Government approves Ksh6.6 billion debt waiver for coffee cooperatives

The government has approved a Ksh6.6 billion debt waiver for coffee cooperative societies in coffee-growing counties, aiming to relieve farmers of long standing financial burdens.

President William Ruto made the announcement through a speech delivered by Prime Cabinet Secretary Musalia Mudavadi during the 103rd Ushirika Day Celebrations at the Kenyatta International Convention and Conference Centre on, July 12, 2025.

Out of the total waiver, Ksh2 billion has been allocated in the current 2025/26 financial year. The move is part of broader coffee sector reforms targeting improved earnings and sustainability.

In addition to the debt relief, the government has expanded the Coffee Cherry Revolving Fund from Ksh3 billion to Ksh4.75 billion. Over 580,000 farmers have already benefited, receiving a combined total of Ksh8.9 billion in advance payments for their harvests.

These changes have led to an increase in farm gate coffee prices. In some counties, prices have risen from Ksh50 to Ksh150 per kilogram, boosting farmer incomes and encouraging renewed interest in coffee production.

ALSO READ:

SACCOs need strong IT systems, Insurance covers amid cyber-attacks rise

The president also outlined a restructured licensing framework that assigns specific roles to various authorities. County governments now license millers, the Capital Markets Authority licenses broking firms, and the Agriculture and Food Authority licenses buyers. This system is designed to reduce duplication, enhance accountability and eliminate conflicts of interest.

Farmers can now sell their coffee directly at the Nairobi Coffee Exchange through cooperative-owned broking firms, cutting out exploitative middlemen.

A new Direct Settlement System has been introduced to ensure farmers are paid promptly and transparently. While some concerns have been raised about its implementation, the government is conducting consultations to resolve outstanding issues.

The reforms are part of the government’s broader plan to revitalize the coffee industry, improve farmer welfare, and increase Kenya’s coffee production.

By Benedict Aoya

Sharing is caring!