Govt pays out Sh260m to coffee farmers

July 9, 2008

, NAIROBI, July 8 – The government has released Sh260 million towards the settlement of debts owed to coffee farmers.

Agriculture minister William Ruto who released the money to the Coffee Board of Kenya said the government decided to shoulder the debt after the coffee marketing agency failed to meet its obligation.

The release of the funds is expected to boost Kenya’s coffee production which has been on the decline over the last few years.

Kenya, which produces one of the best coffee varieties in the world, has seen its output drop from an all time high of about 130,000 metric tons in 1988 to about 48,000 metric tons in 2005.

The dip in production has been linked to poor payment and management-related problems and although earnings from the sale of the crop have been rising parallel to declining production, this has not translated into prompt payments to farmers.

By last year the Coffee Board of Kenya owed farmers millions of shillings in unpaid claims, a debt which the government was keen on retiring.

Ruto explained that the ministry of agriculture in collaboration with industry stakeholders were also focused on exploring possibilities of branding Kenyan coffee to improve earnings from the sector.

The Minister noted that the Coffee Board and government were working on a plan to develop a unique Kenyan coffee brand that can be marketed on its own, citing interest from countries like Japan.

"We were in Japan with the Managing Director of Coffee Board almost a month ago and many coffee traders are interested in Kenyan coffee, and that is the challenge that we have," he said.

Meanwhile the minister called on coffee farmers to take advantage of the prevailing high food prices on the world market to boost production.

He observed that the government, on its part, had already set aside a low interest credit fund to aid farmers.

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