Co-operatives play key roles in rural development

Joe Nyagah

In the minds of many Kenyans, cooperative movement, especially in the agricultural sector, is a corrupt, mismanaged and good-for-nothing sector. This perception has continued because the Government totally ignored the sector in 1990s. Many leaders of cooperative unions became very rich at the expense of poor farmers.

The cooperative movement has great potential in changing the lives of our rural people. In fact it is already doing so but the old negative perception continues. Why should this be the case and yet the Government has introduced many positive policies whose results are becoming obvious? Is it poor public relations by the sector?

Governance has continued to improve; more men and women of integrity are being elected in the committees and qualified people are now being employed. In fact it has never been so good since the "good old days". The 2004 Cooperative Act made it hard for criminals to continue serving in the committees or boards. The Cooperative Tribunal has speeded up justice in the sector. Fair elections are being held regularly. The members are expressing themselves more freely through the AGMs, FM radio stations, and the Government and the committees are taking these views seriously. The Cooperative officers are now, slowly but surely, getting a better deal from their employer.

Yes, we still have some problems but not in the scale that we used to have. During the last few years KCC was restructured and New KCC created as a parastatal. The immediate effect was to raise milk prices from about Sh6 to Sh25 per litre. Farmers now have cash in their pockets to meet many of their daily needs. This trend will continue and more dairy cooperatives are cropping up everywhere. Value addition will continue as we see more Githunguri Dairy Cooperatives types coming up. Meanwhile, privatisation of New KCC is on course, whereby the dairy farmer will once again own it. But this must be under a strong management team.

We all remember the days "coffee was coffee". Along the way the sector collapsed due to poor Government policies, corruption and mismanagement. The farmer became poor as payments became less and less. Coffee cartels appeared and squeezed the farmer even further down. KPCU, for all practical purpose except in name, died.

In the recent past the farmers, with the encouragement of the Cooperatives ministry, created the Kenya Cooperative Coffee Exporters Limited (KCCE). During the first season of operation, KCCE has faced many problems. Slowly but surely, it is making progress as our aim was to ensure that the farmer got a better return.

Success story

In parts of Mt Kenya , the farmer has been paid up to Sh67 per kilogramme. By controlling only 15 per cent of the exportable coffee, the KCCE initiative has "forced" even the competition to double or triple payments to the farmer. This is a major contribution by the cooperative movement. With this success story, it is now easier for farmers to trust us to restructure KPCU for their own benefit. A lean KPCU, but a more efficient one, will become another cooperative success story.

The coffee debt waivers that we are currently working on will bring financial stability to this sector. The previous write-offs did not cover the loans that coffee unions had given to their farmers. The write offs are now going to clear these loans, and the farmer may now concentrate on raising the quality and quantity of his/her coffee. This will bring wealth to the farmer and, indeed, the country.

Sugar is another sector that has, over the years, left the farmer in Nyanza and Western Kenya in a desperate state. Corruption, mismanagement, wrong Government policies have all made their contribution. That is why the cooperative sector welcomes the Government privatisation of the sugar mills. The cooperative movement hopes to play its positive role in the future success of Nzoia, Muhoroni, Chemilil and Sony.

The Cooperative movement in other countries plays a key role in agricultural extension services; horticulture; irrigation cooperative; and other areas. These are areas that the movement expects to play its role in the coming years.

The writer is Cooperatives Development minister.