Nyeri County Assembly has passed a bill seeking to salvage the ailing coffee sub-sector.
The Nyeri Coffee Bill 2022, sponsored by the County Assembly chairman for the Agriculture and Fisheries Committee Muriithi Ndagita, seeks to align some of the provisions of the Coffee Bill 2020, with the recommendations from coffee farmers at the county level.
Ndagita says that the bill will provide guidelines on how the county government can support coffee farmers to increase coffee production.
“Most of the coffee issues are being addressed at the national level, so what the bill does is to align some of the crucial recommendations with the demands of coffee growers at the local level. We have previously seen the county supporting other sectors in the Agriculture value chain, while the coffee sub-sector has remained neglected and this bill tries to address that,” he said.
Provisions of the bill, which is awaiting the governor’s assent, propose the creation of a Coffee Development Fund, which will offer affordable loans to coffee farmers through the coffee societies.
According to the bill, the coffee fund will be anchored on the Enterprise Development Fund, a revolving fund established by the county government to offer affordable credit to enterprises.
“We have proposed an initial capital of Sh100 million in 2022/2023 budget to go towards the coffee development fund. We have also proposed that an additional Sh50 million be added to the kitty in every financial year. The loans will attract a 5 per cent interest rate and the security will be coffee and not the coffee factory’s assets as has been the case in the past,” said Ndagita.
The bill has also put in place strict borrowing restrictions for factories and societies that are meant to cushion the coffee farmer from the perennial debt crisis. A section of the bill states that the CEC in charge of Agriculture shall regulate and oversee borrowing by coffee factories and societies from banks and any other financial institutions.
It also prohibits the factory management from using any farmers’ assets, which include factory and society land, title deeds, machinery and equipment as collateral. This, Ndagita says, will cushion farmers from some of the unnecessary loan repayments that farmers are subjected to by factory management.
“Borrowing shall be within the 20 per cent operational cost of the factory. A coffee co-operative society shall at all times notify the Department before taking any loans or borrowing money from a bank, financial institution or an individual. The notification shall be in writing, explaining the purpose of the loan,” reads the bill.
During the debate that preceded the passing of the bill, Nyeri MCAs supported provisions on the bill which outlawed hawking of the coffee. According to the bill, coffee hawking attracts a Sh7 million fine. Further, proceeds from the confiscated coffee will go towards the Coffee Development Fund.
Once signed into an Act, the bill will allow Nyeri county farmers to market their coffee in one pool. There are proposals for the formation of the Nyeri Coffee Union, which will act as the official Nyeri county coffee marketing entity. The Union, according to the bill, will draw its membership from coffee societies and will be registered with the Coffee Market Authority. Members of this union will act as the chief marketing agents who will source a market for Nyeri’s coffee.
Ndagita says this will help wipe out the middle men and in turn increase the proceeds that get to the coffee grower.
“With the union, we do not have to give the coffee to brokers and middle men, the farmers can market their own coffee and control who buys their coffee. In addition to negotiating for better prices for their coffee, they will also save a lot of money that goes to marketers and brokers. This means that at the end of the day, the coffee farmers will have more money in their pocket,” said Ndagita.
By Wangari Mwangi