A group of cane farmers have moved to court to challenge the intended lease of Mumias Sugar Company Limited. Gikwamba Farmers’ Cooperative Society has blamed the millers for having failed to pick up on the agriculture ministry and Agriculture Food Authority (AFA).
The farmers have sued Kenya Commercial Bank, Attorney General Kihara Kariuki, Kakamega County Government, AFA, and Devki Steel Mills Limited.
According to their lawyer Kibe Mungai, Devki Steel Mills Limited dropped its bid yet the government still insists on selling Mumias to Devki.
As of 2018, the farmers say Mumias Sugar Company owed creditors Sh30.1 billion among them being Kenya Commercial Bank (KCB) which was owed Sh600 million.
Equally, the Company also owes the Treasury Sh3.1 billion, Sugar Board Sh1.6billion, Eco Bank Sh2 billion and Commercial Bank of Africa (CBA) Sh401 million.
On their court paper filed before the commercial court, the farmers argued that the court should stop the lease until the Sugar Bill 2019 is enacted into law blaming the Ministry of agriculture and AFA for the plight of the company leading to its current bankruptcy.
“Whilst the financial challenges facing Mumias Sugar Company are largely from poor policy guidelines, Ministry of agriculture and AFA are largely to blame for the plight as opposed to fundamental economic deficiency affecting the company,” they lamented.
This comes when the country is faced with the dilemma of having millers struggling to profit while producing sugar at a higher cost than other countries in the economic bloc of the Common Market for Eastern and Southern Africa (COMESA).