Agriculture, Livestock and Fisheries Cabinet Secretary Felix Kosgei says the Sh1.1 billion was given to Nzoia Sugar, Sony, Muhoroni, Chemelil, Mumias and Soin Sugar Company. As of Tuesday, Nzoia had cleared all its arrears.
The government also directed all sugar factories to open farmers’ special accounts where their money is to be channeled through henceforth.
“As this money is released first of all, all the factories have been directed to open farmers’ special accounts, where this money is channeled through,” Kosgei said
“So as we speak today I am sure all the farmers have been paid and the money goes direct from that farmers’ special account to the farmer. It is not money that can be used for any other thing in the factory.” He said
He added factories have been directed to pay farmers first before any other commitments through the farmers advanced scheme where for every sugarcane delivery, a farmer is to be paid a percentage of the overall fee.
“Whenever they sell the sugar they set aside the percentage equivalent to the cost of cane, Chemelil deposit that money into the farmers account at the rate of 50pc,” he said.
“Sony they are setting aside 37pc of sales every other time whether it is two bags whether it is a thousand bags whatever they receive day by day the money has to be channeled, this money will specifically be for farmers payment,” he said.
The bailout was to help sugar factories get back on their feet and resume normal operations. Arrears for July and August 2014 are to be settled by the sugar factories.