The government will take a step further in putting more money in the coffee farmer’s pocket by establishing a public coffee exchange to compete with the privately owned Nairobi Coffee Exchange (NCE), Trade Cabinet secretary Peter Munya has said.
Munya lamented that the NCE operates in an opaque manner adding that acquiring the licenses to sell coffee was difficult and expensive, a fact that disadvantaged many farmers who would wish to sell their own produce.
He said he did not see the sense in forcing farmers to give other people their coffee to sell yet they were the ones who did all the hard work from coffee growing to processing.
“We are going to address the challenges that are killing the coffee sector. We will liberalise the system, that I can assure you,” said Munya.
In the past, coffee stakeholders have expressed fears of collusion, to the detriment of the farmers, at the Nairobi coffee auction accusing it of offering prices much lower than the market rates.
“I think there is collusion among traders, which is intended to deliberately exploit our farmers,” said former Agriculture Principal secretary Richard Lesiyampe last year.
Up to 2013, when its management was placed under an Exchange Management Committee, the NCE was managed by Kenya Coffee Producers and Traders Association.
Munya’s comments come at a time when the government is in the process of liquidating the troubled coffee miller, Kenya Planters Coffee Union (KPCU) over claims of corruption and mismanagement.
“Apart from mismanagement and corruption, the union has also failed to comply with the provisions of the Cooperatives Act on proper management of coffee farmers’ assets, which is why we are liquidating it,” said Munya in August while announcing the rationale for liquidation.
Acting commissioner for Co-operative Development Geoffrey Njang’ombe announced a team of four officials to oversee the liquidation process which will be completed early next year.
Munya was speaking in Nairobi during the release of a study on the competitiveness of Small and Medium Enterprises (SME) in the country.
The study, carried out by the International Trade Center in collaboration with the Kenya National Chamber of Commerce and Industry, paints a good picture of the country’s SMEs in terms of competitiveness.
According to the study, however, 55 per cent of SMEs in the country do not apply for loans due to high interest rates and collateral which are beyond their means.
“They did not apply because they foresaw issues that would prevent them from accessing the loans,” said Valentina Rollo, an economist at the International Trade Centre.
