NYERI, Kenya, Jan 10 – The ministry of agriculture will require coffee farmers countrywide to borrow from the Cherry Advance Fund that was set up by the government last year and ran by Kenya Planters Co-operative Union (KPCU).
According to the Ministry’s Cabinet Secretary Peter Munya, this will be implemented through a newly proposed law that has been tabled in Parliament which bars millers, marketers and SACCOs from loaning farmers as is the practice today.
The new coffee bill, which is undergoing public participation, will make it illegal for any coffee factory or society to borrow from other sources unless it is from the Cherry Fund.
“We as a ministry have realised that one of the reason why the sector is dying is due to huge debts incurred when society officials borrow from bank’s which charge farmers high interest rates after awarding their officials kickbacks. We are reversing this trend by enacting a law that only cherry fund can loan farmers at an affordable rate of three percent” said Munya.
This comes even as farmers refuse to borrow from the Sh3 billion coffee chery fund set by the government last year in efforts to revive coffee sector whose production has shrunk by at least three times.
Official data indicates that in the eighties the country was producing twenty millions tonnes each year. However, this production has gone down to less than three milion metric tonnes due to the fact that majority of farmers have abandoned coffee production due to unfavorouble pay occasioned by high debts incurred by their cooperatives.
Speaking during a public participation meeting in Nyeri, Munya said that once the bill is passed, it will be unlawful for society officials to borrow from other sources apart from new KPCU controlled fund.
Munya who was on a three days tour in Nyeri county said that many farmers are yet to borrow from the fund with huge amounts lying idle at cooperative bank.
‘”It’s amazing that many farmers have refused to borrow from this fund ,we have directed that application forms be available at chiefs and county offices to enable farmers access this fund” said Munya .
Last year, the goverment set aside a fund worth Sh3 billion to allow farmers to borrow without collateral. A farmer only need to state his or her production and get a loan of forty percent of his produce markert value.
New KPCU chairman Henry Kinyua said that farmers are at liberty of borrowing the funds even if they have not delivered their coffee for milling in his firm.
“Many farmers are being cheated that we want to ensnare them if they borrow ,we will advance you the fund even if you did not deliver to us” said Kinyua.
Other new rules that have been introduced in the new bill are milling loses will not exceed nineteen percent per tonne of partchment coffee, no miller will charge more than forty dollars per tonnes and farmers will recieve their money direct in the accounts once it’s paid .