Kerugoya High Court has suspended the government's decision to initiate the Direct Settlement System (DSS) for coffee farmers' payment until next year.
The DSS is a banking system used for coffee sales at the Nairobi Coffee Exchange (NCE) that was aimed at ensuring that coffee farmers receive prompt and direct payments via their mobile phones. The government introduced the system in August 2023.
When a buyer purchases coffee, they pay the full amount into a single DSS account, which then settles payments for coffee brokers and millers, and then the remaining balance is sent directly to the farmer's account.
Coffee farmers filed a court petition seeking to overturn the government’s decision to implement the new payment system, arguing that it affects their ability to save. The farmers said they still prefer payments to be made through their SACCOs.
According to Judge Edward Muriithi, the government did not conduct public participation in 15 coffee-growing counties before and after the gazetting of the payment system.
The system also lacked parliamentary approval, according to the court. The court has suspended the payment system until May 20, 2026.
"Public participation, both before and post formulation and gazettement, was violated. In addition, the facilitation through the regulatory impact assessment statement, which is important for effective public participation, was not done," the judge said.
"The national assembly committee on delegated legislation did not facilitate public participation on the stage of committee deliberation," he added.
Welcoming the move, coffee farmers, who had camped at the court during the ruling, led by National Coffee Cooperative Union chairperson, Felix Muriithi, noted that the ruling, " is a new dawn for coffee production in the country."
The move comes almost a month after Agriculture Cabinet Secretary Mutahi Kagwe, alongside his Cooperatives counterpart Wycliffe Oparanya, revealed plans to introduce an online platform for selling farmers’ produce, starting with the coffee sector.
According to Kagwe, the move was aimed at eliminating cartels and middlemen who have been exploiting farmers for years.
The online system will link Kenyan coffee farmers directly to both local and international buyers through a digital auction, according to the cabinet secretaries.
"Marketing cannot be done the same way year after year and expect different results; it's madness,'' Kagwe said.
''We have agreed that the auction must go online, allowing international buyers to participate directly. Cartels will no longer hold the market hostage. Technology will deliver transparency and better prices for our farmers,'' he added.
