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Coffee farmers almost double pay on first ever direct export

They will get Sh116 per kg of Cherry exported to Korea compared to an average of Sh76 fetched at the local auction.

In Summary
  • Last month, Kipkelion Coffee Co-operative Society become the first farmers body to export coffee without going through brokers.
  • It draws members from Bomet, Kericho and Nandi counties
Farmer Samuel Kariuki at his coffee farm in Karuri village, Gatundu North.
Farmer Samuel Kariuki at his coffee farm in Karuri village, Gatundu North.
Image: John Kamau

Coffee farmers aligned to Kipkelion Coffee Co-operative Society will be paid Sh116 per kilo after directly exporting grains without going through brokers. 

Last month, the farmers union flagged off seven-grain containers to South Korea as part of the ongoing reforms in the sector to ensure farmers maximise their profits. 

In a statement, Kipkelion Brokerage Company owned by the society Samuel Marindany said they successfully exported a total of 134.4 metric tonnes of coffee valued at $908,160 (Sh103.5 million).

He added that proceeds from the sale are going towards payment of 9,582 small-scale farmers spread across Kericho, Nandi and Bomet counties at an average rate of Sh116 per kg of Cherry compared to an average of Sh76 which the same coffee fetched at the local auction.

This is a historic achievement for small-scale coffee farmers across the country as they are going to earn a clear  Sh43 above the local prices (56 per cent more).

He added that it is a clear demonstration that given an opportunity and with support, farmers have the potential to rise up to the occasion and produce, mill, meet export requirements, negotiate and export coffee across the entire globe.

This is the first time in Kenya’s history, smallholder coffee farmers have done a complete vertical integration of the coffee value chain, displacing intermediaries who have denied them direct access to the market.

Marindany thanked President Uhuru Kenyatta for facilitating the implementation of farmer-centric coffee reforms that have vested the proprietary interest over coffee to the farmers.

The export deal was sealed in July last year during the Coffee Expo held in Seoul that saw a number of farmers drawn from several coffee cooperatives interact directly with South Korean importers. 

Last year, Kenya renewed the cordial bilateral relations with South Korea after a three year-standoff, facilitating for negotiation of tariffs reduction, especially on coffee.

The Capital Markets (Coffee Exchange) Regulations, 2020 allows coffee farmers to own brokerage firms to directly sell their harvest.

Initially, farmers were forced to go through independent brokers. 

The new law has pitted a contest between the Capital Market Authority (CMA) and the Ministry of Agriculture.

The CMA claims that the law gives it the mandate to regulate the coffee sector, following the amendment of the capital Markets Act last year, while Agriculture CS Peter Munya has insisted the function vests with the Agriculture and Food Authority since changes were not made to the Crops Act.

Last month, CMA issued full licenses to Mt Elgon Coffee Marketing Agency Limited and United Eastern Kenya Coffee Marketing Company Limited in line with the Capital Markets (Coffee Exchange) Regulations, 2020.

This now brings to five the number of coffee marketers that have fully been licensed to trade under the new regulations at the NSE.