•Munya accused coffee co-operative societies' officials of colluding with banks to deny farmers the chance to apply for the low-interest cherry fund.
•He warned that those who will not sign and submit application forms filled by farmers in two weeks will be disbanded.
Image: Alice Waithera
Agriculture Cabinet Secretary Peter Munya has warned coffee co-operative Societies managers who refuse to sign Cherry Fund application forms submitted by farmers.
Munya has said many co-operative societies’ managers have been colluding with financial institutions to subject farmers to high-interest loans even after the low-interest Cherry Advance Revolving Fund was made available.
The CS said when the government formed the Sh3 billion kitty, he called a meeting with all societies’ officials to sensitise them on the fund and asked them to reach out to their members and inform them about it.
But many have failed to talk to their members on the fund because they are in cohort with financial institutions and want them to continue lending money to farmers.
The CS however said co-operative societies that are holding application forms filled by farmers have only two weeks to sign them and submit them to new KPCU through which the funds are issued, failure to which their committees will be disbanded.
“We will do away with them all and farmers will elect new officials because we cannot allow them to continue being barriers to farmers’ empowerment yet the banks they support are only out to make profits,” the CS said.
The kitty loans funds to farmers at 40 per cent of the value of the coffee sold and charges an interest of three per cent, and the money is set direct to an individual farmer’s bank account.
He said the President formed the kitty to save farmers from advance loans taken due to delayed coffee payments.
The newly-revived KPCU has also seen farmers earning over Sh100 per kilogramme of coffee, a sharp increase from the payments farmers received from their coffee Unions.
In Meru, Munya said Nchege coffee factory has been able to pay Sh101 per kilogram as opposed to the Sh34 it last received from its union.
Through new KPCU, Munya added that Nduruma factory also paid Sh93.60 while Mbaraga paid Sh78.30.
“This shows it is possible for farmers to earn over Sh100 per kilogramme if we are able to do away with brokers and deal with the farmers directly,” he said.
Munya further accused co-operative societies of working with millers to lower the grade of coffee so as to pay farmers minimal prices.
He said factories from Meru region that have sold their coffee to KPCU has seen 70 to 80 per cent of their coffee magically improve from grade C to grade AA and AD, which fetch significantly higher prices.
Milling losses have also reduced from 24 per cent to 17 per cent, he said, further improving farmers’ pay.
The CS, who was addressing farmers in Kigumo on Saturday, said the new Coffee Bill will address all the loopholes exploited by cartels to exploit farmers and bring transparency in the factories and the marketing of coffee.
The new law will revive the Coffee Board that will manage the sector that is currently under the Agriculture and Food Authority (AFA).
It will also fund the Research Foundation that has its offices in Ruiru that will research on coffee diseases, seeds and soil topography to help boost production.
The Nairobi Coffee Exchange that has now been reduced to a coffee buyers’ club will also be streamlined, Munya said.
“Currently, the millers are also the marketers and the buyers, and collude to manipulate the prices of coffee and even buy the commodity in turns,” he said, adding that the law will also separate milling and marketing functions.