Windfall for coffee farmers as State disburses Sh4 billion

The government has disbursed Sh4 billion to coffee growers across the country under the Coffee Cherry Advance fund.

Co-operatives and Micro, Small and Medium Enterprises (MSMEs) Development Cabinet Secretary Simon Chelugui said the amount, which was increased from Sh20 to Sh80 per kilogramme (kg) of coffee cherry, is meant to improve the financial sustainability of the farmers.

This will now see a farmer paid Sh40 per kilogramme of coffee beans delivered to the factory and an additional Sh40 per kg when the cherry is taken to the milling plant.

Chelugui appealed to farmers to apply for the fund which is administered through the New Kenya Planters Co-operative Union (New KPCU).

“We have already processed and paid over Sh4 billion to the farmers as a revolving fund. We want more farmers to apply for this fund and the application must be supported by the delivery of coffee to the primary factory,” Chelugui said in a statement.

He noted that once the coffee is delivered to the mills, it is then taken to the Nairobi Coffee Exchange (NCE) for sale. The government then issues the buyers five days’ notice to settle payment of the coffee bean through the Direct Sales Settlement (DSS).

“We expect all the stakeholders in the sector to timely lodge their payment claims for settlement. The objective of this policy shift is to ensure that farmers get their money on time. By doing so, the farmers, millers, warehouse owners and the transporters will receive their respective payments. This will happen simultaneously,” he said.

President William Ruto’s Cabinet recently approved an additional Sh4 billion for the coffee cherry kitty, bringing the total amount to be advanced to farmers to Sh6.7 billion.

“Nyeri County is currently leading in the uptake of the cherry advance. Farmers in the county have received Sh607 million as of March 19, this year. This translates to Sh40 per kilogram of coffee,” Chelugui said.

The CS said that reforms in the coffee sub-sector are aimed at increasing coffee production from the current 51,852 tonnes per year to 200,000 tonnes within five years.

Recently, New Kenya Planters Cooperative Union (New KPCU) Managing Director Timothy Mirugi said coffee farmers in 20 counties received Sh2.3 billion from the Cherry Advance kitty managed by the giant cooperative society.

The amount was disbursed in the last three months (December, January and February) to 181,825 farmers affiliated with 186 cooperative societies. Kirinyaga farmers led the pack, receiving Sh377.4 million.  

Mirugi stated that the Advance Kitty is one of the initiatives by the government to support farmers in the cooperatives and estates - focusing on increased coffee production. He said since the inception of the coffee cherry advance kitty three years ago, the uptake has been at Sh3.67 billion, disbursed to 298,763 farmers in 24 counties, with Nyeri leading at Sh607.2 million.

In the last three months, Mirugi said Kirinyaga farmers got Sh377.4 million, Kiambu Sh281.5 million, Nyeri Sh281.9 million and Bungoma Sh214.2 million.