In a significant move to propel its renowned coffee industry to new heights, Kenya has unleashed a financial infusion of Kes 6 billion (US$37.72M) dedicated to bolstering coffee farming. The funds will be channeled into the Coffee Cherry Advance Revolving Fund and production, promising not only a financial uplift but a comprehensive revitalization of the entire coffee sub-sector.
Strategic Distribution for Nationwide Impact
Government spokesperson Isaac Mwaura confirmed the commencement of fund distribution on January 8 in Makueni County, signaling the initiation of a nationwide rollout encompassing all 37 coffee-producing counties. This strategic allocation aligns seamlessly with the government’s steadfast commitment to ushering in transformative reforms within the coffee industry.
Mwaura stated, “Recognizing the pivotal role of coffee in our economic growth and its significant support to over 5 million Kenyans involved in the whole coffee value chain, we’ve undertaken strategic initiatives to enhance production.”
Ensuring a Thriving Future for Coffee Farmers
A key objective of this financial injection is to guarantee a minimum return of Kes 80 (US$0.50) per kilo, a notable increase from the previous Kes 60 (US$0.38). This enhanced return not only serves as an acknowledgment of the invaluable contribution of coffee farmers but also incentivizes increased productivity.
Reforms Bearing Fruits: A Testament to Success
Kenya’s Deputy President, Rigathi Gachagua, emphasized that the coffee sector’s recent reforms are yielding tangible results. The successful implementation of license separation for milling, brokerage/marketing, and buying of coffee has eradicated long-standing conflicts of interest among industry players. Despite initial opposition, players returned to the National Coffee Exchange (NCE), contributing to a remarkable surge in produce sold and improved average prices.
Nairobi Coffee Exchange provisional results revealed a substantial increase in produce sales to Kes 824 million (US$5.19M), compared to Kes 54.8 million (US$345,196) five months ago. Average prices rose to US$194.22 (Kes 29,909.88), and the number of bags traded reached a record-breaking 23,167.
Enhanced Transparency for Farmers
Gachagua highlighted the positive impact of transitioning to the Direct Settlement System (DSS), bringing transparency to the entire coffee value chain. Farmers are now actively involved in the process, a significant departure from the opaque operations of the previous system.
Towards a Transparent Future: Supervision by Capital Markets Authority
As part of broader reforms, the Nairobi Coffee Exchange is set to fall under the supervision of the Capital Markets Authority. This move aims to improve farmer incomes and bring transparency to coffee trading, aligning with Kenya’s overarching coffee reform agenda, including the transition to The Coffee Exchange.
In summary, Kenya’s monumental investment of US$37.72M stands as a beacon of hope for the coffee sector, ushering in a new era of prosperity, transparency, and sustainable growth. This strategic move not only acknowledges the industry’s vital role in the nation’s economic fabric but also paves the way for a future where coffee farmers thrive, and Kenya continues to be a global coffee powerhouse.