Cabinet Secretary Ministry of Co-operatives and MSMEs Development Hon. Simon Chelugui, EGH has held a consultative meeting with coffee co-operative societies creditors in Nairobi to update them on the developments and government expectations.
He was accompanied by the Principal Secretary for the State Department of Co-operatives, Patrick Kilemi, New KPCU PLC Chairman Daniel K Kiprotich Chemno and Managing Director Timothy Mirugi as well as Commissioner for Co-operatives David Obonyo among other officers from the Ministry.
The Coffee Sub-Sector in Kenya is vital to the country’s economy, providing livelihood to 800,000 farmers, 5 million indirect beneficiaries and contributes significantly to export foreign currency exchange, the CS said adding that the Kenya Kwanza administration recognizes coffee as one of the priority value chains mapped out for revitalization.
The Coffee Reforms journey started with the coffee stakeholder conference held in Meru on June 8, 2023 which identified various challenges hindering the growth and development of the subsector. The challenges included: (i) Dwindling coffee production (ii) Competition from emerging crops (iii) delayed payment to farmers (iv) Huge debts; cartels preying on farmers’ produce and proceeds and (v) weak governance in coopeeative movement among others.
Said CS Chelugui.
Since then, the ministry has initiated a series of Reforms which include:
(i) Developed the Coffee Policy 2023, Coffee Bill 2023 and Cooperatives Bill 2023
(ii) Restructured Nairobi Coffee Exchange that has enabled coffee Cooperative unions to participate in the auction; so far 15 Cooperative unions have been licensed and participate ar the weekly trading floor in the auction.
(iii) Operationalized the Direct Settlement System (DSS) which has addressed delayed payments to farmers.
(iv) Separation of multiplicity roles by coffee players including milling, marketing and brokerage.
Coffee Debt Waiver:
During the sensitization meetings on the Coffee Cherry Advance Revolving Fund (CCARF) last year, farmers requested the Cabinet secretary to find a way to waive debts that we’re burdening them to the point of making coffee growing not worthwhile.
Consequently, my Ministry prepared a Cabinet Memo which was approved to a tune of Ksh6.7 billion to support coffee farmers to repay their debts.
He said.
The objective of the waiver is to relieve coffee farmers’ burden on outstanding loans and advances given to coffee Co-operative societies by financial institutions.
The waiver will be applied across the 33 coffee growing regions. In the coming days, with government forming a multi-agency validation team to analyze the submitted claims from co-operative societies and prepare a report to the National Treasury for the release of the funds.
It is worth noting that the exercise calls for honesty and openness on the part of the co-operative leaders and their creditors while preparing the debts; exaggeration will not be tolerated,
Added Chelugui.