More than 80,000 coffee farmers will next week receive payments for last month’s produce after a bank allocated Sh200 million.
The prompt cash payment is part of reforms being implemented to improve the sub-sector, where farmers have suffered long wait for payments.
A total of 47 coffee cooperative societies in Meru are expected to receive payments for their April deliveries from next week, at Sh20 per kilogramme of cherry.
On Wednesday, Cooperative Bank Managing Director Gideon Muriuki and Meru Governor Kiraitu Murungi, launched the cash model that will save farmers' long waiting for payments for cherries delivered.
Dr Muriuki said the bank had committed an initial capital of Sh200 million to make the model, which was borrowed from Ethiopia where farmers enjoy the advantage of prompt payments, successful.
The Government is piloting the system in Meru and it is hoped it will save millions of farmers the trouble and challenges of delayed payments.
“This model is important for Kenya. I have no doubt if this works in Meru then other counties will replicate it for the benefit of coffee farmers. The national Government is eager to see how it is implemented,” Muriuki said.
Addressing farmers and officials of coffee societies, Muriuki said the system of disbursing payments to farmers had been meticulously studied and found to be watertight.
He said the bank had initially been worried on how the money would reach the intended beneficiaries, but they were now convinced that implementing the model would be smooth.
“We agreed to support the cash model. This cash model must succeed,” he said.
Governor Kiraitu and County Co-operatives and Trade Executive Maingi Mugambi said the new model is what the farmers need as motivation to increase production.
“This model will see our farmers receive payment for their produce within a month,” said the governor.