Coffee farmers have received a big boost after Government added Sh 4billion to the Cherry Fund raising it to Sh 6.7billion. Farmers will now be paid Sh 80 per kg up from Sh 20 per kg. The New KPCU will administer the fund.
The Government has through the New KPCU released an additional Sh 4billion to cushion farmers following a huge drop in coffee prices.
Prices of coffee cherry have dropped to a low of Sh 20 this year forcing the government to intervene with the Coffee Cherry Advance Revolving Fund to push the prices to Sh 80 per kilo of cherry.
The injection of the Sh 4billion brings to a total of Sh 6.7billion that will be distributed by the New KPCU to farmers to ensure production is not disrupted due to poor prices caused by a stand off between the government and buyers.
Speaking during a coffee farmers’ stakeholders workshop at the Safari Park Hotel to discuss how the money will be distributed, Cabinet Secretary for Cooperatives Simon Chelugui said the government will become a buyer of the last resort.
He said the reforms will ensure that coffee is not unnecessarily held in stores and that farmers will be able to continue with their farming activities with confidence.
Chelugui said there are still some issues that still need to be addressed and include the restructuring of the the Nairobi Coffee Exchange to align with Coffee Regulations, including the establishment of the a cupping lab and the appointment of an interim board of directors.
Others include fast tracking interventions related to the New KPCU, including the liquidation completion, refurbishment of the milling plant, cupping lab, and warehouses, as well as the development of an Act of Parliament to re-establish the New KPCU as a state corporation.
He said there will be reviewing and amending the Coffee Cherry Advance Revolving Fund Regulations to enhance accessibility.
Chelugui said the government is fully committed to completion of the ongoing reforms and pursuing additional initiatives and investments to ensure prosperity in the sector.
The Managing Director of New KPCU Timothy Mirugi said on eligibility, a small holder coffee estate or a small holder coffee grower shall be eligible to benefit from the fund but must be a Kenyan citizen and a registered member of a coffee cooperative society.
He said as outlined by the Coffee Cherry Fund Advance Revolving Fund Regulations 2020, only small holder farmers with area or parcels of land under coffee of not more than twenty acres will be eligible.
Mirugi said a staggered disbursement of the Sh80 cherry advance had been proposed with the first payment of Sh 40 at the factory level, upon delivery of cherry and the second payment at the dry mill level once parchment is delivered and quality determined.