State writes off Sh3.7 billion debt farmers owe coffee Saccos

By Job Weru and Boniface Gikandi

Finance Minister Uhuru Kenyatta was in Murang’a with good news for coffee farmers in Mount Kenya region; their Sh3.7 billion coffee debts to various financial institutions have been written off.

Speaking in Murang’a Uhuru, who is also Deputy Prime Minister, announced Treasury has already released Sh797 million to eight financial institutions and unions, which loaned the money to farmers.

He said the funds, which were released comprise just 27 per cent of the total debts, which amount to Sh3.7 billion.

And going by the promises Co-operatives Development Minister Joseph Nyagah, who was with Uhuru, said the largesse of writing off loans may soon spread across the country following the rollout of a National Debt Write-off Programme.

Through this programme, Nyagah said, the Government will save farmers the burden of debts through waivers and free them to concentrate in new production.

The leaders called on farmers to ensure they plough back the savings from waived loans into production to revive the sector.

They drew their attention to the fact Kenya used to produce more than 200,000 tonnes of coffee in 1980s, but the volume has fallen far low today.

Nyagah said the leaders would today be in Machakos and then proceed to Bungoma and Meru on Monday and Tuesday.

The ministers explained the funds are meant to end farmers’ woes and free their resources from debt repayment to helping increase production and boost economic revival through the agricultural sector.

Criminal networks

"We are committed to eradicate poverty and improve the lifestyles of our farmers through writing-off debts, which have been a burden and a hindrance to their own as well as national development," said Nyagah.

Uhuru decried increased incidents of coffee theft and mismanagement among some factories and co-operative societies, and called for urgent and stringent measures that would ensure farmers get their fair-share of proceeds.

"Let us know that coffee thieves are among us. We should first elect credible and accountable leaders in our societies to streamline the sub-sector," he said.

Uhuru’s remarks came after some Members of Parliament and farmers from the region complained of wanton breakages into coffee factories, leading to theft.

Hiram Mwangi Mwaniki, the chairman of Thangaini Coffee Co-operative Society — whose factories have on several occasions fallen victim to these attacks — said the criminal networks have extended their roots to coffee plantations, where they are cutting off bushes.

The thefts have led to low morale among farmers, which is believed to affect annual production levels and consequently erode farmers’ earnings.

Youth and Sports Assistant Minister Kabando wa Kabando accompanied Uhuru. Others present were local MPs, Muturi Mwangi (Kiharu), Elias Mbau (Maragua), William Kabogo (Juja), Maina Kamau (Kandara), and Clement Muchiri (Mathioya). Also present was Murang’a East DC George Natembeya.

Officials of local co-operative societies urged the Government to ensure farmers’ debts were written off.

The leaders took the forum to castigate Coffee Board of Kenya, which they accused of abetting coffee thefts. They said CBK board should be dissolved to ensure farmers’ representation in decision-making.

Mr Kabando, Mr Mbau, and Mr Muchiri said political leaders, who had selfish interests, picked some CBK directors, while the interests of farmers were neglected.

"Some of the directors do not have any idea how coffee is farmed and that is why they are only there to satisfy their interests," claimed Mbau.

They accused some unnamed CBK officials, who are charged with management of coffee, of being behind licensing of private millers suspected to be behind the massive coffee thefts. Mr Mwaniki called on the Government to intervene by ensuring farmers’ interests were protected in the board. The State should also help address issues bothering them and which have undermined the growth of the sub-sector.

"The recent killings in a coffee factory in Bungoma prove that something must be done to curb coffee thefts," said one official.

Mr Natembeya, however, accused some coffee co-operative societies and factory leaders of being behind increased coffee theft.

"Although the Coffee Act regulates sale of the produce, CBK has appeared powerless in dealing with the menace," said Natembeya.

Muturi urged coffee farmers to form an umbrella organisation that would help them acquire farm inputs at subsidised rates.

In the programme whose first phase was launched on Thursday at Murang’a Sports Club, the Government intends to bail out farmers who acquired loans and signed away their coffee proceeds as securities.

The loans were issued to farmers in 1980s and 1990s, through farmers’ savings and co-operative societies (Saccos), among them Murata Sacco and Mugama Farmers Union in Murang’a, Taifa Sacco, and Mathira Farmers Sacco in Nyeri, Kiambu Growers, KiriNyagah District Union, Gichugu Sacco and Kirinya District Sacco in KiriNyagah.