The government has detailed how the Sh654 million disbursed to sugarcane farmers in the Western region will be shared.
The allocation, which is the first tranche meant for seed cane development, was approved by the Treasury early last month.
It is part of the Sh2 billion pledge by President William Ruto towards sugarcane development in the region through the state-owned mills.
The money which has already been channelled to the Agriculture Food Authority (AFA) will also be used to offset the sugar company employees’ arrears.
“We received exchequer for the appropriated budget of Sh654 million in the financial year 2023-24 supplementary II for support to sugar reforms,” reads the letter signed by Agriculture Principal Secretary Paul Ronoh.
In the letter dated July 5, Ronoh said Sh354 million would be used as payment of farmers’ arrears while Sh150 million is for payment of Nzoia sugar company employee arrears.
Another Sh150 million is to be used to offset the arrears of employees in Chemelil, Sony, and Muhuroni.
Part of this Sh150 million will also to the Kenya Agricultural and Livestock Research Organisation for the multiplication of new varieties of sugarcane seedlings.
The release of the funds marks a significant milestone in the government's efforts to uphold its promises and support the agricultural community.
It follows the promise made by Ruto during his tour to the Western region where he announced plans to support the agricultural sector, particularly sugarcane farming which plays a vital role in the country's economy.
During the Mashujaa day celebrations held in Bungoma, Ruto stated that the government had already written off Sh110 billion worth of sugar factories’ debts which had accumulated for over 40 years.
The decision to write off the debts was agreed in a Cabinet meeting in October last year following the Parliament's approval.
In a memorandum submitted to Parliament on August 22, 2023, then Treasury Cabinet Secretary Njuguna Ndung'u told lawmakers the waiver is part of the action plan to revive Chemelil, Muhoroni, Miwani, Nzoia and Sony sugar companies.
The debt was in the form of bank loans, tax arrears and penalties, farmers' and employees' dues.
Additionally, Ruto pointed out that a new leasing model that will guarantee prompt payment for cane deliveries by farmers has since been introduced.
“This will ensure timely wages for factory workers and bonuses to sugar cane farmers every end of the year,” he stated.