The government and coffee stakeholders are working on modalities to ensure smooth milling and marketing in efforts to guarantee that the farmers are not negatively affected by the reform process.
State Department for Crops Development Principal Secretary (PS) Kello Harsama said that the reforms are being led by Deputy President Rigathi Gachagua and his team has engaged all stakeholders in the coffee value chain and they have come up with very good suggestions.
“The coffee sector reform agenda is on course and it is going to happen as planned with the bill already in parliament,” said the PS when he spoke on Tuesday during a Coffee Stakeholders Consultative meeting hosted in conjunction with the Agriculture and Food Authority (AFA).
Harsama said that they have however received some petitions from players in the sector asking for support as the reform agenda continues and one of the petition items indicated that some of the coffee mills have been closed like four in Kiambu County and one in Nyeri County and farmers have in their stores a lot of coffee which is not processed and families relying on coffee are suffering with children not going to school because of the lack of school fees.
“There have been indications that a number of employees have been laid off where coffee mills have been closed, very little coffee has been traded at the Nairobi Coffee Exchange because value chain actors have been disengaged and therefore coffee farmers are unable to efficiently trade,” explained the PS.
He added that Kenyan coffee marketing is not getting better across the world with prices at the coffee auction plummeting to US$ 295 per bag and because of these challenges the government called for the stakeholders to meet so that they can share on ways to address the challenges and improve the sector in a way that will not undermine the reform agenda.
Trade Principal Secretary (PS) Alfred K’Ombudo said that export performance for the country has stagnated for a long time and if it is going to be reversed it is the agriculture exports that will be the turnaround factor with coffee being a major player.
“We are looking at improving our coffee export performance by moving from the current around 40,000 metric tons back to 150,000 metric tons,” explained the PS.
He added that they do not want to just improve the quantity but the quality is also important and they are putting money in the hands of farmers which will help in achieving the required international quality.
“We need to work in partnership with a few organizations including the Kenya Export Promotion and Branding Agency and we are encouraging the production of coffee across the country so that we can increase the country’s output,” said K’Ombudo.
The PS highlighted that he accompanied Deputy President Rigathi Gachagua to Colombia and part of their remit there was to understand how the country is exporting coffee worth over four billion dollars into the USA market.
“We are reforming our Foreign Trade and Commercial Service to make it more specific to products so that if you have an Attaché out there they are able to specifically understand the crop and we want to work much closer with the Crops Development PS and his team so that the representation can be fit for purpose,” said K’Ombudo.
Agriculture and Food Authority (AFA) Board chairman Cornelly Serem said that they will have deliberations with key stakeholders in the sector and if it takes amending the law so that there is a smooth operation and sale of coffee then they will have to amend the law.
“Something must be done between now and when the bill comes in because the interest of farmers comes first,” he said.
Serem said that there are coffee mills whose licenses have been canceled and they had taken coffee from the farmers thus there is a need to harmonize and normalize issues and allow them to sell the coffee as they work on the reforms because the millers are holding farmers’ coffee and they cannot pay them because they also cannot export and thus the farmer is the one suffering.
He said that they will fully support the coffee sector reforms agenda as he expressed hope that the reforms will factor in the interest of all the stakeholders.
James Mureithi speaking on behalf of coffee millers said that he represents seven commercial millers whose licenses have been canceled and they hold over 7,000 hectares and in total, they produce around 10,500 metric tons of 51, 800 metric tons that the country produces.
“The group manages to produce a little more than 20 percent of Kenyan coffee and they finance up to 60 million dollars in the coffee sector,” explained Mureithi.
According to Mureithi, they have been selling to international buyers like Starbucks who are buying more than 120 containers.
“Because our licenses have been canceled, we cannot keep the staff and we have given them notice and before the end of October we will be laying a substantial number of about 18,500 employees,” said Mureithi.
National Coffee Cooperative of Kenya chairman Francis Ngone called for the gradual implementation of reforms in the sector as he termed the current reforms as abrupt.
“I remember back in the days in Murang’a we only had 11 societies and right now we have 53 societies and it becomes so much complicated when it comes to economies of scale and something needs to be done about it,” said Ngone.
By Joseph Ng’ang’a