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Why coffee farmers want to stop KPCU from handling Sh3 billion intervention fund

By Nderitu Gichure | April 5th 2020

A section of coffee farmers are seeking to stop the government’s Sh3 billion shot in the arm to the sector from being advanced through the New Kenya Planters’ Co-operative Union (KPCU).

With courts already issuing temporary orders against disbursement of the fund, the process to inject the much needed capital and incentive to farmers now hangs in the balance.

Although the measures announced by President Uhuru Kenyatta at the beginning of the year were meant to cushion the farmers against the unpredictable market forces, a section of farmers are challenging the mode of disbursement of the funds over fears that the process is being rushed.

There were plans for farmers to get advance payment from the Government in July under the Sh3 billion revolving fund to cover harvesting cost of the coffee beans.

In their petition filed at the High Court, the farmers want the process spelt out to ensure they benefit from the windfall.

They argue that the money should have been channelled through the commodity fund and not the union, noting that an apex cooperative, KPCU was under receivership.

“By mimicking the said name smacks of an attempt by the national government to sneak back and retain a devolved function,” the petitioner observed.

According to Regulations 7 of (Public Finance Management Coffee Cherry Advance Revolving Fund) 2019 the farmers said, KPCU, a private company and a player in the production chain is outsourced to manage the fund. “Entrusting the fund to the union, a state corporation will compromise accountability as the giver and receiver are both one and the same person,” Wasilwa laments.

They further aver that coffee growers were not represented and will not participate in the deliberations by the new union.

By limiting access to the fund to farmers only affiliated to KPCU, they argue regulation 9 would curtail farmer’s freedom of choice, thereby amounting to monopoly and stifling competition.

“Leaving development procedures for disbursing the funds in the hands of KPCU is against fair and reasonable administrative procedures,” the petitioners stated.

Establishing parallel rival entity instead of riding on the existing one, Wafubwa said the Treasury Cabinet Secretary duplicated, overlapped and mimicked commodity fund.

“The fund is not being set in consultation with interested party, therefore violates the constitution,” the petitioner stated.

This, the farmers added will bypass cooperatives and thus advance money not based on records or history of individual growers. Farmers who have gone to court include Shadrack Wasilla, Jamin Cheptorus, Tom Wanambisi, Alex Wafubwa, Samson Kamarich and Johnson Akunga.                        

“Advancing money directly to individual growers other than cooperatives will open floodgates to ready cash, thereby exacerbating cheery hawking and theft,” Wafubwa explained.

He said the move was also likely to edge out cooperatives, marketing agent, financial institutions, Saccos and Commodity fund who actually fund coffee production from weeding to marketing.

They further accuse the Treasury Cabinet Secretary of issuing Gazette notice supplement No, 72, of December 27, publishing (Public Finance Management Coffee Cherry Advance Revolving Fund) regulations 2019 with a view to administer the fund.

“When Parliament in 2019/20 budget and eventually appropriated the money, we expected the same to be channeled through the commodity fund,” the farmer in their affidavits says.

To their dismay, Wasilwa avers, the Treasury CS purported to establish a new fund known as cherry fund.

“We are aggrieved by the PMF regulations proposing to en-route the fund away from commodity fund and its line Ministry of Agriculture to National Treasury,” Wasilwa explains.

On Friday last week Justice John Makau in Nairobi stayed licensing of KPCU as a miller or marketing agent or using the name or infrastructure of the defunct, organisation by Agriculture and Food Authority (AFA). He also restrained Treasury CS, Agriculture CS, AFA and New KPCU’ from gazetting , implementing, or in any way operationalising the impugned Public finance management coffee cherry advance  revolving  fund  regulation 2019.


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