Coffee farmers earn more from direct overseas sales

02nd May, 2020
Coffee farmers earn more from direct overseas sales

Coffee farmers in Nyeri are now being paid more after adopting direct sales to overseas markets instead of the traditional Nairobi Coffee Exchange.

Two weeks ago, farmers affiliated to Ndaro-ini Coffee Factory in Mathira Constituency, formerly under Gikanda Cooperative Society, were paid Sh115 per kg by a Dutch firm.

Last year, the same firm, Traboacca BV, bought the factory's coffee at a record Sh121 per kg.

According to the factory's chairman Joseph Mukuha, some 1,400 farmers have been paid Sh98 million this year, and Sh78 million last year.

The Dutch firm also pledged coffee drying tables, pulping machines and farming equipment to improve the quality of local coffee. 

The deal has seen coffee production in farms affiliated to the factory rise from 600,000kg last year to 980,000kg this year.

“This is what happens once you are guaranteed minimum payments. We have also improved on quality. In addition, all milling loses are met by Traboacca BV,” the chairman observed.

The buyer has also undertaken construction of drying tables and purchasing of pulping machines to upgrade the quality of the factory and provide better equipment for farmers.

Farmers now say the deal was a major victory against coffee cartels that bitterly fought direct sales. 

Tropical Farm Management has been milling and marketing the society’s coffee for the last three years.

Muriithi Maina, who brokered the deal between the farmers and the Dutch firm, says direct marketing provides more opportunities for higher returns.

In the neighbouring Baricho Cooperative Society, farmers were last week paid an average of Sh81 shilling per kilogramme delivered in 2019/2020.

The society is made up of four factories: Karatina that will be paid Sh80.10 per kg, Karindundu (Sh83.30), Gaturiri (Sh80.40) and Gatomboya (Sh81).

Last year the factories were paid an average of Sh64.5 per kg with the highest earning Sh80 per kg and the lowest Sh52.

The society's chairman, John Giting’a, attributed this year's improved payments to direct coffee sales to overseas markets, which accounted for 88 per cent of the total earnings.

According to Mr Giting'a, only 12 per cent of coffee was sold through the auction at the Nairobi Coffee Exchange.

“We have realised favourable earnings this time because up to 88 per cent of our produce was sold to overseas buyers; only a small percentage was sold through the auction,” he said.

The society also adopted prudent financial management that saw it reduce milling losses from 20 to 18 per cent.

The society milled its coffee at the Central Kenya Coffee Mill.

All savings made from milling were ploughed back to farmers earnings.

Central Kenya Coffee Mill General Manager Charles Mwea said lower milling costs were a boon for the farmers.

“Milling losses were on an average of 18 per cent. Lowering this meant increasing efficiency and recoveries,” he said.

The society's marketing agent, Coffee Management Services (CMS), encouraged more factories to adopt direct sales for higher returns.

“We have a wide marketing network that played in our favour and gave us an edge over others. We are determined to keep on posting impressive prices for our farmers who have for a long time yearned to put more money in their pockets,” said CMS General Manager Martin Ngari.

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