State to settle coffee farmers’ Sh1.2bn debts

The societies were key in storing and marketing of coffee but most have become bankrupt.

Monday March 14 2016

A farmer harvests coffee berries in Muranga County on November 16, 2015. On March 13, 2016, Mr Ismail told the farmers to be patient as the Government was doing everything possible to assist them. PHOTO | EVANS HABIL | NATION MEDIA GROUP

A farmer harvests coffee berries in Muranga County on November 16, 2015. On March 13, 2016, Mr Ismail told the farmers to be patient as the Government was doing everything possible to assist them. PHOTO | EVANS HABIL | NATION MEDIA GROUP 

By GEORGE MUNENE
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Coffee farmers may get a debt relief after the national government promised to pay more than Sh1.2 billion the growers owe cooperative societies in a bid to boost the ailing sector.

The societies were key in storing and marketing of coffee but most have become bankrupt, inefficient or are underperforming due to the loans and mismanagement.

According to Mr Ali Ismail, principal secretary, Department of Cooperative Development, the debts would be paid in two years.

“We want to help the coffee farmers by settling the debts that weigh them down. About Sh500 million will be paid this financial year, while the remaining amount will be cleared next year,” said Mr Ismail.

Coffee farmers owe more than Sh3 billion and during his tenure as Finance minister in 2011, President Uhuru Kenyatta promised to release Sh797 million to eight financial institutions and unions, which loaned the money to farmers. It was not clear how much was released.

On Sunday, Mr Ismail told the farmers to be patient as the Government was doing everything possible to assist them.

He noted that when production of coffee went down and prices dropped, farmers failed to pay their loans.

Recently, farmers from the Mount Kenya region met at Kerugoya Stadium and called on the government to settle the debts and get rid of cartels that were exploiting them.

The growers complained that they had been getting peanuts for their deliveries and called on the Government to intervene.

At the same time, Mr Ismail denied that a coffee task force formed by President Kenyatta to investigate the exploitation of farmers comprises members of cartels that had ruined the coffee sector.

He dismissed as false claims by an association that represents coffee farmers nationally that the task force was not credible and that it would not achieve anything.

FARMERS' DEMANDS

Addressing the press in Kerugoya Town, Kirinyaga County, Mr Ismail described as misleading claims that coffee farmers were left out when the task force was set up.

“In fact, we have five prominent coffee farmers who are well-experienced in the task force. The team is all exclusive and the Government is confident it will do a clean job,” he said.

The 19-member team, which has already started its work, will visit all coffee growing counties and collect views from farmers themselves. It will take 20 days to complete its work.

The PS told the farmers not to politicise the task force, which is keen to unearth what has been ailing the coffee sector.

“Coffee had in the past been the leading foreign exchange earner nationally and the task force must know what has really gone wrong,” he said.

The team was formed when thousands of farmers from the Mount Kenya region complained that cartels had invaded the market and were exploiting them.

They threatened to uproot their crop, saying for decades they had been earning peanuts from their produce and could not break even.

The growers said they would have to abandon coffee farming if the President failed to intervene and save them from exploitation by brokers.

They said they had been wallowing in abject poverty and they could not educate their children, and meet other financial obligations.

The farmers demanded they be paid between Sh150 and Sh200 per kilogramme of coffee delivered for them to enjoy their farming.