The government has announced new reforms to the sector and revealed that it has disbursed Ksh9.7 billion to farmers through the Coffee Cherry Advance Revolving Fund in a bid to double coffee production within the next three years.
Co-operatives, Micro, Small and Medium Enterprises (MSME’s) Development Cabinet Secretary (CS) Wycliffe Oparanya revealed that coffee production in Kenya has dropped to less than 70,000 metric tons down from 150,000 metric tons annually in the 1980s and 1990s.
In a speech read on his behalf by Co-operatives Principal Secretary (PS) Patrick Kilemi during the International Coffee Day celebrations, Oparanya said the government was determined to reverse the decline.
He attributed the drop to market inefficiencies, weak co-operative governance and reduced farm productivity.
“While the average bush produces less than two kilograms, some farmers applying proper agronomy achieve up to 50 kilograms per bush. If we can raise yields to 20 kilograms per bush and expand acreage, output could rise tenfold, allowing us to surpass Uganda and even challenge Ethiopia as Africa’s top producer,” said Oparanya.
Oparanya announced that the Direct Settlement System, which directly links producers and buyers at the Nairobi Coffee Exchange, was a key part of the reforms.
“The system has brought transparency and ensured farmers receive at least 80 percent of their coffee’s value. It has also enabled co-operative societies to recover loans, reducing the risk of indebtedness,” he said.
Oparanya added that the Coffee Cherry Advance Revolving Fund, rolled out by the government to provide loans to smallholder coffee farmers, was also a success and a key part of the reforms.
“Repayments [the fund] are nearly complete. This proves that farmers are reliable partners when treated fairly and given structured financing,” he said.
He also revealed that the Coffee Bill 2024 and the Co-operative Bill 2024 will enhance accountability and empower farmers who rely on co-operatives for their livelihoods.
“The legislation will entrench governance, transparency and accountability in co-operatives while addressing weaknesses in existing oversight bodies,” said Oparanya.
Coffee Export Licences
The government is also planning to grant exclusive licences to 10 companies for the export, roasting, and packaging of coffee in a move that could shake up the sector.
The Agriculture and Food Authority (AFA) announced the move in a gazette notice dated August 22.
The licensing initiative will now allow the mentioned companies to bypass intermediaries and deal directly with international players in the coffee sector.
