By NICHOLAS WAITATHU
Coffee stakeholders are working on strategies to enhance the industry competitiveness by expanding the market share locally and internationally.
The key strategy involves merging of primary coffee societies into giant cooperative institutions, which farmers can use as a platform to lobby for good prices and enhance their representation locally and internationally.
The new thinking is informed by the need for farmers to benefit out of economies of scale, as well as increasing production, which currently stands at its lowest level since 1987/88 coffee year.
Currently, Kenya is producing less than one per cent of the total global coffee output, accounting for 700,000 bags compared to Colombia, which produces over 12 million bags of coffee every year.
Coffee Board of Kenya (CBK) is rallying industry players by encouraging farmers to form strong cooperatives to cash in from opportunities along the industry’s value chain.
CBK managing director Loise Njeru reckons that since 1950s, farmers in the country have only been involved in the production of the crop, but are excluded from other stages in the value chain.
She contends that farmers are only involved at the farm level, but once the beans are processed for the first time in the factories, the produce is taken over by other players who carry out milling, roasting and marketing and in the process profiting from the value addition.
“This trend has denied farmers ownership of the crop from the farm to market, hence giving the big boys leeway to determine direction the industry,” she said.
She noted that the country’s coffee farming area has decreased over the years to 110,000 hectares, up from 150,000 hectares. In an interview this week with Weekend Business, Njeru averred that for long time, small-scale farmers in the country have been forced to operate from the periphery, while individuals and organisations with vested interests do a great percentage of work.
She largely attributed the low acreage of coffee to switching of some coffee plantations to real estates, especially in Kiambu, Murang’a and massive subdivision of land owing to population growth.
Njeru blames the woes facing the sub-sector to liberalisation of the agriculture sector in 1990s, which promoted coffee grower to split giant coffee societies into unviable societies.
This, she reckons, has led to decline in coffee production, from 129,000 tonnes in 1987/88 coffee production year to the current output level of 36,000 tonnes, which is far below the country endowed potential of over 300,000 metric tonnes every year.
According Njeru, currently Kenya sells most of her coffee to Europe, but CBK is now seeking partners for joint ventures in coffee processing, as part of the strategy to shift away from traditional markets to trade with faster growing markets in Asia and Africa.
The board, she reckons, hopes to get partners to help the country expand its processing and packaging capacity to improve export of processed coffee to emerging foreign coffee markets.
It is considered that this approach would help insulate Kenya producers from the price volatility being experienced on global coffee bean markets.
“At present, access to appropriate machinery is one of the major challenges facing Kenya enterprises… limiting most of the local business people to being export brokers of the raw produce.”
The latest initiative, she says, is to turn Kenya into a global coffee hub, particularly as it would help access the rapidly expanding emerging coffee markets. As part of this strategy, the State is rolling out plans to promote growing of robusta coffee in non-traditional coffee growing areas to generate volumes of robusta coffee sufficient to justify investments in processing of instant coffee, a demand for that is seen growing globally.
Meanwhile, the Coffee Research Foundation has identified new potential areas for coffee production in response to climate change and changes in land use in peri-urban areas.