Milk crisis looms at State House as unpaid Sh14m debt to KCC sparks concern

President William Ruto and his State House staff may soon run out of milk, according to reports that the Head of State's official house has a milk supply debt of Sh 14 million.

Lawmakers in Parliament were on Thursday shocked that the State House has not been paying for the milk supply it receives from the Kenya Cooperatives Creameries.

They now henceforth want to halt supplying milk to all government agencies that have failed to settle their debts.

The non-payment of milk supply by state agencies was unearthed when the new KCC Managing Director Samuel Ichura and Cooperatives Principal Secretary Patrick Kilemi appeared before the National Assembly Committee on Trade, Industry and Cooperatives Committee that was seeking answers on delayed payments to dairy and coffee farmers.

Committee Chairperson and Embakasi North MP James Gakuya said the milk processor is owed Sh 184.3 million by various government agencies.

State House is one of several government organisations that have failed to pay for milk supplies, owing the corporation Sh 14.62 million. At the same time, the Office of the First Lady has failed to pay the enterprise Sh 3.07 million for supplying milk.

The Ministry of Defence and the Administration Police Service have accrued the largest debts with Sh 49.49 million and Sh 32.38 million, respectively.

Kenyatta National Hospital (KNH) owes Sh 10.53 million while the facility's private wing owes Sh 4.45 million.

Furthermore, the National Security Intelligence Service has a debt of Sh 4 million, while Nairobi Water and Sewerage Company owes Sh 2.27 million.

"New KCC is in business, and no one compels you to keep supplying milk to government agencies that still owe you money. You cannot tell farmers that you can't pay them because government bodies owe you," said MP Gakuya.

In his reply, the PS noted that the milk processor is struggling in its operations due to huge amounts of debt.

"New KCC is failing to meet its obligations because of supporting government agencies. We need the help of this committee for the outstanding debt to be paid, "Kilemi posed.

He, however, assured the committee that the situation had improved and reaffirmed that the remaining payments would be made by the end of the month.

The state-owned milk processor has in the past been facing a financial crisis for almost two decades after its rebirth in 2003.

The company has been facing strong competition from other local processors including Brookside Limited which has risen to control the market according to the statistics from the Kenya Dairy Board.

Brookside is the market leader in the uptake of raw milk with a 40 per cent stake while KCC is second with 20 per cent.