Coffee farmers in Kirinyaga have high expectations of getting good returns after the Capital Markets Authority (CMA) licensed Kirinyaga Slopes Coffee Brokerage Company Limited as a coffee broker.
It joins 13 other firms that have been cleared by the regulator for the role.
The move will now see the farmers reap big since the licensing by CMA will allow the 14 cooperative societies to sell their coffee directly to buyers at the Nairobi Coffee Exchange (NCE).
In a statement dated October 17, 2023, CMA stated that the licensing of the firm is part of its efforts to deepen coffee sub-sector reforms.
This is after the purge to clear off what the government termed as rogue marketers and brokers who feasted on farmers’ sweat and blood.
The licensed coffee brokers are Meru County Coffee Marketing Agency Limited, Kipkelion Brokerage Company Limited, Murang’a County Coffee Dealers Limited, United Eastern Kenya Coffee Marketing Company Limited, and Mt. Elgon Coffee Marketing Agency.
Others are Embu Coffee Farmers Marketing Agency Limited, Kinya Coffee Marketing Agency Limited, Alliance Berries Limited, Bungoma Union Marketing Agency Limited, New Kenya Planters Co-operative Union PLC (New KPCU), KCCE Marketing Agency Limited, Meru South Coffee Marketing Company Limited, and Baringo Kawa Brokerage Company Limited.
While applauding the move, the CMA Chief Executive Officer Wyckliffe Shamiah said: “The momentum of the reform agenda needs to be sustained to ensure full implementation of the capital markets (Coffee Exchange) regulations. This is expected to ensure the marketing and trading mechanism at the Nairobi Coffee Exchange promotes fair trade, is transparent and enhances price discovery, ultimately benefitting the coffee farmers.’’
The Capital Markets Act was reviewed in 2016 to expressly give CMA the mandate to regulate spot commodity markets, including the coffee commodity market in Kenya.
The government, through Agriculture and Food Authority (AFA) this year, nullified the 2022 coffee regulations; a move which farmers in the multi-billion shilling coffee sector said was a big win for them since they would now sell their coffee through their respective co-operative societies, unions and associations.
In a circular number 001/2023 dated January 17, 2023 and signed by the Authority’s acting Director General Beatrice Nyamwamu, AFA wrote to all coffee societies, notifying them of the withdrawal of the Crops (Coffee) (General) (Amendment) Regulations, 2022.
AFA directed that the Crops (Coffee) (General) Regulations, 2019 and the Capital Markets (Coffee Exchange) Regulations, 2020 as the only two sets of regulations which guide the coffee industry development, promotion and regulation.
The coffee 2022 regulations were put in place June last year by former Cabinet Secretary for Agriculture, Livestock, Fisheries and Cooperatives Peter Munya after expiry of licences of coffee marketing agents that had been extended for two consecutive years – 2020/21 and 2021/22 crop years.
Munya had dismissed CMA’s power to licence coffee brokers and supervise the NCE, saying the stock market regulator is not properly structured and mandated to oversee marketing of coffee in the country.
The former CS was opposed to the Crops (Coffee) (General) (Amendment) Regulations, 2019 and Capital Markets Coffee Exchange Regulations, 2020 for introducing brokers to replace marketing agents and new governance structures.
In an Executive Order No. 1 of 2023 released by President William Ruto in January 2023, the Coffee Sub-Sector Reforms Implementation Standing Committee was domiciled in the Deputy President Rigathi Gachagua’s office.
The Coffee Regulations 2019, led to the formulation of the Capital Markets (Coffee Exchange) Regulations 2020 that sought to incorporate coffee exchange and licensing of brokers.
By Sacco Review reporter
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