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Gov’t disburses Ksh6B to coffee farmers, hikes guaranteed returns per kilo by 33%

Tuesday, January 9th, 2024 17:32 | By
Coffee beans.
Coffee beans. PHOTO/Pexels

The government has disbursed Ksh6 billion to coffee farmers for the Coffee Cherry Advance Revolving Fund distribution and implementation of a comprehensive coffee production sensitization program.

In a statement on Tuesday, January 9, 2024, the Government Spokesperson Isaac Mwaura also promised that the farmers would get a 33 per cent increase in guaranteed minimum return from Ksh60 to Ksh80.

"Recognizing the pivotal role of coffee in our economic growth and its significant support to over 5 million Kenyans involved in the whole coffee value chain, we've undertaken strategic initiatives to enhance production. To address the decline in coffee production caused by price volatility and high production costs, the government has taken decisive steps which will see our coffee production increase from the current 51,000 MT to over 100,000 MT by 2025," Mwaura stated.

"The government has disbursed 6 billion shillings to coffee farmers to bolster the Coffee Cherry Advance Revolving Fund distribution and implement a comprehensive coffee production sensitization program."

For a start, Mwaura said the distribution will target Machakos, Kajiado and Taita Taveta Counties (at Kagundo Kainga Stadium on Wednesday, January 10, while on the exercise will head to Nyeri County (Karatina Stadium), Kirinyaga County (General Kassam) and Murang'a (Ihura Stadium) on Thursday.

"This will ensure a Guaranteed Minimum Return (GMR) of Ksh80 per kilo of coffee cherry, up from the previous non-guaranteed price of Ksh60. Any surplus revenue generated beyond this guaranteed minimum price will be distributed to the farmers as coffee cash bonus," he added.

Coffee farmers

Mwaura announced that the exercise will extend to all 37 coffee-producing counties nationwide, spearheaded by the Ministry of MSME and Cooperative Development.

"Furthermore, the government has significantly increased the allocation to the Agricultural Financing Corporation, from Ksh2 billion to Ksh10 billion. This augmentation is aimed at providing farmers with access to credit at single-digit interest rates. These funds will further alleviate the production costs and bolster productivity in the coffee sector," he added.

In December, Cabinet Secretary for Cooperatives and Micro and Small Enterprise Simon Chelugui promised that the government was orchestrating major changes in the coffee industry.

“For a long time, the coffee industry has suffered from a lack of finance, poor governance competition from other beverages, for example, tea and juices. Massive split of the primary farmers coffee cooperative societies into smaller units has led to sharp decline of the crop production and contributed to mass exodus of farmers to other economic subsectors.

 “In the last one year, the government has committed to enhance access to credit and guarantee minimum returns. This is geared towards boosting farmers’ morale to produce more, “he added.

The funds in the Coffee Cherry Advance Revolving Fund will be managed by New Kenya Planters’ Cooperative Union (New KPCU).

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