected to be disbursed between Friday and Tuesday next week. Khang’ati emphasized that the Sh654 million would significantly reduce Nzoia Sugar’s debts to farmers, which previously covered 80% of the total owed.
Currently, Nzoia Sugar faces a backlog of 24 months’ salary payments for its workers, amounting to Sh1.8 billion. The factory, which is milling daily, allocates its proceeds to paying farmers and maintaining machinery. Khang’ati noted that they are only four weeks behind in compensating farmers for their sugarcane, and he assured that they are committed to improving payment timelines.
While the Agriculture and Food Authority will oversee payments to farmers, the specified sugar millers will manage worker compensation. Despite ongoing efforts to stabilize operations, Nzoia Sugar continues to contend with machinery breakdowns, leading to high maintenance costs.
In an effort to increase sugarcane production, Nzoia Sugar has partnered with the Agricultural Development Corporation (ADC) and the National Youth Service (NYS). Khang’ati highlighted that previously unused nucleus land has now been cultivated, with sugarcane planted and nearing readiness for crushing.
Managing Director Ezron Kotut praised the farmers for their unwavering supply of cane despite previous challenges. “I am pleased that we are now receiving a sufficient supply of sugarcane, which has enhanced our crushing capacity,” he stated.