The Coffee Regulation 2019, steered by the government, has seen hundreds of farmers return to their farms after they abandoned the industry for decades. They had quit the industry over the poor governance structures and delayed payment, among other concerns. But presently, the growers are seeking the effectiveness of the Direct Sale Settlement (DSS) that has led to delays in the payment process.
Three months ago, Kenya Coffee Producers Association (KCPA) Chairman Peter Gikonyo raised a red flag, citing delay in coffee farmers’ payment through the DSS, as most farmers called for the audit of the payment system to ensure the bottlenecks were streamlined.
KCPA stated that coffee payment and milling affected the sector negatively, as the union and cooperative forums defended the reforms. But Nairobi Coffee Exchange (NCE) CEO Lisper Ndung’u said through DSS payment is made promptly with a few issues being sorted.
“Most of the farmers have confirmed to have received their pay, and those yet to receive their dues are required to bring in their documents to help establish the cause of the delay,” said the regulator. But as the reform agenda is under intense debate across the counties, more than Sh4 billion have been disbursed through the Cherry Advance Funds facilitated by the New KPCU to assist in nurturing the produce as the growers await their proceeds.
Last week, Coffee farmers earned Sh 581 million from the sale of 18,762 bags (1,156,930 kilogrammes).
Igegenia Cooperative Society in Kiambu chairperson Paul Mundia rubbished the DSS, saying the former payment system operated by the milling agents was perfect.
The payment disbursement through the DSS, Mundia says, is surrounded by bottlenecks owing to a lack of prior information to the cooperative society leadership. Mundia supports KCPA’s calls to abolish the DSS platform to allow the millers to channel payments to the societies.
” Those manning the DSS have failed as they do not engage the farmers as it is supposed to be. The payment was remitted without notifying the societies as it should be,” said the Igegania society chairman. Benson Makhanu, a farmer affiliated with Kibisi Farmers’ Cooperative in Bungoma, said the reforms have impacted positively on the farmers in the western region, with many focusing on increasing production.
“What is interesting is that NKPCU has a programme to assist the growers with farm inputs and provision of field experts who advise the growers through the cherry fund,” said Makhanu. Peter Arita, a farmer affiliated to Kemera Cooperative Society in Kisii County, differed with Mundia, saying the DSS was working effectively and ensuring transparency in payment.
” The reforms are working well with farmers and call upon the government to increase support to coffee farmers to take more beans into the international market,” said Arita. But Peter Muthoga, an estate farmer in Mathira, Nyeri, accused NKPCU of the delay of remittances of th Cherry Fund to the estate farmers, terming the move as discrimination.
” The Cherry Fund requirement should be relaxed once the payment is made after the sale of the produce at the Nairobi Coffee Exchange (NCE) and can be deducted through the DSS,” said Muthoga.
New KPCU Managing Director Timothy Mirugi said the coffee industry was on the right path based on the friendly reforms initiated by the government.
By April 1, a total of Sh3.8 billion had been disbursed to 313,294 farmers in the 25 counties, added Mirugi.. ” There are procedures to follow as the farmers in the estate category must first be selling or marketing their produce through NKPCU. This is a kitty where the money disbursed should be recovered easily,” said Mirugi.
Mirugi said the cherry fund kitty has disbursed Sh4,254,877,294 to 323,976 farmers in 26 counties.
Chairman of the National Coffee Cooperatives Union (NACCU), Francis Ngone, said the fund has assisted in the coffee production calling on all the farmers to embrace the initiative.
” We need more money to enable better production of the commodity. Kenyan coffee has a stake in the international market, thus for the regulations to be made effective,” said Ngone.