Coffee farmers risk losing cash over licence row
More than 700,000 farmers may lose out in a battle between their union and the Government over a coffee auction permit.
In 2016, former Agriculture Cabinet secretary Willy Bett published a notice in the Kenya Gazette that enacted the Coffee (general) Regulations Act, 2016, which opened the coffee trade market to traders without provision of a licence.
The regulations, which are now pitting the Kenya Planters Cooperative Union (KPCU) and the State, lifted a 2012 requirement that for a firm or union to get a trading licence at the Nairobi Coffee Exchange (NCE), it had to provide a Sh1 billion guarantee.
In a battle that has drawn in NCE, Attorney General Kihara Kariuki and the Agriculture and Food Authority (AFA), KPCU claimed the Government had held on to the 2012 regulations, which have locked out many Kenyans from the coffee trade.
It argued that High Court Judge George Odunga last year declared that the contested regulations were effective but the State had continued to lock out traders based on the old regulations on the pretext that it was still consulting on the import of the judgement.
At the centre of the dispute are 23 tonnes of coffee provided by KPCU members, which the union has said will go to waste.
The AG, on the other hand, has argued that KPCU cannot participate in the auction as it does not have a marketing agent licence.
“Pursuant to the Coffee Regulations 2012, for the applicant to be issued with a marketing permit, it must submit a bank guarantee worth Sh1 billion,” the AG argued.
The AG added that there was no way of securing farmers in the event their union did not remit their money.
“Allowing the applicant to participate in the Nairobi Coffee Exchange without a bank guarantee exposes farmers to top losses as there is neither a guarantee nor any existing mechanisms to secure them from non-payment of their dues by the applicant,” he added.
The union claimed the AG was aware that the 2016 regulations were in place but failed to advise that traders did not require licences. The case will be heard on December 6.