Coffee farmers earnings hits 200pc mark

January 13, 2011
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, MERU, Kenya, Jan 13- Coffee Farmers who have sold their coffee through the Kenya Co-operative Coffee Exporters (KCCE), a coffee marketing firm wholly owned by Co-operative Societies,  have registered over 200 percent growth in payments for their coffee in the last season.

In some areas like Meru, farmers have registered over 380 percent growth in incomes with coffee payments growing from Sh27 per kilo paid last year to the Sh81 paid in Meru this last season.

 “Prior to the farmers making the bold decision to incorporate their own coffee marketing firm the payments for their coffee have remained consistently poor even when International Coffee Prices were relatively high,” said KCCE Managing Director Lucy Murumba.

These low prices have impoverished the peasant farmers who are the bulk of coffee production in Kenya. Their decision was particularly viewed against the power of the cartels to sabotage the farmers’ efforts to control their own produce.

In such areas as Machakos where the cartels consistently paid farmers a paltry Sh27 per kilo of cherry, payments of close to Sh70 per kilo of cherry have been made by various marketing agents signifying the success of the farmers initiative to take control of their coffee marketing through KCCE . 

“With farmers having taken control of their marketing, coffee milling and marketing cartels have been forced to rethink their business strategy,” she added.

The smallholder coffee farmers have been seriously disadvantaged as they were unable to  directly market their coffee due to lack of market knowledge and  an infrastructure to transact with roasters and other buyers globally.

They have also largely been locked out of the supply chain since large coffee buyers have invested heavily to control the entire process from the farm gate, to the dry mills and all the way to international buyers and they have also positioned themselves as the major dealers at the auction.

The farmers have had little or no direct interaction with the buyers as trading has been done by powerful and connected intermediaries.

“This total control has contributed to price manipulation and as a result, small scale coffee farmers have had little reason to invest in higher quality production leading to a vicious cycle of declining earnings and lower yield per hectare,” the MD said.

Mrs Murumba added that to change this situation KCCE is now offering farmers’ education, supply of inputs, the milling of their coffee and its marketing. 

Motivated by the better prices that they are now obtaining, small scale farmers have now moved further and incorporated Kenya Co-operatives Coffee Millers Ltd (KCCM), a wholly owned subsidiary of the KCCE to mill their coffee.

This milling company has leased KPCU (under receivership), mills in Sagana to mill their coffee and hand over to KCCE for marketing. The Company has commenced milling and the deliberate delays that KCCE was being forced to get through by the cartels of millers is now a thing of the past.

“With farmers beginning to take control of their coffee marketing process, it is a matter of time before the large buyers loosen their grip on the peasant farmers,” Mrs Murumba said.
 

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