Lawmakers Urge New KCC to Halt Milk Supply to Indebted Government Agencies Amid Sh184 Million Debt Crisis

Lawmakers are urging the New Kenya Co-operative Creameries (KCC) to reconsider its continued supply of milk to government agencies that have failed to settle their outstanding debts. This push comes in light of revelations that the milk processor is currently owed a staggering Sh184.3 million by various government ministries.

During a session with the National Assembly Committee on Trade, Industry, and Cooperatives, Cooperatives Principal Secretary Patrick Kilemi disclosed that the Ministry of Defence and the Administration Police are the largest debtors, owing Sh49.5 million and Sh32.4 million, respectively.

Significant debts are also owed by other government entities, including State House, which has an outstanding bill of Sh14.62 million. Kenyatta National Hospital and the Presidency owe Sh10.53 million and Sh6.79 million, respectively, while Kenyatta National Hospital’s Private Wing and Moi Teaching and Referral Hospital owe Sh4.45 million and Sh4.04 million, respectively. Other notable debtors include the National Security Intelligence Service (Sh4 million), the Office of the First Lady (Sh3.07 million), and Nairobi Water and Sewerage Company (Sh2.27 million). Collectively, other government agencies owe an additional Sh52.24 million.

PS Kilemi highlighted that the financial strain caused by these unpaid debts is impacting New KCC’s ability to fulfill its obligations, particularly to the farmers who supply the dairy processor. He called on the committee to intervene, stressing the need for timely payments to ensure the sustainability of the company.

The committee convened following a request for a statement by Runyenjes MP Eric Muchangi concerning delayed payments to dairy and coffee farmers in Embu County. Committee Chairperson James Gakuya underscored the importance of New KCC operating as a business, stating that government entities with substantial debts should not be allowed to disrupt its operations, particularly when it comes to paying farmers.

Gakuya further noted that as a commercial entity, New KCC is not obligated to continue supplying milk to government bodies that have not settled their dues. He emphasized that the company cannot justify delayed payments to farmers by citing outstanding debts from government agencies.

In response, PS Kilemi assured the committee that the government is committed to settling all outstanding payments to farmers by the end of the month. He acknowledged past delays but noted that the situation has improved, with payments now up to date through June.

The lawmakers’ push for a reassessment of the company’s supply strategy reflects the broader concern over ensuring the financial viability of New KCC and protecting the livelihoods of dairy farmers across the country.