Investors and tobacco farmers

Legislator on the Committee of Agriculture yesterday ordered police to arrest two investors, whom they accuse of fraud tobacco produce in the country.

More than 10,000 tobacco farmers are demanding Shs23.6 billion from Continental Tobacco (U) Ltd, a private company run by Kenyan investors.
Nevertheless, corporate executives, who appeared before the committee to explain why they have not paid the farmers blamed the default on “difficult” economic situation and promised to pay when the situation gets better.

“We are concerned that farmers have not received their money in the billions but they come into this tobacco company,” Mr. Kasiriivu Atwoki, chairman of the committee, said.

“When we visited farmers in Kibaale district, we found them with plaques of books, serving as the proceeds from these investors. Farmers received loans, but these people keep their money.”

The company general manager, Mr Morris Micheni and Mr Michael Mwangi, who is responsible for finance and administration have been transferred from the police criminal investigation to take statements from them.
But Mr. Micheni denied his guilt and promised to pay the farmers, when the company receives cash.
“Around the world economic repression in 2008 and tobacco is no exception. Many cigarette manufacturers in the western world have been under the economic repression,” Mr. Micheni said. “We continue to hold large amounts of unsold from 2009. We are asking farmers to be patient, we will pay them.”

The committee has demanded a list of all affected farmers from tobacco growing areas and how the investors intend to pay them.
Moment of truth

“These investors are claiming that they have not paid farmers for only the previous year yet there are farmers who have not been paid since 2009. We are asking them to come clean and give us all the details. We don’t want farmers to be cheated by these investors.”
But after the interaction with the investors, the committee gave them until the end of this month to seek Shs23.6 billion, or be arrested for nonpayment.

Earlier, in his responses Mr Micheni said: “Our hands are tied. Borrowing from banks is not an option right now due to high interest rates, we must be careful with the finances.”
Asked whether farmers will be paid interest on delayed payments, Mr Micheni said they will not get any interest because the company invests with farmers without immediate returns.

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