Kenya has received Sh1.5 billion from the World Bank to improve the production of specialty coffee just days after President Uhuru Kenyatta extended the term of a team appointed three years ago to reform the sector.
The funds, which will initially be disbursed to eight counties that account for more than 70 percent of the national coffee production, will finance co-operatives and efforts aimed at enhancing efficiency along the crop’s value chain.
Agriculture Secretary Peter Munya said the money would be issued to select co-operative societies, which would, in turn, give farmer seeds and subsidised fertiliser to boost productivity.
“Some component of these funds will be used in marketing. We want to improve the productivity of specialty coffee and link farmers to direct markets in order to eliminate the issue of cartels,” said Mr Munya yesterday during the launch.
Last week, President Kenyatta extended the term of the Coffee Sector Implementation Committee chaired by Prof Joseph Kieyah by one more year to enable it to finalise the national coffee policy. Its term was meant to end this month.
But even as the team works on the national policy, Mr Munya said the World Bank project, which would later be rolled out to other counties in September, is expected raise productivity from the current 40,000 metric tonnes annually to more than 100,000 metric tonnes.
Among other goals, the project seeks to eliminate the cartels by sourcing market for farmers to enable the direct sale of their produce at the best prices, Mr Munya said.
“We want to look for the best markets outside so that farmers can have access to direct sales of their produce for good returns,” he said.
At the moment, Kenya sells more than 95 percent of its coffee to the world market via auction at the Nairobi Coffee Exchange, with only a 12 percent window for direct sales.
The first phase will cover Muranga, Kiambu, Meru, Tharaka Nithi, Machakos, Kirinyaga and Nyeri counties.
About 60 percent of the funds will be used in the automation of co-operative processes and modernisation of the equipment.
Most of the machines coffee co-operatives own have aged and cannot function well, affecting the efficiency of milling the produce.
Coffee earnings dropped by Sh2 billion at the end of February compared with the same time last year following a slump in volumes and depressed prices at the auction during the month.
Market report from the Nairobi Coffee Exchange indicated that the crop earned Kenya Sh6.6 billion at the end of the last month, down from Sh4.5 billion that was realised in the previous year.