, NAIROBI, Kenya, Mar 12 – The Kenya Planters Co-operative Union (KPCU) plans to sell and invest Sh3 billion worth of assets in order to clear a mounting debt of Sh656 million owed to the Kenya Commercial Bank (KCB).
Co-operative Development and Marketing Minister Joseph Nyagah said on Monday that the giant miller did not need a Sh1.2 billion bailout package as proposed by the Parliamentary Committee on Agriculture.
“We don’t need the government to pay our bills because we have assets to sell that can generate the money owed,” he revealed.
“Coffee farmers have also discussed what we can do with our headquarters at Wakulima House which is empty and underutilised. The previous board had proposed to have a KPCU car park which would earn millions of shillings every day for the benefit of the coffee farmer,” he said.
He announced that farmers have proposed to make a 54-acre plot in Dandora, Nairobi, into “a mega housing estate under the KPCU Housing Limited and KPCU Investments Company Ltd will be formed to oversee the management of the remaining assets that include the Gala buildings.”
The parliamentary committee has recommended that the government approves a Sh1.2 billion bailout package for the union to enable the organisation to kick start its operations and implement a business plan that will focus on revival of the coffee industry and better earnings for farmers.
The committee claims that millions of shillings have disappeared, illegal disposal or theft of the assets has occurred along with the running down of milling facilities and they’ve blamed laxity by the ministry; the Coffee Board of Kenya, KCB, and the KPCU itself for the plight facing the 750,000 members of KPCU.
They’ve recommended that KCB be forced to pay for the losses incurred after the receivers failed to make a turnaround at the cooperation as was the agreement of the receivership.
Nyagah said that he would ask the president for a one month extension added to the six months his ministry, the Ministry of Agriculture and the Treasury were given to restructure the organisation, as they try to repossess the Coffee Board of Kenya building, make farms in Kiambu County open to willing buyers and unite farmers involved in the issue.
“At the moment there’s definitely a conflict going on between the big real estate owners who have alternative use of their land and small co-operate farmers,” he admitted.
“In the next few weeks we will sort this out because KPCU belongs to both and it’s important that both groups speak the same language and that both are on board,” he emphasised.
The union is made up of 300 co-operative societies, which represent about 700,000 small scale farmers and 2,000 private estate farmers.
Nyagah announced that he’s travelled to every county that grows coffee in Kenya except for Kisii, which he’ll visit this week to get views from all coffee farmers on how to go about restructuring KPCU and balancing the interests of its shareholders.
“We’ve set up a team to collect as many views, mainly from co-operative farmers, on how they think we should restructure the union,” he declared.
“However, the estate owners are concerned that we need to have more consultations with them, and we’ve started that process with both the small and big estate owners,” he confirmed.
Nyagah also warned that the construction of mills all over the country could lead to more violence and theft due to the shortage of coffee being produced by the planters.
“About 20 people have died in Bungoma, Kisii and Central Kenya due to crimes attributed to coffee,” he said.
“We must improve the production of coffee in this country from 45 thousand metric tons a year to over 135 thousand metric tons in order to curb this violence,” he acknowledged.