The Tea and Coffee Sectors in Kenya are critical to the Kenyan economy, with 32 counties growing coffee and 25 counties growing tea. Some counties have both tea and coffee with Kiambu, Nyeri, Muranga, and Kirinyaga accounting for more than 50% of Kenyan coffee exports. Despite being one of the leading export earners in the early 1990s, the production levels have declined to the current 750,000 bags per coffee year (0.2% of global production).
About 95% of Kenya’s coffee is exported earning the country around Ksh 20 billion every year, with over 800,000 households depending on coffee.
Similar to the tea sector, coffee farmers are facing a myriad of challenges; that require strategic industry interventions to make our coffee sector globally competitive and increase returns to farmers.
Kenyan farmers have smaller coffee farms compared to other East African growers, low productivity levels, underspend on fungicides leading to pest & disease attacks, overspend on-farm inputs due to poor agronomy practices, suffer supply chain inefficiencies, and most critical, suffer deep exploitation by middlemen, marketers, and cartels due to weak corporate governance. Kenyan farmers receive 19% of what farmers in Brazil get in yields and the supply chain costs in Kenya are 3 times higher than in Brazil.
The Ministry of Agriculture through The Coffee Bill 2020 seeks to improve the fortunes of the Coffee farmer through various proposals that will streamline critical areas in the coffee value chain; production, processing, sales, and payments to farmers. The bill proposes the establishment of a direct Settlement System (DSS) into which all sales will be made and payment made directly to farmers without involving middlemen.
Coffee sales will be done through the coffee auctions, with direct sales being validated against auction prices to ensure competitive pricing and outlawing borrowing by cooperative societies which have seen many go bankrupt.
Further, farmers will directly appoint their millers, with a requirement for at least 3 millers bidding, farmers must be present during the milling process, milling charges have been capped at USD.40 per tonne (currently USD.70) and milling losses have been capped to a maximum of 18% (currently at 24%).
Through the Act, the government is proposing the creation of a government cherry fund to lend to farmers and outlawing marketing agents from lending to farmers, revamping research and extension services aimed at improving farm yields, and creation other governance structures to protect coffee farmers from the current rampant exploitation.
Kenya Tea Sector Lobby Group urges all coffee farmers and stakeholders to submit their inputs to the Coffee Bill 2020, before the deadline; 18th November 2020. A win for the Coffee Sector is good for the tea sector and the economy in general.