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Low coffee output alarms stakeholders

News By Boniface Gikandi | 09th Dec, 2019
Sasini PLC and Group Chairman Dr. Naushad Merali awarding the best coffee farmers cooperative officials with a trophy during the 13th field day on Friday.Photo: Boniface Gikandi

The national and county governments have been urged to support coffee production in Central Kenya through grants and subsidies to farmers.

Low returns to farmers due to declining prices in international markets have made the production of the once-lucrative commodity a loss-making venture, pushing farmers to other crops and real estate. According to Sasini Group – a key stakeholder in the field, the country’s annual coffee production has drastically gone down to about 40,000 tonnes from 130,000 tonnes annually.

Group Chairman Naushad Merali said one of the explanations of the reduced output is the dwindling acreage of land under the crop in the region due to farmers’ apathy.

Mr. Merali called on both levels of government to support the crop through the scrapping of existing levies and providing subsidies.

“Some neighbouring countries such as Rwanda are now nearly producing at the same level as Kenya, albeit under very low acreage,” he said on Friday during a farmers’ education day at Kamundu Farm in Kiambu County where the firm operates a coffee mill and a macadamia processing plant.

Despite the current gloomy outlook for the sector, Merali urged farmers to increase production, saying prices are likely to improve next year.

Efforts by the government to reform the sector have failed, with newly proposed laws not helping to win over disfranchised farmers.

Some farmers from the region recently faulted the Crops (Coffee) (General) Regulations of 2019, saying they would further entrench the cartels that have overseen the decline of the industry that was once a leading foreign exchange earner for the country.

The new regulations introduced different measures to revive the sector, including increased oversight of industry players.

But according to the giant Kirinyaga County Cooperative Union, the new measures would disadvantage farmers while pushing up the cost of production.

The union accused the Agriculture ministry of violating the Constitution by failing to consult stakeholders, claiming the only county governments were involved in formulating the regulations.

A recent study was done by financial services firm ICEA Lion indicated that farmers are increasingly getting low returns from cash crops.

“Revenue from commercial agriculture as a proportion of the market value of agriculture sector output fell steeply from 27 percent in 2013 to 16 percent in 2018,” said the study report.

ICEA Lion attributed the drastic decline to rising costs of production.

“Aggregate fertiliser costs rose by 68 percent while the cost of crop chemicals increased by 165 percent between 2013 and 2018,” said ICEA Lion Head of Research Judd Murigi.

He further said the aggregate cost of fuel and power increased by 34 percent while the cost of manufactured feeds was up 28 percent during the period.

Nairobi Securities Exchange-listed Sasini is now diversifying to other crops like tea and macadamia but still controls about 15 percent of the total national coffee production.

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