The Cabinet Secretary for Cooperatives and Micro, Small and Medium Enterprises (MSMEs) Simon Chelugui has affirmed the government’s commitment to improving the lives of coffee farmers through various reforms in the sector.
Speaking during a sensitization and registration forum on the Coffee Cherry Advance Revolving Fund (CCARF) in Kisii town, CS Chelugui said that coffee farming is a profitable venture and the reforms will address the bottlenecks that have barred farmers from getting profits for their produce.
He noted the country’s coffee production had dropped from 128,000 metric tonnes to 51,000 metric tonnes due to the low prices, poor management, and theft of the produce from factories.
As a result, the Cabinet Secretary said the government had capped the minimum price at Sh. 80 per kilogram where a farmer will be paid Sh. 40 once the coffee reaches the factory and another Sh. 40 after the milling.
Chelugui added they had tabled the Cooperatives Bill 2023 and Coffee Bill 2023 in Parliament and the two bills would streamline the management of the coffee sector and weed out cooperative officers who have been defrauding farmers for years.
He pointed out that the government is limiting the borrowing of funds within the cooperatives to avoid misuse of funds for personal gain and overburdening the coffee farmers with debts.
In addition, the CS noted they have issued licenses to 14 Unions that will represent farmers at the Nairobi Coffee Exchange and ensure they are fully represented and aware of the ongoing activities in the global market.
To address the cases of coffee theft, Chelugui urged the security agencies to provide adequate security to the coffee factories during the harvesting season as well as transportation of the produce to the market.
He also highlighted an ongoing program to replace old machines with new ones in coffee factories to improve the quality of the product.
Further, the CS urged the cooperatives to report the accumulated debt issued to the farmers so that they could request the government to settle the bills and relieve the financial burden from the farmers.
In a statement read on his behalf by the County Executive for Trade Cyrus Nyabicha, Kisii Governor Simba Arati noted the county was prioritizing several programs to revamp the coffee sector including the expansion of the acreage under coffee, provision of coffee seedlings to the farmers and continuous training of the farmers.
Arati said the county government had distributed over 39,000 coffee seedlings to the societies and availed a demonstration plot to train and sensitize the farmers for quality coffee production.
Kisii County has 59 coffee factories and 22 cooperative societies and during the financial year 2022/2023, the Coffee Societies produced over 4 million kilograms of coffee which led to the farmers receiving Sh.218 million from their produce.
Arati lauded the national government for spearheading the Coffee Cherry Advance Revolving Fund saying it was a timely initiative that will go a long way in resolving the challenges facing the coffee farmers.
He requested the government to waive the debt of Sh. 555 million that the cooperatives owed the various financial institutions.
The CS was accompanied by the Principal Secretary for the State Department of Cooperatives, Patrick Kilemi in the forum which was attended by coffee farmers from Kisii, Nyamira, Migori, Homabay, and Narok Counties.
The Coffee Cherry Advance Revolving Fund (CCARF) was established to provide an affordable, sustainable, and accessible cherry advance to small-scale coffee farmers with land under coffee not exceeding 20 acres.
The fund is managed and administered by the New Kenya Planters Co-operative Union Limited (KPCU) as per the Public Finance Management Act (Coffee Cherry Advance Revolving Fund) Regulations 2020.
The members of Co-Operative Societies get to access Sh. 20 per kilogram of cherry delivered to the society.
The registered small-scale estate farmers affiliated with New KPCU get to access 40 percent of the prevailing average sales price of clean coffee at the coffee exchange.
CCARF fund does not accrue any interest and farmers are only charged a one-off 3 percent administrative fee.
By Mercy Osongo
