Coffee farmers to receive centralised payments in landmark sector reforms

Cooperatives and MSMEs Cabinet Secretary Wycliffe Oparanya during the launch of the new coffee factory in Bungoma, on April 15, 2025. [Juliet Omelo, Standard]

Starting July, coffee farmers across Kenya will begin receiving payments through a centralized system managed by Cooperative Bank.

The new payment structure is part of sweeping government reforms designed to enhance transparency and eliminate corruption in the coffee sector.

Speaking in Bungoma on Thursday during the launch of a new coffee factory, Cooperatives and MSMEs Cabinet Secretary Wycliffe Oparanya, said the initiative is a critical step toward safeguarding farmers' earnings and improving service delivery.

"Coffee farmers have long been exploited by dishonest individuals within cooperative societies," Oparanya said.

"By channeling payments through Co-operative Bank, we aim to close those loopholes and ensure that farmers receive what they truly deserve," he added.

Under the new model, farmers will be paid Sh40 per kilogramme of coffee delivered to their societies.

Of this amount, 80 per cent will go directly to the farmers, while 20 per cent will be retained by the cooperative society for operational expenses or community development projects. Any surplus may be distributed to farmers as bonuses.

Oparanya urged coffee growers to open accounts with Co-operative Bank to facilitate timely and accurate payments.

The CS revealed that the government is in discussions with Kenya Commercial Bank (KCB) and Family Bank to broaden financial access and ensure inclusion across all regions.

"We want to eliminate any barriers to payment and ensure all farmers, regardless of location, can access the services they need," he said.

Oparanya called on farmers to boost their productivity to meet increasing global demand for Kenyan coffee. He emphasized the need to engage the youth in coffee farming to sustain the industry's future.

"We're seeing a major opportunity in global markets. But to fully tap into it, we must ensure young people are engaged and skilled in coffee farming," he said.

The CS announced plans to upgrade a coffee milling facility in Bungoma, enabling full-cycle processing locally.

The move aims to reduce the high costs associated with exporting unprocessed coffee and importing it back as a finished product.

"It doesn't make sense for us to grow the coffee, export it raw, and then buy it back at triple the cost once it's processed abroad," he said.

"With a modern milling machine in Bungoma, we can add value right here and increase our earnings."

The government is also targeting long-standing cartels that have stifled the coffee industry. Oparanya stated that all coffee societies will soon be required to elect new, accountable leadership to better represent farmers' interests.

Present at the launch event were Bungoma Deputy Governor Jenipher Mbatiany, Senator Wafula Wakoli, and former Governor Wycliffe Wangamati, among other local leaders.