The nation's coffee production will drop to its lowest since independence as effects of drought and the scale-down of crop husbandry by farmers due to low returns bites.
The annual forecast by US Department of Agriculture (USDA) shows the country’s total production for 2019/20 will hit 650,000 bags of 60 kilogrammes each compared to 750,000 bags this year, a 13.3 per cent drop.
Consequently, the country’s total distribution is expected to decline to a historic low of 830,000 bags compared to 910,000 in 2018/19.
Coffee stocks, which in Kenya are held by millers, agents, and exporters will also slump to a record low of 105,000 bags, 40,000 bags lower compared to this year.
According to the report, the size of coffee farms continues to decrease due to inheritance driven sub-division.
Kenya has two distinct harvest seasons in a year (September-December and March –July), each of which peaks for less than two months. According to the report, 20 per cent of coffee mills are currently operating at their lowest levels.
"Government’s efforts to promote smallholder coffee production in non-traditional growing areas is countered by a surge in housing developments on farms located in peri-urban areas, leading to an overall stagnation of total coffee production,’’ USDA said.
The sector is also losing competitiveness due to other factors such as increasing cost of labour and inputs, high incidences of pests and diseases and poor governance of marketing cooperatives.
Kenya’s earnings from coffee last month dropped Sh2.8 billion or more than 23 per cent compared with a similar period in 2018 as low international prices continue to hit farmers’ earnings.
Data by the Coffee Directorate indicates farmers earned Sh9.04 billion last month, against Sh11.8 billion realised in the same period last year.
The report has faulted Kenya’s poor marketing structure where farmers shoulder losses right from the firm to the market.
Under Kenya’s coffee sector rules, a batch of coffee belongs to a farmer up to and until an exporter buys it. A Kenyan coffee farmer therefore not only bears production risks, but also post-farm risks such as quality deterioration, pilferage and theft, and exchange rate volatility,’’ the report said.
Gatundu South MP Moses Kuria is fronting Crops Amendment Bill that all coffee grown in Kenya undergo processing, production and packaging locally to improve earnings for farmers.
If it sails through, the law will lock out international buyers and large global coffee shops that buy a lot of semi-processed beans.
Speaking during the launch of state capture report by Africog last week, economist David Ndii termed value addition of coffee by farmers costly and unsustainable.
