Assembly told how farmers incurred Sh127m loan on a coffee mill

Agriculture Committee Chairperson Canon Rev. Elizabeth Kibai addressing the press recently. [Joseph Muchiri, Standard]

Coffee farmers will have to pay a Sh127 million debt that was used to put up a coffee mill without the aid of the county government, an MCA has said.

Speaking at the county assembly on Friday, Agriculture Committee Chairperson Elizabeth Kibai said 24 cooperative societies came together in 2008 and resolved to set up the coffee mill.

Ms Kibai said the societies secured a loan of Sh90 million in 2014 from the Commodities Fund to purchase milling equipment.

The loan has now ballooned to Sh127 million whereas the mill is yet to be operationalised. She stressed that the societies were responsible for paying the loan like it was agreed 11 years ago.

“What the county government can do is help the societies get a waiver on the loan," said Kibai.

Kibai explained that the 24 societies committed to buy 765 shares each in the coffee mill at a cost of Sh5,000 per share.

The money raised was expected to settle the initial Sh90 million loan. Kibai said only Murue Farmers’ Cooperative Society has contributed Sh21.6 million.

She, however, expressed hope that the societies would pay up. “The mill will be operationalised in September. The machinery has been tested and it is working,” Kibai said.

She told the Assembly that her committee was in the process of finalising the drafting of the Embu County Cooperatives Bill, 2019 which is expected to provide a legal framework to streamline the management of the coffee mill.

Kibai also asserted that both the Chief Officer for Cooperatives and the Director for Trade sit in the Coffee Mill Management Board to ensure good governance.

She noted that the directorate of cooperatives regulates the activities of the coffee mill, and the societies that have financed its establishment.

Governor Martin Wambora and former Embu Senator Lenny Kivuti have been pushing for the waiving of the loan.