Break cartels ravaging the ailing coffee sector

Reports that cartels in the coffee sector have siphoned Sh27 billion from farmers in the last seven years should set alarm bells ringing all the way to State House.

The hope, which springs eternal in optimists and well-wishers’ hearts, is that President Uhuru Kenyatta will direct officials at the ministry of Agriculture and Livestock to come clean on exactly what is going on in the industry that brings together over 600 co-operative societies, 700,000 members and produce 60 per cent of the country’s total coffee output.

This arises from the recognition that there is a correlation between the wanton acts of drunkenness and criminology recorded in the counties around Mount Kenya region and the continued mismanagement of what used to be the most important cash crop in the area.

This means that any measures taken to deal with these twin challenges will fail unless they are anchored on strategies that give young people a fair return on their investment in money, time and effort. The current strategy of employing the youth on jobs to carry out public works, although commendable as a short-term measure, is not sustainable in the mid-to long-term. A longer-term solution can only be found on land.

This is why the President needs to come down hard on the Ministry of Agriculture officials—most of whom are career civil servants and have been holding their jobs for years-- who should be required to explain to the President and, by extension, the Kenyan public where they were and what they were doing while well-entrenched carpet-beggars were taking coffee farmers to the cleaners.

Any arguments that the officials were not aware of what was going on should be accompanied by letters of resignation for sleeping on the job. For the tragedy is that the fraudulent activities, which were exposed in the Tuesday’s issue of Business Beat, have been going on for over three decades. The signs that all was not well in the sector were captured in the declining coffee production figures to which these officials were privy.

Industry data shows that the crop production declined from a high 128,926 metric tonnes (MT) in the 1987-88 production season to 40,000 MT in 2010-11, the lowest in a decade before recovering slightly to 49,500 MT last year. Industry analysts argue that if the production of the crop continues declining at the current rate, coffee would stop being a significant cash crop export over the next five-to ten years. This suggests that county governments that are drafting legislation that would stop owners of coffee farms from turning their holdings into housing estates are barking up the wrong tree.

Hapless farmers

Instead of interfering with private property in a manner that is injurious to their owners’ financial interests, these counties should join hands with the national government to tackle the problems facing the industry. Incontrovertibly, the streamlining of the marketing function by instituting forensic audits in all the past transactions should be top on this agenda. Any members of cartels who have benefitted from the sweat of farmers should not only be brought to court and jailed, as appropriate, but should also forfeit the property bought with the proceeds of the nefarious activities.

This should be followed by the requirement that co-operative societies be run in a transparent and accountable manner. And the only way to do this is to employ the services of independent auditors to look into the accounts of the more notorious ones. These should, in all instances, lead to the hauling of the perpetrators to court whenever evidence points to fraud. After all, it is the failure to bring such perpetrators to account that has emboldened them to steal so much from the hapless farmers that the latter have abandoned the crop.

Both levels of government should also work in tandem to add value to coffee before it is exported. If this requires the setting up or buying off of marketing companies overseas that should be factored into the country’s budget. And Kenya would not be the first country to travel on this route as India bought a leading British tea sales and marketing company, some time ago, to safeguard the export of its crop. —[email protected]

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