Coffee fund ideal if paid direct to farmers – MP
Kigumo MP Ruth Mwaniki has asked the government to channel the Sh3 billion funds allocated by the government for the coffee sector directly to farmers. Mwaniki said the funds risk being embezzled if other channels are created between the government and the farmers.
The coffee sector, she said, is infiltrated by cartels that may hinder any major effects of the funds and leave farmers in the same desperate situation they are in currently. She said the Coffee Board of Kenya has all data of the farmers that can be used to disburse the money.
The board, she noted, has a record of all coffee farmers in the country and how many coffee trees each possesses.
“We want this money to go directly to the farmers because if other channels are used very little will get to them” she added.
The revolving fund that is set to operational from July this year will help to give farmers cheap loans that will be repaid at an interest rate of only three percent.
The Cherry advance revolving funds is one of the many efforts the government is putting in place to revitalize the ailing coffee sector, including annual audits of the coffee co-operative societies through the department of co-operatives.
President Uhuru Kenyatta during a coffee farmers and experts forum said the fund will go a long way in helping farmers to increase their production while improving their livelihoods.
Mwaniki said the Sh3.2 billion released by the government back in 2012 to waive debts owed by farmers may have ended up in individuals’ pockets as no major effect was felt in the sector.
The money, she added, cannot be fully accounted for because proper channels were not used to ensure it got to the right beneficiaries.
Mwaniki who was once Kenya Coffee Planters Union (KCPU) Chief Executive Officer said the sector is full of cartels eager to rip off farmers.
“The cartels have been frustrating the government’s effort to revive the sector so that they cn continue taking advantage of the small scale farmer,” she said.
She also blamed the chaos in the sector to poor management of coffee cooperative societies that have been accused misusing farmers’ money.
Many of the societies have been rocked by conflicts over leadership, with farmers sometimes resorting to fistfights.
Mwaniki noted that Sh3 billion is however is still not enough to revitalize the sector and asked the President to consider allocating more money in the next financial year.
She pointed out that tea and coffee sector form the life line of thousands of rural families and need to be well controlled, as instability hurts their livelihood.
The coffee sector reached its peak in the 80’s with farmers producing an averae of 150,000 metric tonnes of coffee annually as compared to the current 50,000 metric tonnes.
A taskforce formed in 2016 by the President to work on the reformation of the sector is also considering waiving debts amounting to Sh. 700 million owed by farmers to co-operatives.
The Coffee Sector Implementation Committee chairman Joseph Kieyah has however said coffee co-operative societies will first be audited to establish existing debts.
Kieyah wondered if waivers disbursed in the past were actually credited to farmers and why farmers are yet to receive tittle deeds used to secure the loans. The committee is also working on new regulations that will bar companies from holding more than one licence. Previously, firms could open several companies and procure licenses for them which were then used to control prices at the coffee auction.
The new laws will also stop issuing licenses to marketing agents who negotiate prices with dealers in the auction as their role is taken over by millers and the Nairobi Coffee Exchange. Proceeds of coffee sold at the auction will then be channeled directly to individual growers through a Direst Settlement System managed by a commercial bank.