Coffee consumers set for steep prices
By Macharia Kamau | October 16th 2020
The price of your favourite cup of coffee could in the coming months go up as consumer levies scrapped nearly a decade ago are reintroduced.
In new proposals, the Ministry of Agriculture wants to return the levies, arguing they are critical in supporting crucial functions such as research, marketing and rural roads in coffee farming areas.
The charges are contained in the Coffee Bill, 2020 that the ministry is now subjecting to public participation.
Among them are a two per cent ad valorem levy on gross sales, which will be remitted to the Coffee Research Institute to support research and a four per cent import levy that will be remitted to the Coffee Board of Kenya for marketing.
There will also be a two per cent buyers’ levy to be shared by the board’s regulatory function (one per cent) and coffee-growing counties (one per cent) to support the crop’s development.
“The Bill will reintroduce levies, and I know this is one of the issues that might be politicised,” said Agriculture Cabinet Secretary Peter Munya yesterday.
“These levies are on the consumer and not the farmer. When the coffee is being sold, there will be an additional levy that the buyer pays. It has nothing to do with reducing the earnings of the farmers,” the CS said.
Munya said the levies will support areas such as research, which were neglected after the levies were scrapped.
“The levies were there before and helped in supporting research and infrastructure. When they were removed, most of the institutions collapsed. It also did not translate to any earnings for farmers,” he said.
“The story that was sold then was that these levies were a burden to farmers. It was not true. If anything, they were good for farmers because they helped do the roads, research and produce good seedlings.”
Munya spoke when he launched five Bills that are aimed at introducing major reforms in the sector.
“The sector has been receding badly. The production per tree has been going down, The acreage has also gone down,” the CS said.
“These reforms are intended to spur back the sector and give confidence to the farmer to continue investing in the crop,”he said.
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