It's smallholders who will reap big from 'Gachagua' Coffee Bill

 

Deputy President Rigathi Gachagua is shown some coffee beans varieties when he presided over the re-opening of the Nairobi Coffee Exchange Auction brokers’ maiden sale at Wakulima House/KPCU, Nairobi on 15 August 2023. [ DPCS, Standard.}

Barely 24 hours after the swearing-in of Deputy President Kithure Kindiki earlier this month, former Deputy President Rigathi Gachagua attended a funeral service in my home county of Kirinyaga and took the opportunity to challenge Members of Parliament (MPs) to pass the Coffee Bill 2023. In typical ‘Riggy G’ speak, the just ousted DP ‘encouraged’ lawmakers, tongue-in-cheek, to process the Bill as speedily as they had passed his impeachment, implying that his ouster may have muted the process.

The principal objective of the Coffee Bill 2023 is to provide for the development, regulation and promotion of Kenya’s coffee industry. Cultivated in 33 counties, the crop earns about Sh30 billion annually, making it a top-tier export. More than 70 per cent of coffee is produced by 800,000 smallholder farmers, with approximately six million Kenyans earning a living from it. They include growers, millers, roasters, packers, marketers, brokers, coffee houses, and even finance and insurance concerns.

Kenya’s semi-processed coffee finds its way to over 50 nations where it is greatly celebrated for its high standards. A 'Coffee Kenya' quality mark, officially registered by the Kenya Industrial Property Institute, was launched in 2015. ‘So Rich, So Kenyan’, it declares. But ironically, Kenya’s hard-working small-scale farmers benefit least from this highly valued ‘liquid gold’.

Coffee sector policies have for decades failed to protect smallholder farmers who are simply expected to grow the crop, deliver to the designated cooperative, and await payment, with further processes remaining a mystery. Not surprisingly, late payments and unpredictable income have been a major frustration. Numerous cooperatives have fallen prey to serious mismanagement, including the careless procurement of high-interest loans that further hurt the farmer’s pocket.

According to Prof Joseph Kieyah, the Chairman of the Coffee Sub-sector Reforms Implementation Standing Committee, small-scale farmers have for too long been ‘trapped’ in poverty while lining the pockets of a select few industry players. 

The average age of coffee farmers, according to the Kenya Agricultural and Livestock Research Organisation, is over 60, yet the younger generation is understandably reluctant to take over.

Coffee has occupied a portion of my own family’s ancestral farm in Kirinyaga for four generations, having been introduced in the 1950s-60s. Last year, Gakuyu-Ini factory nearby paid the highest amount per cherry-kilo nationwide, yet none of our progenitor’s younger descendants show the slightest interest in taking up the venture.

Such apathy is prevalent amongst youth countrywide and casts a pale shadow over the sector’s future. These are some of the challenges that the Coffee Bill 2023 seeks to ameliorate.

One of the most important remedies of the Bill is the recognition of  farmers ownership of their coffee and the full protection of their interests until the eventual sale of the product. According to the Bill, the Direct Settlement System, run by a commercial bank and regulated by the Capital Markets Authority, will ensure that the farmer is paid directly for his product, with no broker or agent allowed to receive monies on his/her behalf. This will be a huge gain for farmers who have in the past waited several months to receive payment. It will be a complete game-changer for the sector.

The Bill also allows farmers to sell directly to buyers, bypassing the coffee exchange if they so wish. This will make it possible for farmers to benefit from new and existing markets, for example, through the production and marketing of highly sought-after specialty roasts.

At a more granular level, the Bill seeks to regulate coffee cooperatives in order to eliminate the exploitation of farmers and also enhance security in coffee-growing areas so as to curb theft at factories, for example.

Importantly, the Bill seeks to re-establish an autonomous Coffee Board of Kenya and Coffee Research and Training Institute, thus improving the efficacy of both institutions, to the great benefit of the sector.

An executive order signed by President William Ruto in 2023 placed coffee reforms directly under the purview of the Office of the Deputy President, hence the former DP's keen involvement in the sector. Granted, the proposed reforms bear significant political import for those involved. But, if passed, the Coffee Bill 2023 will be of great benefit to the close to one million hardworking farmers countrywide.

Were I a member of the August House, I would require little persuasion to grant an enthusiastic nod to this ground-breaking bill.