The resolution of a fortnight-long standoff between coffee farmers in Nyeri and the management of Ndaro-ini factory over sale of the produce to an overseas buyer will bring immense benefits to the growers, if the buying prices are anything to go by.
Dutch firm Trabocca BV will buy beans from members of Ndaro-ini at Sh121 for every kilogram of cherry delivered, which is one of the highest recorded prices in the recent past.
The adjustment upwards of the prices is partly responsible for breaking the two-week impasse after the buyer agreed to adjust their contract.
In the initial agreement signed in October last year, Trabocca had committed to buy the produce at Sh115 per kilogram.
“They agreed to add an extra six shillings, which will be part of the factory expenses after we bargained,” the chairman of Gikanda Coffee Farmers Cooperative Society John Ngure told Sunday Nation. The society owns the mill.
Farmers will be paid Sh100 for every kilogram of produce delivered in December and the money will be deposited to factory’s account this week, Mr Ngure said.
“Trabocca will first deposit the money before collecting the coffee,” he said.
During the Tuesday meeting that ended the stalemate, Trabocca general manager Menno Simons agreed to collect the parchment coffee after getting a movement permit, which is to be issued anytime from tomorrow by the Coffee Directorate.
The meeting was attended by the entire management board of Gikanda Cooperative Society, Coffee Directorate area manager Elizabeth Gathoni and a representative from the State Department of Co-operatives.
The partnership agreement farmers entered into with the Netherlands-based company has been hailed as a great solution to one of the problems the coffee sub-sector is facing.
Mr Ngure and a section of his committee had vowed not to sign the agreement saying the Dutch company had entered into partnership with the farmers without informing the management.
He had insisted that, unless Mr Simons presented himself before the committee, the deal would not be honoured.
Coffee Directorate, the industry’s regulator had to intervene by asking the management to validate the partnership describing it as legitimate.
“Direct sales is where the money is and this is the future of the coffee industry in Kenya,” chairman of the Coffee Sector Implementation Committee (CSIC) Prof Joseph Kieyah said.
Ndaro-ini Factory is one of the wet millers that produces premium coffee and Trabocca BV had first sampled it before agreeing to enter into the partnership with the growers.
Kangocho and Gichatha-ini factories, which together with Ndaro-ini form Gikanda Cooperative Society also produces premium beans.
Experts say the deal will revolutionise the sector as factories and co-operatives can now engage with buyers directly as opposed to having a marketer and a miller doing the brokerage on their behalf.
“One of the advantages of this deal is that farmers will be paid on time because of they are directly linked with consumers,” noted Mr Paul Muhoro, a coffee consultant.
Ndaro-ini coffee factory will be the first to pay farmers in Central Kenya as a majority of the factories and societies still have their coffee in their stores.
This is the first time a co-operative or a factory is selling coffee directly to a buyer instead of involving a marketing agent in the value chain.
But coffee from the two factories was collected last week by Tropical Farm Management Kenya — their appointed miller-cum marketing agent.
Last year, the company paid growers Sh98 for every kilogram of cherries. Payment was also delayed because, once the coffee is taken to the Nairobi Coffee Exchange (NCE) where it is sold through the weekly auction, growers have to wait for several months.
NCE boss Daniel Mbithi said the auction opened on January 8 and farmers who delivered between October and December will be paid by early April.