Coffee farmers should continue receiving Government support for at least three years, experts tasked with reviving the sub-sector have recommended.
The Coffee Sub-Sector Implementation Committee (CSIC) has also castigated Government’s efforts to revive the industry, saying they are doomed to fail if the indebtedness of 500 co-operative societies is not addressed.
They said assistance to coffee farmers should continue up to a time when they could stand on their own feet.
“Once we reduce that cost of production, the benefits will be transferred to farmers,” said CSIC chairman Joseph Kieyah.
To this end, 500 wet stations have been rehabilitated and planting materials and extension services provided.
The committee also noted that co-operative societies in the coffee sub-sector were drowning in debt, a situation that had made every other effort to revive it to fail.
They want the Government to conduct a forensic audit to free coffee farmers from “odious” debt, according to Prof Kieyah.
Besides bailing out the co-operative societies through debt waivers, the Government has put in place other measures such as allocation of Sh1 billion as part of the Sh3 billion Cherry Coffee Revolving Fund established in March by President Uhuru Kenyatta.
The fund is aimed at ensuring coffee farmers do not suffer cash-flow problems due to, for example, a delay of payment by co-operatives.
Plans have also been mooted for part of subsidised fertilisers to be ring-fenced for coffee farmers.
“The National Treasury has communicated the resolution of Parliament with regards to ring-fencing Sh1 billion from the allocation of fertiliser subsidy to cater for coffee farmers,” said National Treasury CS Henry Rotich in the Budget Summary for the 2019/20 fiscal year.
“This is being considered in the context or revival of coffee sector initiatives.”
Kieyah poured cold water on the reforms, noting that only a forensic audit of the debt would pave the way for revival of the sub-sector.
“Those reforms will not work until we sort out the debt issue,” he said, adding that only after the audit would the Government know the next course to take.
He regretted that some of the debts were incurred by co-operatives without the knowledge of the farmers.
In its bid to breathe life into the ailing coffee sector, the Government has poured billions of shillings to bail out the co-operatives. Some observers do not think this is working.
A parliamentary committee last year proposed that an audit on all coffee societies that had received waivers be instituted.
Register to advertise your products & services on our classifieds website Digger.co.ke and enjoy one month subscription free of charge and 3 free ads on the Standard newspaper.
Kenyan Business Feed is the top Kenyan Business Blog. We share news from Kenya and across the region. To contact us with any alert, please email us to [email protected]