Thursday, May 23, 2024
Home > Agriculture > State Suspends Coffee Firm Over Farmers’ Dues

State Suspends Coffee Firm Over Farmers’ Dues

The government has suspended the coffee license of the Eagle Crown Coffee limited for delaying payments from Auction.

Agriculture and Food Authority (AFA)Ag. Director General Kello Harsama in a statement signed by the Agriculture Cabinet Secretary Peter Munya Thursday said that according to a sale agreement dated 16th March 2021, the company has not remitted the sales proceeds to the New Kenya Planters Cooperative Union (NKPCU) to pay the same money to farmers after the recommended deductions.

A complaint letter from the NKPCU dated 30th March 2021 had asked for the immediate suspension of the companies licence no. 1000170 for delayed payments of 3,780 bags valued at USD 1,493,291.26.

According to AFA, under the 1st schedule under the coffee buyer, under the crops (Coffee) general regulations of 2019, a coffee buyer shall operate under obligations one being remit of coffee sale proceeds to the direct settlement system electronically or by a bankers cheque within 5 working days from the date of sale.

In addition, one is also liable for suspension from trading in case of default of payment of coffee proceeds through the direct settlement system within the prompt date.

According to AFA, the Nairobi Coffee Exchange Trading rules of 2021 further states that a dealer who has not settled payments in full on prompt date shall be considered a defaulter and interest on outstanding payments will accrue with effect from the day after the expiry at the prevailing mean commercial banks’ lending rates in US dollars.

“In view of the provisions in the regulations AFA in consultation with the Exchange has thereby suspended the buyers license no 1000170 dated 19th August 2020 until the company complies with the regulation,” said Harsama.

Meanwhile, Agriculture Cabinet Secretary Peter Munya has said that the government is serious in taking action against companies who are delaying farmers’ money.

Last month, President Uhuru also issued an Executive Order number 2 of 2021 on the Coffee Sub-sector reforms approving the transmittal of the Coffee Bill, 2021 to parliament.

By Wangari Ndirangu

Leave a Reply