Ruto asks coffee farmers to keep off costly loans after debt waiver

President William Ruto lays the foundation stone for Meru Millers Limited in Mitunguu, Meru County on June 12, 2024. [Standard, PSC]

President William Ruto on Thursday warned coffee farmers against accumulating debts following a waiver issued by the government.

Speaking in Meru County when he presided over the groundbreaking ceremony for the construction of a Sh100 million dairy feeds factory at Mitunguu in South Imenti, he said coffee cooperatives societies had received a debt waiver of Sh6.9 billion and “we are warning them to avoid taking any more debts.”

“Coffee farmers must now refuse to take loans from firms that charge them up to 29 per cent interest rate. You should take loans from the government at a low interest rate of 3 per cent,” he said.

The Head of State said coffee farmers earned Sh210 billion from their produce last year.

The waiver falls short of the expected Sh8.2 billion that farmers had requested to pay debts they owe several institutions among them saccos and suppliers of farm inputs.

In the list seen by The Standard, Murang’a farmers are the highest indebted at a tune of Sh1.7 billion followed by New KPCU at Sh1.4 billion.

The clamour for the release of the coffee debt waiver swept across Mt Kenya region during the Direct Settlement System sensitization meetings conducted by Nairobi Coffee Exchange (NCE) two weeks ago, with coffee farmers urging the government to fulfill its pledge on debt waiver.

Last week in Kirinyaga, farmers objected release of their coffee payment rates citing a delay in the actualization of the waiver. In Mt Kenya region, Nyeri farmers are seeking a waiver of Sh930,407,607, Kiambu Sh147,824,451, Kirinyaga Sh979,239,904 and Embu Sh667,267,248.

The President was accompanied by his deputy Rigathi Gachagua, who also cautioned the farmers against taking expensive loans.

During the launch, it emerged that the factory will manufacture affordable feeds for Meru Central Dairy Cooperative Union Limited where farmers are now delivering 560,000 litres of milk daily.

Meru farmers were delivering 100,000 litres to the processor daily seven years ago but sustained efforts by the union and farmers had increased that amount to 600,000 litres daily. 

In recognition of the union’s success Cooperatives CS Simon Chelugui recently appointed its CEO Kenneth Gitonga to Nairobi Coffee Exchange board. Last year, Gitonga called for President Ruto’s intervention, saying that farmers lacked access to affordable feeds.

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