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Blow to Munya as MPs annul views on proposed coffee law

He want Ministry of Agriculture to control coffee trade and not CMA

In Summary
  • The Bill expected to mandate the coffee board to license coffee marketers and brokers
  • The Nairobi Coffee Exchange is currently in charge of coffee trade and licencing of brokers
Agriculture CS Peter Munya at Kinoro tea factory
Agriculture CS Peter Munya at Kinoro tea factory
Image: Dennis Dibondo

The Ministry of Agriculture has suffered a blow in a bid to control the marketing and trading of coffee in the country after Parliament squashed the proposed Coffee Bill. 

On December 1, the Parliamentary Committee on Agriculture declared recommendations on the Crops (Coffee) Amendment Regulations, 2021 as null and void, citing breach of laid down procedure. 

Among the recommendations in the proposed law was the plan to transform the coffee directorate currently under the Agriculture and Food Authority to the former Coffee Board of Kenya and have it operate as an independent entity.

The Bill expected to mandate the board to license coffee marketers and brokers, a role currently played by the Nairobi Coffee Exchange (NCE) which is under the Capital Market Authority (CMA).

The tag of war on who is supposed to control the coffee trade has at some point led to a bitter exchange of worlds between the two entities, with the Cabinet Secretary Agriculture Peter Munya accusing CMA of overstepping its mandate. 

In June, CMA extended licenses for marketing agent who had been licensed under the previous regime but has not submitted their application for licensing and intend to continue trading for three months.

This did not auger well with Munya who extended those licenses by a year to June 30, 2022.  

“Why should we have CMA doing something on coffee and the coffee board is also doing the same. Why do you want to split the mandate especially when you are giving it to an institution that is not properly prepared in terms of technical capacity to license?” Munya said.

Early this month, the Parliament annulled in totality recommendations to the proposed law tabled in Parliament in June, citing non-compliance with the law.

“Having examined the Crops (Coffee) Amendment Regulations 2021, the Committee recommends that the House annuls in entirety the said statutory instrument for non-compliance with the law,” read a statement from the chair of the committee, William Kassait.

The Kassait led team highlighted a mismatch in public participation lists, as the attendance lists reflect that the public participation was conducted in 2018 before the principal legislations were approved in 2019.

The Parliamentary Committee on Agriculture said that there was no evidence that a regulatory impact assessment was conducted on the amendment of the regulations.

“The regulations are inconsistent with Section 40 of the Crops Act, which requires the Cabinet Secretary while making regulations to do it in consultation with the Agriculture and food authority and the county governments,” the statement read.

Meanwhile, a coffee broker, the United Eastern Coffee Marketing Company want the Nairobi Coffee Exchange to hand it with a trading code after the parliament annulled the proposed coffee amendment regulations.

 In a statement, the coffee broker said the legal notice that barred NCE to grant its operational license as envisaged in the Capital Markets Act was now null and void.

''We, therefore, request the NCE to issue us with Lots and Range and Brokers code as legal Notice 104 which was supporting your response has been declared null and void as per the report by the National Assembly on consideration of the Coffee Amendment Regulations, 2021 dated December 1,'' ECMC said. 

The firm is among four brokers whose provisional licenses were extended granted by a further three months from September 30, in line with the Capital Markets (Coffee Exchange) Regulations, 2020.

Company Limited, Murang’a County Coffee Dealers y, Mt. Elgon Coffee Marketing Agency Limited and United Eastern Kenya Coffee Marketing Company had been granted conditional licenses in June 2021 and were expected to be in full compliance within three months.