Direct Selling Coffee Pricing Plan to Increase Farmer Incomes


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Direct Selling Coffee Pricing Plan to Increase Farmer Incomes


A coffee farmer in Meru. FILE PHOTO | NMG

geraldandae

Summary

  • The price of coffee at auction will be determined by the value of direct sales to ensure farmers get more from their produce.
  • This decision will allow farmers to get the highest price for their produce at the Nairobi Coffee Exchange (NCE).
  • Munya said this new pricing formula will also help stabilize coffee prices and minimize price fixing by unscrupulous traders who have been eating away at farmers’ incomes for decades, pushing some to abandon cash farming altogether.

The price of coffee at auction will be determined by the value of local sales for the same grades to ensure farmers get more from their produce, Agriculture Cabinet Secretary Peter Munya has said, marking a break with the system based on offers.

This decision will allow farmers to get the highest price for their produce at the Nairobi Coffee Exchange (NCE).

Munya said this new pricing formula will also help stabilize coffee prices and minimize price fixing by unscrupulous traders who have been eating away at farmers’ incomes for decades, pushing some to abandon cash farming altogether.

Current coffee laws state that prices must be based on direct sales, a provision that has been in place since the introduction of direct sales in the country in 2006.

“Farmers’ prices at the auction will be guided by the price the coffee fetches in the international market,” Munya said during a tour of central Kenya.

NCE welcomed the move, saying implementing the directive would be a win for auctions and farmers.

“Its implementation will promote the auction as it will complement what already exists. It will also be a win for farmers who will benefit from good prices,” said NCE Managing Director Daniel Mbithi.

Mr Munya urged Parliament to fast-track the passage of the Coffee Bill 2020 to give coffee farmers a reprieve.

He also said that farmers will have the power to choose the factories that will process their coffee from a group of three interested millers.

The bill also proposes that farmers have a representative at every stage of coffee grinding and supply to buyers to ensure accountability across the coffee value chain.

Mr Munya urged farmers to tap into cherry working capital to access cheap loans, adding that 7 billion shillings had so far been disbursed to revive the sector.

In 2019, the state announced that it would issue cherry advance funds to farmers, which they can use to meet their financial needs while awaiting payment. Issuance of funds has already started for coffee growers in the country.

The advance cherry levy was announced by President Uhuru Kenyatta and is intended to help farmers reinvest in growing the crop and meeting other financial needs while they wait for their returns from the coffee cooperatives.

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