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Coffee farmers fear return of cartels through proposed rules

BUSINESS
By Patrick Alushula | Apr 20th 2022 | 2 min read
By Patrick Alushula | April 20th 2022
BUSINESS
Ripe coffee cherries. [Christopher Kipsang, Standard]

Coffee farmers are opposing proposed regulatory changes seeking to bar them from direct sale of their produce, terming it an attempt to bring back cartels.

The farmers, through the National Coffee Co-operative Union (Naccu), want the proposed Crops (General) (Amendment) Regulations 2022 struck out.

Naccu said in a statement released Tuesday that the proposed changes will weaken the Crops (Coffee General) Regulations, 2019 and the Capital Markets (Coffee Exchange) Regulations, 2020, marking a return of cartels to the sub-sector.

The proposed regulations, for instance, seek to introduce new entities called grower marketers to carry out the milling and marketing growers’ coffee.

Naccu said this will lock out coffee farmers from marketing their own crop unless they get another licence for marketing, which will lead to increased costs.

“This is likely to lead to re-introducing cartel-like behaviour leading to exploitation of coffee growers, a situation which the ongoing reforms are attempting to alleviate,” said Naccu Chairman Francis Ngone in the statement.

“From a practical perspective, growers will have no say in the price discovery process under this arrangement."

Naccu officials on Tuesday alleged they had been locked out of a public consultative meeting that was chaired by Agriculture CS Peter Munya to collect views on the controversial regulations.

Mr Ngone told The Standard a section of farmers and Naccu officials were locked out on grounds that the meeting was by invitation only.

He accused Mr Munya of pushing for the regulations yet Parliament had rejected most of the proposals.

"We went to Parliament and stopped it by just giving our views. He (Munya) followed us in our unions and we told him we are ready to discuss and reach a consensus.

"Instead they issued a gazette notice calling for this meeting."

Naccu said the proposed changes mark a “complete about-turn” to the recommendations of the national task force on coffee sub-sector reforms, which was appointed by President Uhuru Kenyatta in 2016.

Mr Munya has been at loggerheads with farmers and Parliament, with the Senate Committee on Agriculture last year accusing him of frustrating coffee reforms.

The coffee reforms had opened the way for growers to command the value chain, including selling their own coffee either directly or through the Nairobi Coffee Exchange without the requirement of additional marketing licences.

Passing the new proposal will give the Agriculture and Food Authority (AFA) powers to license miller marketers as opposed to the current regulation where licensing is done by county governments.

The proposed regulations also seek to introduce a new entity, called the auction organiser, to be organising coffee auctions in Kenya instead of the Nairobi Coffee Exchange.

Passing the proposals will also take away the Capital Markets Authority’s licensing of coffee brokers and revert it to AFA.

Coffee farmers see this as a way of ousting the coffee exchange and disempowering farmers by giving other parties more control of the value chain.

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