- According to the Bill, the coffee fund will be anchored on the Enterprise Development Fund.
- The Bill has also put in place strict borrowing restrictions for factories and societies to cushion the coffee farmer from the perennial debt crisis.
Image: EUTYCAS MUCHIRI
The Nyeri county assembly has passed a bill to salvage the ailing coffee subsector.
The Nyeri Coffee Bill, 2022, sponsored by the Agriculture committee chairman Muriithi Ndagita, seeks to align some of the provisions of the Coffee Bill, 2020, with the recommendations from coffee farmers at the county level.
Ndagita said the Bill will provide guidelines on how the county can support coffee farmers to increase coffee production.
“Most of the coffee issues are being addressed at the national level, so what the Bill does is to align some of the crucial recommendations with the demands of coffee growers at the local level," Ndagita said.
"We have previously seen the county supporting other sectors in the agriculture value chain, while the coffee sub-sector has remained neglected and this Bill tries to address that.”
Provisions of the Bill, which is awaiting the governor’s assent, propose the creation of a Coffee Development Fund, which will offer affordable loans to coffee farmers through the coffee societies.
According to the Bill, the coffee fund will be anchored on the Enterprise Development Fund.
The EDF was established by the county to offer affordable credit to businesses.
“We have proposed an initial capital of Sh100 million in 2022-23 budget to go towards the coffee development fund. We have also proposed that an additional Sh50 million be added to the kitty in every financial year," Ndagita said.
"The loans will attract a five per cent interest rate and the security will be coffee and not the coffee factory’s assets as has been the case in the past.”
The Bill has also put in place strict borrowing restrictions for factories and societies to cushion the coffee farmer from the perennial debt crisis.
The Bill further says the Agriculture executive shall regulate and oversee borrowing by coffee factories and societies from banks and any other financial institutions.
It also prohibits the factory management from using any of a farmer's assets, which include factory and society land, title deeds, machinery and equipment as collateral.
Ndagita said this will cushion farmers from some of the unnecessary loan repayments that farmers are subjected to by factory management.
“Borrowing shall be within the 20 per cent operational cost of the factory," reads the Bill.
"A coffee co-operative society shall at all times notify the department before taking any loans or borrowing money from a bank, financial institution or an individual.
"The notification shall be in writing, explaining the purpose of the loan."
During the debate that preceded the passing of the Bill, Nyeri MCAs supported provisions on the Bill which outlaw hawking of coffee.
The Bill says coffee hawking attracts a Sh7 million fine. Further, proceeds from the confiscated coffee will go towards the Coffee Development Fund.
Once signed into an Act, the Bill will allow Nyeri farmers to market their coffee in one pool.
There are proposals for the formation of the Nyeri Coffee Union, which will act as the official Nyeri county coffee marketing entity.
The union, according to the Bill, will draw its membership from coffee societies and will be registered with the Coffee Market Authority.
Members of the union will act as the chief marketing agents who will source a market for Nyeri’s coffee.
Ndagita said this will help wipe out the middle men and, in turn, increase the proceeds that get to the coffee grower.
(edited by Amol Awuor)