Government keen on clearing arrears owed to coffee, dairy farmers  

PS Cooperatives Patrick Kilemi and Commissioner for Cooperatives David Obonyo (right) before he National Assembly Trade, Industry and Cooperatives Committee. Photo: Obegi Malack

State Department of Cooperatives Permanent Secretary Patrick Kilemi has assured farmers that the Government has put in place measures to pay them and relieve them from mounting debts and market uncertainties.

The PS who appeared before the National Assembly Committee on Trade, Industry and Cooperatives chaired by Aldai Member of Parliament Maryanne Keitany assured the committee that the mechanisms will be felt in the next few months.

The PS had been had appeared to give a report regarding delayed payments to coffee and dairy farmers by various cooperatives in Embu County.

He said the Government through the New Kenya Planters Cooperative Union (KPCU) will ensure coffee farmers across the country benefit from the KSh4 billion Coffee Cherry Advance Revolving Fund (CCARF).

The PS said the ministry is also aware of past delays in payment to dairy farmers in by New KCC Company.

He said New KCC released KSh26 Million on March 18, being amount payable to dairy farmers in Embu County up to the Month of February 2024.

The Ministry is working towards ensuring that New KCC will pay dairy farmers by fifth of the every month by July 2024.

In the case of coffee, the establishment of Direct Settlement System (DSS) will ensure delays are avoided since coffee buyers will deposit coffee sales directly to DSS from where farmers will be paid.

The Government committed in granting coffee farmers access to the promised KSh80 a kilogram of cherry, given that their was allocation in the budget through the CCARF established by Government to be paid to coffee farmers as advance against coffee they had already delivered to their cooperatives.

The advance is meant to assist coffee farmers meet their financial needs as they wait for sale and payment of their coffee.

The advanced amount would then be recovered from the sale of coffee to replenish the fund in readiness for the next production cycle.


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Cabinet had approved an additional KSh4 billion to CARF with a view of increasing the rate of advance from KSh20 per kilo to KSh80 per kilo of cherry in two installments and based on coffee quality.

KSh500 million of the approved amounts has been released and available for disbursement to the farmers upon request.

The farmer is paid KSh40.00 upon delivery of cherry to the cooperative. A second installment is paid on the same coffee after processing and based on quality as follows Parchment 1 going at KSh40.00, Parchment 2 selling at KSh20.00 and Parchment 3 will be KSh10. Mbuni and Parchment L do not qualify for second installment of the advance.

The cooperative society can also apply funds to facilitate processing of coffee at the rate of KSh5per kilo of the coffee it has received from its farmers.

As at April 8, New KPCU had disbursed KSh4,025, 681,794.69 to 316,167 farmers across the country.

The amount advanced to the farmers is recovered after final sale of coffee through the DSS.

The Coffee Bill has also been developed and it has been presented to The Senate for appropriate action.

The bill proposes prohibition the involvement of the same entity/company in milling, marketing and dealing in coffee and also it establishes the DSS and allows farmers’ organisations to sell their coffee at the Nairobi Coffee Auction.

By Obegi Malack

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