Coffee farmers reject state’s data-for-payments scheme

Coffee berries on a farm in Murang'a

Coffee farmers from Kirinyaga County have cautioned coffee cooperatives against submitting their data to the Ministry of Cooperatives in a bid to frustrate efforts to enforce Direct Settlement Systems payments.

Since 2023, the government has been paying farmers through the DSS, which has been credited with ensuring prompt payments and streamlining coffee sales, and is run through the Co-operative Bank.

But in November last year, the ministry issued a directive that the DSS system will from this year start paying to farmers’ accounts directly as opposed to sending the proceeds to the co-operatives for payment to farmers.

Paying farmers through their co-operative societies enables them to deduct management fees, service any loans taken on behalf of farmers and forward the rest of the money to individual farmers’ accounts.

The change has, however, faced a lot of resistance from the farmers from most coffee-growing counties, who express concerns that the move will kill the strong co-operative movement that has held the sector together for decades.

The farmers, who spoke during their annual general meetings, unanimously opposed the new model, threatening to eject board members if they heed to the directive by the government to forward their personal data without their consent.

 “We don’t want the government to pay us directly. We cannot risk the collapse of our co-operatives that have been supporting us with loans and farm inputs,” Kelvin Macharia from Mirichi cooperative society said.

The co-operative societies assist farmers in acquiring loans against the kilogrammes of coffee delivered from financial institutions by acting as their guarantors.

Further, paying farmers through the M-pesa will make it difficult for them to consolidate the money to support their families, Macharia added.

Mugo Wagikombe from Baragwi Cooperative Society claimed there is a scheme by some government officials and some banks to benefit from the DSS system.

He wondered why the government has persisted in its bid to implement the direct payments despite farmers’ opposition.

Gerald Murango, who is a member of Kabare Cooperative Society, said paying them directly will render many Kenyans working in co-operatives at a time when the government is making efforts to create jobs.

“What will happen to all the loans that are yet to be cleared? Do they expect farmers to forward the funds required to service them to the co-operative after being paid?” he said.

Farmers’ strong opinions on the payments have left their co-operatives’ officials in limbo with the directive expected to be enforced from July 1 this year.

In March, Co-operatives CS Wycliffe Oparanya praised the DSS for facilitating smooth payments and ensuring farmers are paid on time.

Addressing farmers at Ndumberi in Kiambu, Oparanya said that from July, 80 per cent of the proceeds will be going directly to farmers pocket, while 20 per cent will go towards the co-operative societies.

He said when need arises for the co-operatives to deduct anything more than 20 per cent, they will have to write to the ministry detailing reasons why.

"In the reforms that we are implementing, farmers will now be getting their money through their accounts, and the leaders have agreed that this is a good system and the returns have increased," Oparanya said.