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Coffee, tea reforms drag on as farmers seek Sh3b fund cash

By Wainaina Ndung’u, Munene Kamau and Allan Mungai
A coffee worker at Gacatha Coffee Factory. Small scale coffee farmers have embraced the government agenda to revive the country’s coffee sector with a Sh3 billion cherry advance revolving fund to farmers with an interest of three percent per annum. Kibata Kihu/Standard

The government is yet to operationalise the Sh3 billion coffee Cherry Advance Revolving Fund that would be a welcome relief for cash-strapped farmers, seven months later.

The delay has forced farmers to wait longer for payment after delivery of beans to factories. This is despite assurances by Trade Cabinet Secretary Peter Munya that the government is working on the final details that will see farmers receive direct disbursements to their bank accounts.

Mr. Munya spoke at Gathuthini Primary School in Kirinyaga County on Friday. He said the program would cut off brokers along the coffee value chain and ensure farmers benefit from the cash crop.

“The aim of the cherry crop advance is to ensure the farmer is able to buy required inputs and pay for the labour without stress,” he said.

The CS also assured the growers that the prevailing marketing mismatch was being addressed wondering why farmers in some countries were being paid Sh400 per kilo of the clean commodity as opposed to the meagre Sh30 per kilo paid in Kenya.

“We are working out a strategy where our farmers will be feeling they own the sector by ensuring what goes to their pockets is commensurate with their hard work and hence improve their livelihood,” he said.

Mr. Munya said the task force on coffee was also working hard to ensure the wishes of the farmers were respected to restore sanity in the sector.

The coffee farmers' frustration was palpable recently when a planned meeting with members of the coffee task force aborted after farmers turned rowdy.

They said they had no confidence in the team. Recently, the task force implementation committee Chairman Joseph Keiyah blamed delay in operationalisation of the fund on government red tape.

Prof Kieyah made the remarks in Meru after legislators from the region presented a memorandum to President Uhuru Kenyatta at Sagana State Lodge on the fund. During the State of the Nation address in April, the President announced that the fund will be set up to save the ailing coffee sector. The move was meant to end the mismanagement of cooperatives, delayed payments, weak regulatory framework and lack of transparency.

In their memorandum, the Tea and Coffee (TeCo) Initiative, comprising leaders and technical experts from tea and coffee growing areas petitioned the state to operationalise the fund in two months.

Members of TeCo Initiative include Chairperson Njeru Ndwiga (Embu Senator), Coordinator Kabando wa Kabando (former Mukurwe-ini MP), Secretary Priscilla Nyokabi (former Nyeri Woman Representative), Gabriel Kago (Githunguri MP), Jude Njomo (Kiambu Town MP) and Waihenya Ndirangu (Roysambu MP).

Kieyah noted that Treasury has taken long to gazette the rules and regulations on the scheme’s operations.

“We have published in the gazette the Coffee Rules and Regulations, 2019 that provide for this scheme but the Treasury needs to do its part as required by the law so I would say the delay is not intentional,” he explained.

The coffee sector is on its knees despite the State spending Sh13 billion to waive Stabex loans (Sh7.5 billion) and debt owed to coffee cooperative societies and unions (Sh5.5 billion).

Mr. Kabando attributed the delay in the release of the Sh3 billion to the lack of regulations that govern the formula to ensure the cash goes directly to the farmers.

“The regulations have now been forwarded to the Treasury, so the process should be fast-tracked because our farmers are really suffering currently,” he told Sunday Standard.

Once the cherry fund is operationalised, farmers will access advance payment for beans with interest capped at a maximum of three percent per annum. This is intended to help farmers finance farm operations such as weeding, pruning, and harvesting.

Kieyah said the government was cautious after similar funds run by Kenya Planters Co-operative Union sunk the agency in debt. “We wish to see the scheme operate as a real revolving fund and are careful to ensure that it does not sink as happened to similar ones in the past,” he said.

TeCo asked the President to fund the farmers through coffee co-operative societies that meet a satisfactory audit rating.

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