There has been talk of faceless puppeteers who have gamed the intricate coffee system of production and sale.
Cartels have been blamed for holding the industry in their thrall. Stakeholders hope that intractable problems will soon be resolved over a cup of coffee.
Coffee has been grown as a cash crop in Kenya from the 1900s. Statistics from the Coffee Year Book 2021-2022 reveal that it is the fifth largest foreign exchange earner contributing 0.2 per cent of Kenya’s GDP. It is also the mainstay of 1.5 million households in the country, mostly in rural areas. Stakeholders in the coffee industry include individual farmers, farmers’ organisations, millers, warehousemen, marketers and coffee buyers.
Coffee in the country is grown by smallholder farmers and estates. Upon harvesting, coffee cherries undergo two processes: Wet milling which is the removal of the outer skin and pulp and dry milling which removes the parchment from the beans. The green beans are then graded, sorted and packaged for export.
This article does not propose solutions to all the challenges facing the coffee industry but merely points out some facts. Some of these facts may be inconvenient truths. For starters, some of the so-called 'cartels' are actually big buyers with a global footprint. That they control the industry is by dint of trusted supply chains built over decades. These big buyers have an established chain of custody that tracks the sourcing, production, processing, shipping and retailing of coffee at every stage. Moreover, they have certifications that prove their exports are ethically and socially acceptable. New entrants into the buyer markets would be constrained to meet these standards.
Second, beyond dry milling, there is little more that can be done in terms of value addition. It has been suggested that Kenyan coffee should be roasted and branded before being shipped overseas. However, the delicate nature of coffee does not lend itself to this suggestion. This is because roasted coffee has a limited shelf life and begins to deteriorate after the process. Further, different roasters overseas have preferred roasting techniques that produce their own distinct flavours and aromas.
Third, coffee in Kenya is not your cup of Joe. It is not a poor man’s drink but an elitist pastime favoured by the well-heeled. The Coffee Year Book puts domestic consumption at a paltry 3 per cent of national production. That means 97 per cent of the 50,000 metric tonnes Kenya produces is exported. The country therefore cannot withhold its coffee from the global market as leverage for better prices. Unlike Ethiopia that consumes 53 per cent of what it produces, there would be no domestic uptake in Kenya.
Finally, there are two ways to increase farmer earnings. The first is to commoditise Kenyan coffee. This would entail increasing the acreage under coffee, currently in serious competition with other investments like real estate. The second is to grow specialty coffee with desirable characteristics like physical density, vibrant acidity, intense cup profile and distinctive aromatics. This would fetch higher prices than the usual green beans. One hopes that those fixing the coffee industry are cognisant of these facts. Or maybe they should wake up and smell the coffee!
-Mr Khafafa is a public policy analyst