Marketing gaffe costs Nyeri farmers Sh1 billion

Coffee farmers have lost close to Sh1 billion due to marketing and milling blunders by the County Government, Nyeri County Assembly was told last week.

In a report by the sectoral committee on Agriculture, Livestock, Fisheries and Co-operative Development tabled in the House, the County Government came under heavy criticism for the way it handled the milling and marketing of coffee.

"The coffee was not sold when the prices were high, but when the prices were as low as 200 dollars per 50 kilogramme, as evidenced in the sale of Auction Number 20 to 30," the committee told the House.

The committee claimed Governor Nderitu Gachagua should be held accountable for the loss and misleading farmers to join the pool marketing initiative, spearheaded by the county government.

In addition, the committee questioned the ability of Kenya Coffee Co-operative Exporters (KCCE) to market the farmers' coffee.

"KCCE has been the worst performer in auction analysis, yet the governor contracted them to market farmers' coffee," the chairman of the committee, Joseph Ngunyi, claimed.

He alleged that for a long time, Nyeri coffee was being hoarded by KCCE when the prices were as high as 651 dollars, and later released for auction when the prices were as low as 220 dollar per bag.

Mr Ngunyi was responding to a question by Majority Leader Antony Kibuu on how to compensate the farmers, considering that coffee farming was the main source of income in the county. Kibuu also wanted to know how the produce was marketed and how many bags have so far been sold.

COFFEE ACT

In addition, he sought to know how many bags were being held at Kenya Planters Cooperative Union warehouse in Sagana.

Ngunyi told the House that despite selling coffee for more than Sh1.6 billion, the money was still being held by KCCE contrary to the Coffee Act, which states that farmers should be paid their dues within seven to 14 days after the sale.

On marketing, Ngunyi claimed the governor  decided to market coffee through KCCE instead of an American coffee buying company, the Green Coffee Vault owned by Timothy O'Brien, as had earlier been planned.

Questions had been raised by MCAs over the ability, credibility and capacity of the Green Coffee Vault company, registered in Missouri, in the United States, in regards to marketing.

Ngunyi said O'Brien and his company shouldn't be trusted with the farmers' coffee since he had serious credibility issues, which ought to have been addressed first.

"We know that 116,000 bags from the county were delivered to Sagana millers, but so far only 60,676 bags have been sold at a cost of Sh1,695,412," the chairman said.

He noted that the farmers should not expect the Sh130 per kilogramme as promised by the county government. The committee further noted that the county coffee was being transferred from KCCE warehouse in Sagana to Dandora, Nairobi to ease congestion.

LEASE AGREEMENT

Furthermore, the lease agreement for KCCE to mill and store coffee at Sagana expired on July 4, this year. The committee saw no need of renewing it.

"KPCU receivership is already over and it will be taking back its premises at Sagana," Ngunyi said.

He said according to Coffee Act 2013, marketers are supposed to deposit one million dollars with the Coffee Board of Kenya, yet KCCE was yet to fulfill the requirement.

The Speaker of the Assembly, David Mugo, directed the Secretary in charge of Agriculture and Trade to appear before the Agriculture committee to shed more light on the issue.

In a meeting held at Wambugu Farmers Training Centre on May 10, Gachagua told farmers they will be paid on June 30, once all the coffee stock, which was being held at the godown, is sold. He urged farmers to be patient until the end of this month, when all the coffee under the marketing pool initiative would be sold, either directly or through auction by the county government.