The New Kenya Cooperative Creameries has been asked to immediately stop the supply of milk to government agencies that have not settled their debts.
National Assembly's Committee on Trade, Industry and Cooperatives noted the huge debts owed to the agencies have contributed negatively to the company's operations.
"New KCC is in business, and no one compels you to keep supplying milk to agencies that still owe you money," Committee Chairperson James Gakuya said.
Gakuya spoke during a meeting with Cooperatives Principal Secretary Patrick Kilemi.
He argued that the New KCC is a business hence it should not allow its operations to be hindered as this affects the company's ability to pay farmers.
"You cannot tell farmers that you can't pay them because government bodies owe you," Gakuya stated.
Kilemi who was accompanied by acting New KCC managing director Samuel Ichura revealed that milk processor is owed Sh184.3 million by various government ministries.
A further Sh52.24 million is owed by other government agencies.
"New KCC is failing to meet its obligations because of supporting agencies. We need the help of this committee for the outstanding debt to be paid," said PS Kilemi at the session that was also attended by New Kenya Planters Cooperative Union (New KPCU) Managing Director Timothy Mirugi.
The meeting was convened in response to a statement requested by Eric Muchangi (Runyenjes) regarding delayed payments to dairy and coffee farmers by various cooperatives.
PS Kilemi acknowledged past delays in payments to dairy and coffee farmers but assured the committee that the situation has improved, with payments now up to date until June.
He stated that the remaining payments would be made by the end of the month.
