Coffee farmers in Kenya will from July this year, be able to access advance payments for their cherries, following the launch of a Sh3 billion cherry advance revolving fund, aimed at resolving the problem of delays in coffee payment cycles.
In a raft of measures aimed at boosting the coffee sub-sector, President Uhuru Kenyatta, said that farmers would also be able to access this fund at a modest interest rate of three per cent per annum.
“Coffee farmers across the country will be able to access the cherry advance revolving fund at a modest interest rate of three per cent,” he said, adding that removing all the barriers that hinder coffee farmers’ from reaping maximum profits from the crop in Kenya, is key in revamping its production, which is in decline.
The President also announced an ambitious rehabilitation of 500 pulping factories in 31 coffee growing counties, the rehabilitation of planting materials and more investments in research and extension services.
Speaking during the opening of the on-going 124th Session of the International Coffee Council in Nairobi, he said the reforms he announced were designed to boost production, reduce the cost of processing and milling and transaction costs at the auction market.
On marketing and branding, the head of State said that his government had embarked on an aggressive marketing strategy of Kenyan coffee brands to increase the county’s market share. “We are aggressively marketing our brands globally to increase Kenya’s market share in Europe, US and in the emerging Asian markets,” he added as he expressed optimism that the status of coffee in Kenya is strong and its future outlook remains positive.
Lack of proper regulations, he said, had given room for middlemen to benefit from coffee at the expense of farmers. Under a new regulatory framework, Uhuru added, the coffee sector will be liberalised to usher in a new era of direct marketing by co-operative societies.
Cooperatives to be audited
He also announced the requirement for all coffee co-operatives to present audited annual reports to the agriculture cabinet secretary within six months of every calendar year.
“The inaugural audits under the forthcoming enhanced regulatory framework will cover the calendar year 2019, and shall be submitted by all co-operatives on or before 31 December, 2019,” added Kenyatta.
He added that the new institutional, legal and support services interventions are intended to reverse the negative trends facing the coffee sub-sector and safeguard the future of coffee farming in the country.
The President regretted that Kenya produces some of the best coffee in the world, but that the premium prices the coffee fetches in the global market does not trickle down to the farmer.
“Paradoxically, these prices do not trickle down to the farmers, who by and large, are small-scale producers. This phenomenon, though not unique to Kenya, represents the single greatest challenge to the continued prominence of the coffee industry,” he said.
International Coffee Organisation Executive Director, Jose Sette, welcomed the ongoing efforts by the government to revamp the coffee sub-sector.
Mr Sette noted the need to find lasting solutions on the global coffee price volatility that, “if not checked, will lead to food insecurity and increased urban migration in coffee growing regions across the globe”.
“All eyes are now zoomed to the issue of price volatility in the coffee sector. We must find a lasting solution because if the crisis continues we are staring at stark consequences,” he said.
Others who addressed the forum included the executive director of the, Agriculture CS Mwangi Kiunjuri and Nairobi Governor Mike Sonko.