MPs push for the halving of coffee loan charges

Fredrick Kinoti inspects his coffee berries at Nthimbiri village in Imenti North, where he has a one acre coffee farm. MPs from coffee growing areas are infuriated over the government’s failure to reduce the cost of loans advanced to coffee farmers. PHOTO | PHOEBE OKALL | NATION MEDIA GROUP

What you need to know:

  • Silent row is brewing over the government’s failure to reduce the cost of loans advanced to coffee farmers.
  • Coffee loans attract a 10 per cent interest rate on a reducing balance basis, according to Agriculture CS Willy Bett.
  • During the Tuesday Session, Bett revealed only nine coffee growers had been licensed to mill coffee while another five were on the way.

A silent row is brewing over the government’s failure to reduce the cost of loans advanced to coffee farmers.
MPs from the coffee growing areas say even though the government had allocated Sh2.1 billion to the industry in the 2016/2017,  farmers continued to pay expensive loans.
Last Tuesday, Agriculture Cabinet Secretary Willy Bett failed to commit before Parliament that the interest of loans advanced to coffee farmers could go down soon.
Bett said coffee loans attracted a 10 per cent interest rate on a reducing balance basis. He added the rate remained the same for the Sh2.9 billion loan given to more than 100,000 coffee farmers across the country.
The CS’s statement before the Agriculture Committee generated angry reactions from MPs who thought his answers to coffee and several other agriculture related questions were not substantive.
The committee asked Bett to return after 30 days to give tangible and committal answers. Among the MPs who had asked questions are Gichugu’s Njogu Barua, Manson Nyamweya(South Mugirango),  Agostinho Neto (Ndhiwa), Ben Washiali (Mumias East) and Francis Mwangangi (Yatta).
Barua, who has been pushing for a reduction to 5 per cent of interest rates on loans given by the Commodities Fund, the precursor of the Coffee Development Fund, said the loans were expensive.

FIXED RATE INTEREST RATES
“We want interest rates like those by entities such as Uwezo Fund on a fixed rate. We also want cooperatives that are owed money by Kenya Planters Cooperative Union (KPCU) to be paid up so that they pay farmers,” he said.
The MP had asked the CS when cooperatives such as Karithathi and Kianderi in Kirinyaga County would be paid their Sh14 million and Sh2.8 million debts by the KPCU.
Bett said the two are among the cooperatives owed Sh135 million by KPCU.
During the Tuesday Session, Bett revealed only nine coffee growers had been licensed to mill coffee while another five were on the way.
They are Mt Elgon and Bungoma coffee mills, Kirinyaga Coffee Mills and Hill Farm and Gikanda Coffee Mills in Nyeri .
Bett also confirmed that farmers were represented at the coffee auction at the Nairobi Coffee Exchange.
“We have five farmers in the committee of eight. The tenure of the current team expires in 2017,” he said.
MPs wanted to know why the Exchange had been taken over by non-farmers.