Investors Held Over Tobacco Farmers' Shs20b

Source from:  Monitor 01/11/2012

Lawmakers on the Agriculture Committee yesterday ordered police to detain two investors whom they accused of cheating tobacco farmers 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. However, the company directors, who appeared before the committee to explain why they had not paid farmers, blamed the default on the "difficult" economic situation and promised to pay when the situation gets better. "We are concerned that farmers have not received their money in billions yet they supplied tobacco to this company," Mr Kasiriivu Atwoki, the committee chairperson, said. "When we visited farmers in Kibaale District, we found them with chits from exercise books acting as receipts from these investors. Farmers took loans but these people are holding their money." The company general manager, Mr Morris Micheni and Mr Michael Mwangi, who is in charge of finance and administration were handed over to a police officer from the Criminal Investigation Directorate to take statements from them. But Mr Micheni denied any wrongdoing and promised to pay farmers when the company gets funds. "Globally there has been an economic repression since the year 2008 and tobacco is no exception. A lot of cigarette manufacturers in the western world have gone under due to the economic repression," Mr Micheni said. "We continue to hold big unsold volumes since 2009. We are asking farmers to be patient we are going to pay them." The MPs told the committee that farmers are given receipts with kilogrammes but without the amounts due to 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 up to the end of this month to look for Shs23.6 billion or be arrested over non-payment. Earlier, in his responses Mr Micheni said: "Our hands are tied. Borrowing from banks is not an option now because of the high interest rates, we need to be cautious with 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. Enditem