Coffee farmers will start pocketing 80 per cent of gross earnings while their co-operative societies, millers and marketers will share the remaining 20 per cent if Parliament passes new regulations.
The proposals are part of the wider coffee sector reforms initiated by President Uhuru Kenyatta in 2016 following pleas by Mount Kenya leaders ahead of the 2017 elections.
Mr Kenyatta appointed a task force to look into the sector which handed over its findings in 2017. The findings were the basis of crafting the regulations.
However, the High Court threw out the regulations, which were to be anchored in the Crops Act, for lack of public participation.
The new regulations, which are awaiting handover to Attorney General Kihara Kariuki before they are forwarded to Parliament, are a result of consultations with stakeholders, including the public and the Council of Governors.
“The cost charged by co-operative societies to growers for pulping, factory expenses, transportation, milling, warehousing, brokerage, and any other expenses shall be as per the societies’ budget but shall not exceed 20 per cent of the gross earnings from coffee sales,” states the new regulations.
The coffee industry contributes about Sh20 billion to the economy annually.
Over 700,000 smallholder farmers and 3,200 estates spread across 31 counties grow the crop.
As part of the reforms, President Kenyatta announced that the government had set aside money for the sector during the State of the Nation speech a fortnight ago.
“We have set up a Sh3 billion Cherry Advance Revolving Fund to be operational from July 1. Consequently, all coffee farmers across the country will be able to access the money at a modest interest rate of three per cent,” the President stated.
Agriculture PS Hamadi Boga said the regulations were being edited before submission to the AG.
“We are almost done. What delayed us was concern by the Council of Governors on licensing but now we are all in agreement. Soon they will be with the AG,” he said.
Nyeri Senator Ephraim Maina said the issue of extension officers should be taken seriously since coffee production has considerably dropped.
“The regulations are welcome and we must see to it that the farmer is not exploited anymore. We must get back to the old system where agriculture extension officers guided farmers in best farming practices. Cooperatives must also be strengthened,” he said.
The industry has encountered a number of challenges in the past two decades, which have resulted in a decline in land under coffee from 170,000 hectares to 108,000 and production from 128,926 tons to about 40,000 tons. Only 3 per cent of processed coffee is consumed locally, with the rest being sold in the international markets.
In a classic government move, the regulations introduce rows of bureaucracy which, according to the drafters, are aimed at ensuring that there is accountability and a paper trail.
The regulations introduce several licences. The county government will issue four licences, including those for coffee nurseries, pulping, milling and roasting.
The Agriculture and Food Authority (AFA) will issue commercial millers’ licences, for warehouses, coffee liqueur, cupping laboratory and coffee traders.
Some of the licences will be targeted at the youth. “Licences shall expire on June 30 of every year and holders wishing to renew them may apply by June 1 preceding the expiry of the licence,” reads part the regulations.
They obligate AFA to keep a data base and disseminate information on the coffee industry as well as establish linkages with various government agencies and research institutions.
County governments will offer extension services and primary coffee processing in collaboration with law enforcement agencies. They will also monitor and report incidence of pests and disease outbreaks and take appropriate action in collaboration with AFA and other relevant government agencies.
The regulations also mandate every county government to register all coffee growers in their areas.
“The county governments shall maintain up-to-date registers of all coffee co-operative societies, associations, estates and nursery operators and share the information with the authority,” states the rules.
“A person shall not move coffee or cause any coffee to be moved without an original movement permit issued by the licensing authority… The licensing authority shall monitor the movement of parchment coffee between stores and the movement of clean coffee and hulled mbuni to the market in order to ensure that the coffee is safe and to avoid any illegal dealings.”
The regulations also call for audits of all coffee cooperative societies to check whether they are economically viable and to make suggestions on how to strengthen them.