Big plans, lofty promises and simmering chaos in coffee cup

By WAINAINA NDUNG’U

If things work out as planned, Nyeri Governor Nderitu Gachagua’s coffee value-addition could herald good fortunes for long-suffering farmers.

The county government believes it could get farmers as much as Sh100 per kilo of cherry and earn them Sh1.2 billion annually — more than double their current earnings.

Value-addition of farm produce was Gachagua’s key campaign strategy, leaving no doubt that he had little time for the Nairobi Coffee Exchange (NCE) and the Mombasa Tea Auction, which he branded “cartels playing grounds.”

Gachagua’s chief-of-staff Duncan Mathenge told farmers recently in Mathira that as the chairman of the Committee on Agriculture at the governors’ forum, Gachagua wanted to lead by example.

A taskforce established by the governor shortly after he assumed office recommended the centralised milling and marketing that he is now trying to implement as well as value-addition of coffee by starting a roasting, blending and packaging factory.

“Nyeri County coffee can be milled at Sagana KPCU, which is currently rented to Kenya Co-operative Coffee Exporters Mills (KCCM), a wholly owned subsidiary of the KCCE Ltd (Kenya Co-operative Coffee Exporters),” said part of the taskforce report.

Getting rid of stubborn co-operative society leaders might, however, prove the easiest task for Gachagua. Getting markets for the produce might prove to be a herculian task.

What has left a sour taste in the mouths of many co-operative leaders is that the county government has elected to disregard milling at Othaya CFS, where a 1,000kg per hour mill with a fully equipped laboratory and roasting house is installed.

The county Agriculture secretary Shadrack Mubea says Othaya can mill and store their produce because they have a 1,000 bag warehouse but rules out allowing the same at Rumukia CFS, where a 340 bags a day milling plant and a tasting laboratory was completed last year, due to lack of storage facilities.

Othaya Mills would require Sh8 million to instal bigger hullers and polishers as well as offices, warehouses, and a weighbridge to be able to handle all Nyeri coffee.

Some accuse the county government of starting on a wrong footing by seeking to provoke the traditional top coffee traders by attempting to close down the Karatina-based Central Kenya Coffee Mills.

“There are two main buyers of coffee in this country and they are going to make life hard for anybody getting into this orbit,” predicted Macharia Muhuni, chairman of Kiandu Coffee Farmers Society three weeks ago.

Newton Nderitu of the Othaya CFS said although they welcomed the government initiative, they wanted to push ahead with their own milling and direct marketing.

“Markets do not determine the price of coffee,” said Nderitu. “It is the buyers who do.”

Last year, the Othaya CFS paid an average of Sh38.50 and a high of Sh50.15 per kilo of cherry to its farmers across the 19 factories. It had given an advance of Sh16 and has been paying the same this year.

Othaya is one of the few societies that is paying an advance even as farmers face huge cash demands for the start of the year expenses.

Worrying picture

During countywide consultations to approve the resolutions of the taskforce last year, Gachagua promised Sh30 advance to farmers and final payments of up to Sh100. That has not been forthcoming even where societies have presented their produce to Sagana.

In an interview, county Agriculture Secretary Mubea said societes that have delivered to Sagana should expect advances this week. But an interview with leaders of societies such as Rumukia present a worrying picture.

Rumukia chairman Gateru Kanyua said the county government advised them to apply for advance credit from Co-operative Bank. But he was not hopeful that this would be forthcoming in view of the uncertainty about the marketing chain.

“Banks would automatically require assurances that they are giving good credit and repayments will be soon,” said Kanyua.

Kanyua worried much about harming their established marketing chain, which comes with a Fair-trade Labeling Organisation and 4C  (Comon Code for the Coffee Community) certification.

“Those certifications require advance auditing from the farm level to the pulping factory, mills and the marketing chain,” said Kanyua. “Our main worry is the risk of breaking the certification chain. Then all the blame is likely to land on  the management if things don’t work out.”

The Rumukia chairman says he is worried that the coffee sector has over the years turned to be the experimental ground for marketing gurus.

He cites the 2009/10 coffee season when his society and five others from all over Kenya were convinced by then Co-operatives minister Joe Nyagah to front the Kenya Co-operative Coffee Exporters (KCCE) as a new marketing agent.  “KCCE had promised a high of Sh40 and an advance of Sh20. But it couldn’t fight the cartels that control the market. So after the advance, it ended up paying just an average of Sh26 with a high of Sh39.10 and a low of Sh23,” said Kanyua.

County government officials are very cagey about the promised “ready” markets in China and USA.  Trade secretary Stanley Miano is currently leading a delegation in an export promotion tour of the United States where he will be speaking to coffee roasters, importers and packers in US cities.