Agriculture Cabinet Secretary (CS) Mutahi Kagwe has cautioned farmer co‑operative societies against the growing habit of borrowing loans without clear repayment plans, warning that the government will no longer continue writing off debts that fail to benefit farmers.
Speaking during a sector forum, Kagwe said stricter accountability measures have been put in place across agricultural value chains to end the era of repeated bailouts. He noted that while the government is currently in the process of settling debts in the coffee, tea, and sugarcane subsectors, such interventions cannot be sustained indefinitely.
“I think it is important for us to appreciate that the government does not have infinite money for write‑offs when we do not even know or you cannot audit what that money was spent on,” Kagwe said. He added that the state cannot plan for endless debts, stressing that the only long‑term solution is to eliminate the concept of debt write‑offs.
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The CS cited the coffee subsector as an example, pointing out that many factory directors had borrowed beyond their capacity to repay, often without the knowledge or consent of farmers. He lamented that some directors lacked business plans and accountability mechanisms, leaving factories financially crippled.
While reassuring coffee farmers that the government would settle their Sh6.8 billion debt, Kagwe said the enactment of the Coffee Act 2026 would address fiscal management challenges that have long plagued the sector. The new law proposes the establishment of a Coffee Board tasked with auditing loan purposes, identifying beneficiaries, and ensuring repayment plans are in place before approval is granted.
“We will also not allow people to commit innocent farmers to repay loans taken up in their name. We must know the purpose of the loan, and once the project for which the loan was taken up is complete, the beneficiaries, who are the farmers, must be invited to approve the project,” Kagwe said. “Therefore, let us agree, the government will not allow you to take a loan without a repayment plan.”
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The CS also raised concerns over weak governance in co‑operatives, blaming poor leadership for the persistent financial woes.
Kagwe urged farmers to demand greater transparency and accountability from their officials, noting that co‑operative governance must be strengthened to prevent factories from sinking into debt.
By Masaki Enock
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