Giant society turns to land lease to grow revenues

Muka Mukuu Farmers’ Cooperative Society in Matungulu Sub-County will now focus on enhancing revenues through land lease to agricultural multi-nationals and quarrying companies.

The society’s chairman, Dominic Nthwao told members during the Annual General Meeting that land leasing was the only key generator of the society’s finances, whose assets base stood at a staggering Sh1.1 billion.

Nthwao in his report said the active lease of approximately 920.7 acres of agricultural land to Del Monte Kenya signed in 2011 was set expire in December 2032 after which members will be at discretion to consider a further engagement with the multi-national.

“The current lease with Del Monte was agreed upon in 2011 at Sh10,700 per acre for a period of 21 years. Regrettably, the contract was devoid of an escalation clause thus denying members benefits of automatic price increase to cushion them from financial risks,” he said.

Noting that the society’s members had the discretion to decide the fate of the huge chunk of land upon the expiry of the current lease, Nthwao said the management would not hesitate to sign up a fresh deal with Del Monte provided members approve of the terms.

“The lease with Del Monte is our main source of income which runs all the society operations including paying dividends. Our members have demanded that any new lease for the farmland must contain an escalation clause,” he said.

The chairman also announced major progress on new quarrying venture where the society has opened new streams of income. “We have leased 25 acres of society quarry land to a private company for a period of 10 years affective from July 2023 which will be earning the society sh 4 million per year,” said Nthwao.

In May this year, the society leased another 26 acres of land to another private developer for a period of 10 years which will bring an additional Sh476,000 per year.