The government has entered into an agreement with sugarcane farmers and sugar factory workers’ unions to pay cane delivery and salary arrears owed to both groups.
The agreement is aimed at securing the future of cane farmers and sugar factory workers as the government leases out four sugar factories, namely Nzoia, Chemilil, Sony, and Muhoroni, to private millers.
In a statement sent to media houses, the Cabinet Secretary for Agriculture and Livestock, Mutahi Kagwe said that under the agreement, the government will settle arrears owed to both farmers and workers before the handover of the four factories.
The CS said that according to the agreement, the government will pay farmers Sh500 million in July this year for cane deliveries to clear arrears owed.
“Last year, the government paid out over Sh1.7 billion to sugarcane farmers to clear arrears owed by sugar factories. Since then, the factories have accrued Sh500 million for cane delivered by farmers,” he said.
The CS further said the government paid over Sh600 million to factory workers last year out of the Sh5.3 billion owed to workers leaving Sh4.7 billion in arrears. Since then, the arrears owed to factory workers have accrued to an estimated Sh5.6 billion.
Kagwe said the government, following lengthy negotiations, has entered into an agreement with the Kenya Union of Sugar Plantation and Allied Workers (KUSPAW) to safeguard the interests of sugar factory workers.
The CS said KUSPAW has signed a Memorandum of Understanding (MOU) under which the government (as the lessor) undertakes that a phased payment schedule shall be adopted where Sh1 billion is to be paid to workers upon takeover (Sh600 million to pay part of the staff arrears and the remaining Sh400 million to pay salary as from the month of May 2025).
He said under the schedule, Sh1.5 billion will also be released in July this year to be used for the payment of staff salaries and arrears.
“The Ministry shall remain responsible for all unpaid salary arrears, pension contributions, and statutory deductions up to the lease handover date,” he further added.
Other terms include there being a twelve-month transition period during which the four Lessees shall evaluate the workforce need and determine the criteria for the retention of current employees.
By Anita Omwenga
