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Delay in passing new coffee rules hampering sector

by kenya-tribune


A farmer picks coffee berries in Nyeri. FILE PHOTO | NMG 

Delay in effecting the proposed coffee regulations could throw farmers into the same predicament that they have faced over the years, with the new coffee year beginning in October.

If the regulations are not gazetted in the next one month, it means growers will use the same marketing structures that have for decades been controlled by cartels.

When he visited Kirinyaga and Nyeri counties recently, Industrialisation, Trade and Co-operatives Cabinet Secretary Peter Munya promised radical changes in the industry.

He said plans are underway to list coffee at the commodity exchange to enable overseas buyers to access it online.

This is meant to eliminate brokers and other cartels, the CS said.

But this would only happen if the Coffee (General) Regulations 2018 (draft) is gazetted.

Under the new regulations that were developed two years ago by a national task force before being revised again this year, the entire marketing system is supposed to be restructured to favour the grower.

The rules prohibit traders involved in coffee business from holding multiple licenses, which most multinationals have been taking advantage of to exploit poor farmers.

As it has turned out, most companies involved in the coffee business are part of the same entity but registered in different names. For instance, a coffee milling firm owns a marketing agent’s license and also a dealer’s permit to buy beans at the Nairobi Coffee Exchange for export.

So when the firms meet at the auction, they can manipulate prices.

The 2018/2019 coffee year begins in October, which is just a week away. This is when the main picking season starts. It is supposed to begin after the long rains, which come in the second week of October.

The coffee that farmers will harvest this season will be sold from January next year.

President Uhuru Kenyatta had appointed the national task force in March 2016 before constituting a Coffee Sector Implementation Committee (CSIR) to oversee implementation of the draft, which will radically change the way coffee is marketed and steer the sub-sector to recovery.

The regulations had been gazetted last year but the High Court declared them unlawful after a group of farmers and the Council of Governors moved to court.

The leaders argued that the team did not carry out public participation when developing the proposals. The court, however, ordered the Agriculture CS to ensure that the regulations are promulgated within 30 days of the first sitting of the present parliament.

But attempts by the government to involve stakeholders in resolving the impasse has failed as a group of officials of co-operative societies resolved to block the gazettement of the rules.

The officials are from the main coffee growing areas of Nyeri, Embu, Kirinyaga and Murang’a.

They want CSIR to first adjust some contentious clauses. One of them recommends paying growers directly into their individual bank accounts after their coffee is sold.

According to the officials, the new rules are meant to create monopoly by the government in handling farmers’ proceeds.

Paying farmers directly, they also contend, will kill co-operative societies.

They have the backing of millers and marketing agents, who are currently the main financiers of societies as they advance loans to farmers as opposed to borrowing from commercial banks.

“If we sort out the co-operatives, we shall have sorted out the coffee sector,” Mr Joseph Kieyah, the chairman of CSIR, told the Sunday Nation.

Mr Kieyah’s team accuses co-operatives officials of blocking the reforms. This perhaps explains why a decision to carry out a forensic audit of all coffee co-operatives in the country was reached.

After the audit, several officials of these co-operatives may find themselves jobless if they are found guilty of embezzling members’ funds.

And as Mr Munya said, small societies will be merged to improve economies of scale and farmers’ earnings.

The CS promised farmers improved payment for their deliveries. Therefore, it would be interesting to see if the new rules will in force by the time the new season’s harvest is taken to the market.

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