Bill proposes fines of up to Sh10m for transporting coffee without licence

Thursday March 17 2016

A farmer harvests coffee berries in Muranga County on November 16, 2015.  PHOTO | EVANS HABIL | NATION MEDIA GROUP

A farmer harvests coffee berries in Murang'a County on November 16, 2015. PHOTO | EVANS HABIL | NATION MEDIA GROUP 

By NATION TEAM
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Tough laws have been proposed at the Nyeri County Assembly to regulate the growing, sale and marketing of coffee.

The Bill comes as the taskforce set up by President Uhuru Kenyatta  to investigate the exploitation of coffee farmers starts its tour of the region Thursday.

Contravention of the proposed laws will attract a fine of up to Sh10 million or imprisonment for a term of not less than three years.

The Nyeri bill further states the county shall confiscate any coffee and the vessel used to transport it without  licence.

In the National Assembly on Wednesday, MPs from coffee-growing areas set out the minimum outcomes they expect from the taskforce.

MPs from Murang’a, Nyeri, Meru and Makueni lauded the creation of the taskforce but warned that it shouldn’t become a ritual or have its recommendations locked up and forgotten like previous reform ideas.

The proposed Nyeri coffee laws also require farmers to inform their cooperative society within three months if they plan to uproot their crop.

“Those found guilty will be fined not less than Sh5,000 and not more than Sh20,000,” reads the bill.

ROLES TRANSFER

The bill, sponsored by the chairman of the Agriculture Committee of the Nyeri County Assembly, Mr Kibira Ngunyi, seeks to transfer the roles played by the Coffee Board of Kenya, which has been blamed for the death of the sector, to the Nyeri County Government. 

Through the Nyeri County Coffee Bill 2016, Mr Ngunyi, is proposing a measures that will see the County government through Nyeri Agriculture Development Board exclusively control licensing of coffee transporters, coffee marketing, and insurance cover for coffee and set the limits of coffee milling in Nyeri.

The Kenya Coffee Board formulates policies and rules to regulate and develop the coffee industry in Kenya.

It also registers and licenses coffee nurseries, growers, pulping stations, millers, marketing agents, management agents, buyers, roasters, packers, warehousemen and auctioneers to ensure adherence to standards.

The bill states that no person shall buy, mill, warehouse, export or transact any coffee-related business unless they are holders of the licence issued by the Nyeri Agriculture Development Board.

Coffee transporters will also be required to obtain a licence from this board.

“The movement of coffee shall be managed through issuance of movement permits by the board. A Movement permit can only be issued at the county where the coffee is being moved from,”  reads the bill which was read for the first time on Tuesday afternoon.

Where coffee is transported without licence, “both the coffee and the vessel shall be sold by public auction and he proceeds credited to the board,” says the bill.

STOLEN COFFEE

In January, police in Nyeri impounded more than 170 bags of coffee believed to have been stolen in Nyeri factories.

According to police, the lorry ferrying the coffee had not been licensed to transport the crop.

The bill also  sets limits for pulping stations postulating that the board shall not license a pulping station unless the operator has the capacity for 20,000 kg of cherry per year for an individual and 300,000 kg for a co-operative society.

The bill also prohibits a commercial miller from operating as a marketing agent.

Should the bill become a law, registered millers shall submit milling loss quantities and grade allocation reports to coffee societies within 48 hours.

To guard the farmers against rampant coffee theft that has rocked Nyeri county since 2015, the bill compels every commercial coffee miller to take an insurance against fire, theft and other risks for all the coffee delivered for milling and for milled coffee which has not been handed over for marketing.

“The value of the insurance cover shall be as directed by the county executive member. In the event the coffee is stolen, the farmer will be compensated by the cover,” says Mr Ngunyi.

To market coffee from Nyeri, a marketing agent must place between million (Sh100 million and $12 million (Sh1.2 billion) as a bank guarantee registered in favour of the growers.

The bill requires that the prospective marketer deposits the sales proceeds into the respective grower’s bank account within 14 days after the sales.

Every marketing agent registered under this section shall submit operations reports and sales records and contracts to the grower and the board.

CONSULTATIONS

Already, the bill has come under criticism from some farmers who argue that they were not consulted.

The Peasant and Medium Coffee Farmers Association (PCFA) chairman Harrison Munyi said that they were waiting for the bill to be committed for public participation where Both Mr Ngunyi and Mr Munyi have promised to tables their proposals to the taskforce, whose composition they have faulted.

In Kirinyga coffee farmers want the task force to address the issues of cartels and high cost of farm inputs.

Through their coffee societies leaders, the more than 5,000 farmers Wednesday complained that cartels had ruined the sector.

“We want the Task-Force to collect our views when it visits the region and recommend to the President on how the cartels which have invaded the sector can be gotten rid of,” said the chairman of the New South Ngariama Coffee Farmers Cooperative Society, Mr Ephantus Magu.

Answering questions from the Nation in Kerugoya town Wednesday, the leaders noted that members of the cartels have penetrated the market, making the farmers to earn peanuts for their produce.

The farmers have been getting as low as Sh20 per kilogramme of coffee delivered, making difficult for them to earn profit.

Some of the farmers have even abandoned coffee farming and started growing horticultural crops which earn them handsome returns while others have threatened to uproot the crop.

The farmers want their produce to be bought between Sh150 and Sh200 per kilogram of cherry to break even.

COFFEE MINISTRY

Elsewhere, coffee farmers from Embu, Tharaka-Nithi and Meru counties appealed to President Uhuru Kenyatta to form a separate ministry of cooperatives to address issues facing the coffee sector.

They said they were uncomfortable with the coffee issues and matters concerning the cooperative movement handled by two separate departments.

Speaking at Kangaru School while giving views on how best to regulate the coffee industry, the farmers said they wanted the industry to remain under the national government.

Embu County Mill chairman John Maruku said they wished the ministry be tasked with receiving grievances from coffee farmers and solving them.

He also called for total liberalisation of the coffee sector such that they can sell their produce to buyers of choice at the factory level.

At the National Assembly, Kiharu MP Irungu Kang’ata said the taskforce should interact with coffee farmers all over the country and publish its schedule to allow as many of them as possible to participate.

He said the minimum outcomes should include a minimum guaranteed payment for farmers per kilo of coffee, the opening up of the Nairobi Coffee Exchange, the scrapping of the system where farmers have to enter agreements with cooperative societies and a solution to the disparity of coffee prices between Nairobi  and other markets found.

Kabando wa Kabando (Mukurweini MP, TNA) said the Agriculture committee’s efforts to resolve similar issues in the sugar sector had been met with numerous obstacles from vested interests.

He said the committee was happy that the Nation had  highlighted the plight of coffee farmers issues in a series of exposes. 

“We are asking this taskforce not to become a ritual like has become the habit in the past five decades of Kenya’s independence,” said Mr Kabando.

He said the issue was among those raised at the Central Kenya leaders’ meeting in Sagana  with President Kenyatta.

Mr Kabando said there was particular interest in the Kenya Planters Cooperative Union, the institution that was used to sell Kenya’s coffee and whose collapse has been synonymous with that of the coffee sector.

“The hallmark of theft in the agricultural sector of Kenya is the KPCU. We want correction of the coffee sector but we are also asking for return of what has been stolen,” said Mr Kabando.