Ray of hope as coffee marketing model doubles farmers' earnings

African Coffee Roasters MD Paul David Videbaek (right) and Helene Rasmussen (2nd left) sample a coffee bush at Witima Village in Othaya. Coffee farmers are harvesting more profits under a new marketing model that links them directly to consumers. (PHOTO: KIBATA KIHU/ STANDARD)

Coffee farmers are harvesting more profits under a new marketing model that links them directly to consumers.

The model effectively eliminates one of the biggest stumbling blocks between coffee farmers and good profits - middlemen and brokers.

In the model, several consumer organisations in Europe have partnered with local coffee farmers through their societies in a project aimed at boosting yield, quality and facilitating direct sale of the produce in international markets.

The  model is currently being tested with the giant Othaya Farmers’ Co-operative Society in Central Kenya, before being rolled out to other coffee societies.

Once rolled out, it will see European and American coffee consumers directly involved in the production and marketing of Kenyan coffee, this way reducing the role of middlemen in the trade.

With the the coffee sector reeling from a myriad of challenges, farmers are now putting their faith in the model.

Farmer's schools

Already, three Danish consumer organisations have partnered with Othaya farmers’ co-operative society to sponsor farmers’ field schools (FFS) to address the steady decline in production of the commodity.

African Coffee Roasters (ACR), a subsidiary of COOP Denmark, Peter Carsen Kaffe and Just Fair are among organisations sponsoring the project dubbed “Coffee for Better Future”.

ACR managing director Poul David Videbaek said the main focus of the project was to boost production quality and ensure better prices through promotion of direct coffee sales in international markets.

Speaking at one of the FFS in Othaya, Nyeri County, Videbaek said the move would link coffee consumers and producers directly in the coffee value chain.

“We saw the need to get closer to farmers after realising they were facing numerous challenges in marketing and production,” the MD explained.

He said partnering with coffee societies as opposed to individual farmers was informed by the need to bring on board as many farmers as possible.

“The rationale behind working within a framework of a co-operative model was to benefit many by fetching better prices and ensuring a wider reach to many,” he said.

Once the demand for coffee increases and the model proves successful,  the project will be rolled out to more coffee-producing counties.

Faster payments

ACR has invested in coffee value addition at a factory based at the Export Processing Zone (EPZ) with a capacity to process 2,000 tons of roasted coffee per year.

“We pay the farmers a higher price, pay faster because they deliver directly to us and all profits to ACR are shared and distributed evenly,”said the MD.

The firm was created as a partnership between a retail chain- COOP Denmark- and a Danish investment firm.

“Having realised that most of the money is lost between the producer and the consumer by intermediaries and middle men, we decided it was time for us to engage ourselves in making coffee production profitable for producers while at the same time enabling us to make innovative products for our consumers,” said the MD.

And local farmers are enthusiastic about new model.

According to Othaya Farmers’ Cooperative Society chairman James Nderitu, over 60 per cent of  coffee produced since the project started in 2011 has been sold directly to European markets as opposed to the normal coffee auctions.

“This year alone the company bought coffee 400 bags worth over Sh10 million from the society, which has over 15,000 members, making them earn more than they would have received through the auction,” he said.

Raised expectations

As a result of the partnership, the society with over 17 factories, has managed to increase the premium grades of coffee like AA ,AB , PB which are mostly for export.

A coffee farmer, Peter Kibathi, says marketing their produce through consumers organisations has raised their expectations of realising better payment.

“We are now earning an average of Sh60 per kilogram of cherry from Sh30 in 2011, some factories earn between Sh79 and Sh80 per kilo,” he said.

The model enables farmers to work with the next generation of global coffee consumers to increase production while retaining quality.