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Coffee association in turf wars with board over property

By By PAUL WAFULA | September 2nd 2013 at 00:00:00 GMT +0300

By PAUL WAFULA

A coffee farmers association is plotting to kick out their industry regulator from its current premises. The controversy is on grounds that it has continued to protect cartels that siphoned Sh51 billion from their members.

The Standard has also stumbled into a meeting where the executive team of the Kenya Coffee Producers Association (KCPA) was finalising plans to mobilise farmers to start a nationwide boycott of the coffee auction.

The association, which is housed at the same building with the coffee auction, insists it has lost patience with the regulator, the Coffee Board of Kenya (CBK).  It has hit at the regulator for what it terms as existing only to appropriate the one per cent farmers’ contribution on gross coffee sales and contribution towards licences with no service in return. “The building under which CBK is housed is coffee farmers’ property yet it is CBK that is benefiting from the premises and farmers are languishing in poverty,” Mr Michael Gitau, the KCPA chairman told The Standard in an interview.

“It is time for the Kenyan coffee farmers to be given control over the CBK premises. If the CBK has to remain then it should do so only as a tenant and the returns given back to the farmer who built the premises,” Gitau said.

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The association did not however reveal how they plan to throw out the regulator on grounds that it would jeopardise the exercise. 

If it succeeds with this initiative, then this is likely to force the government to consider renting new premises for the industry regulator, currently being headed by Ms Loise Njeru. KCPA’s bid to repossess the building estimated to be over Sh5 billion is the latest twist to the worsening relations between the regulator and the farmers. The CBK is currently being housed at the Coffee Plaza, which is on Nairobi’s Haile Selassie Avenue, the capital of coffee trading in the East Africa.

Coffee auction

KCPA becomes the latest industry association to fall out with the regulator after the Kenya Coffee Producers and Traders Association (KCPTA), which used to run the coffee auction until mid this year, on how the trading floor was being run.

 The auction happens every Tuesday at adjacent premises, the Wakulima Building. KCPA says the regulator has lost its relevance in the coffee sector as farmers do not see the need to have a board that is “toothless and perpetuates their exploitation”.

This comes weeks after this paper exposed how cartels were manipulating prices at the coffee auction, through the first insider audit seen by the press, in a racket that saw farmers lose over Sh51 billion in a major rip-off spanning the last nine years.

 The internal audit of the coffee auction, seen by The Standard, shows that Kenyan farmers lost an average of Sh5.5 billion per year to traders who were largely puppets of a rich coffee buying club run by multinational companies.

For example in 2003, farmers earned Sh6 billion ($71 million), but the true value was at Sh10.4 billion, meaning that about Sh4.4 billion was lost.


Kenya Coffee Producers Association Coffee Board of Kenya CBK Ms Loise Njeru
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