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Gov’t is committed to streamline coffee sector

The government has so far disbursed over Sh 177 million of the coffee cherry fund benefiting over 15,000 farmers from 16 counties.

The introduction of the cherry fund was one of the reforms that the government introduced in the coffee sector to improve liquidity to farmers by enabling them to access basic commodities such as farm inputs as they wait for coffee sales.

Speaking during the launch of the Coffee prices stabilization framework, Agriculture, Livestock, Fisheries and Cooperative Cabinet Secretary Peter Munya said the Sh 2.70 billion cherry revolving fund that was established under the administration of New KPCU has been working and that sensitization is ongoing to reach out to more farmers to access it.

Kiambu is among the top five counties namely; Kirinyaga, Murang’a, Nyeri and Embu that have seen their coffee dwindle over the years with the decrease in production and earnings thus pushing the coffee industry from the prestigious number one foreign exchange earner to the fourth position after tea, tourism and horticulture.

“In the last couple of years, coffee production has averaged 40,000 MT per year and productivity equally dropped from a high of 6kgs per tree in 1988 to the current 2kg per tree”, the CS said.

Coffee seedlings. Photo by Wangari Ndirangu

Munya explained that the decline in production and loss of opportunities attracted the attention of government which sought to stop the decline by developing interventions aimed at ensuring full recovery of the subsector for its greater contribution to the national economy.

He noted that the establishment of the Sh 1 billion farm inputs subsidy programme that is envisaged to reduce the cost of inputs and improve application, a total of 80,087 farmers have so far been registered for the program out of which 59,000 farmers have already benefitted from the subsidy at a cost of Sh 450 million.

Munya said that the coffee revitalization programme in partnership with the World Bank under phase 1 of the project covers eight counties in Central region namely Kiambu, Meru, Tharaka Nithi, Embu, Kirinyaga, Nyeri, Murang’a, and Machakos while phase two will cover other regions.

“The intensive reforms that the Government is fast tracking in the coffee sub sector has led to high earnings to smallholder coffee farmers receiving over Sh100 for a kilogramme of cherry and growers are smiling all the way to the bank since clean beans are attracting high prices due to the demand of both local and international market,” he said.

According to Nairobi Coffee Exchange (NCE) Chief Executive Officer Daniel Mbithi, major world coffee producers, such as Brazil, Colombia and Ethiopia are grappling with weather and political challenges creating an opportunity for local beans to earn high prices.

CS Munya explained that in the year 2021/2022 coffee prices have continued to demonstrate remarkable improvement with the auction having registered an average of USD 374.40/60kg bag as of 31st March 2022, an increase of 11.1 per cent from the previous year’s price performance of USD 337.30/60kg bag.

“The National coffee payments average has risen from Sh 45 per kg of cherry in 2016/2017 to Sh 80 per kg of cherry in the year 2020/2021, an increase of 78 per cent over the period. This is indeed a very significant increase in coffee prices,” the CS submitted.

The improved coffee payments, he confirmed has improved the morale of coffee growers who have intensified investments in coffee production which is anticipated to substantially increase production of 34,000 MT in the previous year to a projected 45,000 MT in 2021/2022.

On the volumes, coffee trade at the Nairobi Coffee Exchange, Munya said, has almost doubled with an increase of 46.51 per cent from 291,810 kg to 427,545 60kg bags for the October 2021 to March 2022.

“The strategic reforms I have been spearheading in the past two years have been aimed at taking back the sector to its rightful owner: the small holder producer so that he gets a fair share of his toil. The reforms are bearing fruit, even though at a pace slower than we would have liked due to the fight back of the middlemen who have been exploiting the loopholes,” the CS reiterated.

The government has been concerned with the ongoing coffee prices fluctuations which were unsustainable and to address this the CS had appointed a technical committee on 30th August last year to examine causes of coffee price instability.

The Task Force members engaged stakeholders and established several factors which contribute to the volatile and unfavorable coffee prices, namely; inadequate coffee extension services; inadequate quality coffee planting materials; inadequate coffee research services; obsolete primary coffee processing equipment; poor corporate governance of growers’ institutions; global coffee demand and supply factors; high cost of coffee production factors such as farm inputs; and global coffee prices volatility.

Munya said that the Task force has put together a comprehensive risk mitigation framework which seeks to address some of the challenges so as to attain stable incomes with some of the strategies proposed including intensified research on coffee production; climate change adaptation; adoption of integrated soil health and fertility technologies; provision of adequate allocations for price stabilization framework, among others.

The measures once implemented, are anticipated to further contribute to full revitalization of the coffee industry and the CS called upon County governments, industry stakeholders, the private sector, the trading fraternity to support the reform agenda.

Coffee is currently grown in 33 counties by an estimated 800,000 smallholder growers and 3,000 coffee estates with a total acreage of 119,675 hectares being dedicated to coffee production. Apart from the top five counties, others with great potential outside the Mt Kenya region are Kericho, Bungoma, Trans-Nzoia, Nandi and Kisii.

By Wangari Ndirangu

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