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Coffee farmers get revolving funds

The government has assured coffee farmers in the country of a Guaranteed Minimum Return (GMR) of Sh. 80 for every kilogramme of coffee cherry delivered under the new reforms in the sector.

Cabinet Secretary for Co-operatives and Small, Micro, and Medium Enterprises Simon Chelugui said the new rates will double up from the previous price of Sh.40, which had no guarantees.

He said that the Ksh 6.7 billion coffee cherry revolving fund was a seed investment to assist farmers in easily accessing the proceeds of their sweat, stressing that it was not a loan as most farmers thought but an advance of their earnings.

“This four billion is a cherry advance and means we can unlock liquidity for farmers and relieve them from going to financiers to borrow money at a very expensive rate. This fund is supposed to relieve farmers,” the CS explained.

Speaking to farmers in Kiambu while launching the Coffee Cherry Advance Revolving Fund, the CS noted that although the fund only covers 25 per cent, the funds will assist the farmers in addressing urgent financial needs.

“Every Tuesday we sell coffee, we recover what we give, and we also reinvest. Farmers are borrowing 100 million shillings daily, and through this, it is recovered and ploughed back into the basket,” he said.

He noted that since different coffee factories in the coffee zones do not harvest at the same time, the rotational support is there, and this is the reason why the fund that was set at Ksh 4 billion plus the previous Ksh 2.7 million cherry fund will help the farmers.

“What we are saying is that despite the price changes in the sale, if we were to sell coffee at higher prices, let’s say over Ksh 100, the benefits will be transferred back to the farmer as a bonus,” he clarified.

On matters of fertiliser, which coffee farmers in Kiambu were up in arms about, accusing the governor of the subsidy not reaching the intended level, the CS assured them that he would petition for reinstatement of the farm inputs that initially were subsidised.

“Farmers used to pay 60 percent, and subsidies from the government were 40 percent. We have seen the impact, and initially, before we started production, it was only 24,000 metric tonnes of coffee, but last year we saw growth with production of 51,000 metric tonnes, which is a 100 percent increase in production. I want to assure you that this is a tested plan, and we will go back to where we’re,” Chelugui said.

On GMR, the CS said that currently there has not been any price set for farmers when selling, and it has been a trial and error that has seen most farmers not get returns on their produce or what they deserved.

“By introducing the GMR, we are setting a minimum price where the old farmers ‘come rain, come sunshine’, they know how much they will get. This is our job and our duty to support you,” he said.

The CS also noted that most counties are employing extension services, and others have even gone to ward level, saying the government was ready to support them by sending officers to train them and work together with them.

During the meeting, Githunguri Member of Parliament Gathoni Wa Muchomba and leadership in coffee factories in Kiambu pleaded with the government to look into how they can waive the Ksh657 million debt that farmers owe.

The CS said the government is consolidating all coffee debts across the board in the country and looking for a way to be able to address the matter.

He further said that the revitalization of coffee equipment and types of machinery, as well as the factory programme that had been funded at 60 percent but stopped when the budget was discontinued, is an idea that needs to be rolled out and completed, as there are still many coffee factories that require improvement.

On Direct Sales Settlement (DSS), Chelugui said production of coffee had seen most coffee farmers and societies incur debts and steal from farmers, and therefore the DSS will ensure farmers are paid promptly within five days, and this will improve as every activity and transaction will be captured and summarised.

“We have had a situation where coffee has been sold at Ksh 184 shillings per kg and a farmer ends up with Ksh 15 shillings because of shady deals; we will tabulate activities through DSS,” Chelugui said.

During the meeting, the CS noted that going forward, the collection point for Avocado and Macadamia will be at the pulping stations in KPCU since the prices of the two commodities have not been doing very well.

He said the government is in an economic partnership with the European Union that will see Kenya partner with 27 countries to export goods duty-free.

Kimani Ichungwa, leader of the Majority Party in the National Assembly and MP for Kikuyu, said, as an oversight committee, they want the money given to the government for coffee to be spent on the intended purpose.

“We have given you money. Our job is to oversee and ensure that this money does not go to the KPCU or the government. It will be given to the person who gets it, with a guaranteed minimum return for his sweat.

He challenged the County government led by the Governor to support the opening up of coffee mills in the country and gave the example of Komothai coffee mills, which are not operational due to licences.

“These farmers are millers; they are our workers. Who can mill their coffee? They are mid-sized; they are small-scale farmers. If they get a commercial license at Komothai Coffee Mills, they can sell it,” he emphasized.

The MP gave an example of Bomet, Bungoma, and Kirinyaga counties that have been supported by their county governments to put up coffee mills. “I will continue to speak on issues about the people of Kiambu County because I campaigned for the president and the governor. Let him put in money to open up Komothai coffee mills while at our level we work with the government on how we can address the issue of debt.”

Ichungwa, however, challenged the constituents not to relent but to work with the government of the day to get their guaranteed minimum return.

By Wangari Ndirangu

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