Kenya: NZOIA Sugar Company Terminates Contract - kenyadetails
NZOIA Sugar Company

NZOIA Sugar Company is set to stop retention levy payments it has been making to Nzoia Outgrowers Company since 1991, the Star established yesterday.


This follows the lapse of an 18-month notice issued by company secretary Benson Khwatenge on November 22, 2010 which said: "Pursuant to clause 14 of the agreement notice is hereby given that the above agreement shall terminate upon lapse of 18 months thereof". It was titled: "Notice of termination of agreement between Nzoia Outgrowers Company Limited and Nzoia Sugar Company relating to the Nzoia Outgrowers Scheme dated October 11, 1991".

The sugar company has been deducting one per cent retention levy from sugar cane farmers since 1999 and paying the same to Noco under the Nzoia Outgrowers Scheme dated October 11, 1991. Before 1999, the miller was deducting 15 per cent from the growers which was scaled down after an uproar sparked off by claims that the cash was being misappropriated.


Noco was to retain the cash in the Retention Levy Fund for a 12-month spell and release the same to farmers "at current bank rates" under the terms of the agreement which it has failed to honour, farmers claim. Kenya Sugarcane Growers Union chair Nato Muleme said to date Noco has failed "to release Sh118 million to farmers as provided for in the agreement between Nzoia Sugar Company and Noco" . The union moved to court and obtained orders to stop Nzoia Sugar Company from deducting the, now controversial, one per cent retention levy from farmers prompting management at the sugar miller to issue the notice to halt payments to Noco.


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