Kenya is struggling to revive its ailing coffee sub-sector, which has registered a 66 per cent drop in production in the past 20 years.
According to a government report released early this year, Kenya’s production declined from 130,000 tonnes in 1988 to 45, 000 tonnes in the last season (2016/2017).
In the past five years, as other Eastern African countries including Ethiopia showed great improvement in both production and quality of coffee beans, Kenya experienced only a slight improvement, in the 2013/2014 and 2015/2016 season, which experts have attributed to favourable weather.
Even then, Kenya had the lowest growth in the region, at 3.2 per cent. Uganda had the highest at 36 per cent followed by Rwanda at 17.6 per cent and Ethiopia at 16.3 per cent.
The average growth of the coffee industry on the continent is 12.3 per cent, according to the Coffee Sub-Sector Implementation Committee chaired by Prof Joseph Kieyah to oversee the team implementing proposals of the National Taskforce on Coffee Sub-sector Reforms.
The team was appointed in 2016 by President Uhuru Kenyatta to oversee the revival and improvement of the sub-sector.
Smallholder farmers who form the bulk of coffee producers have been the most affected.
They have abandoned the crop due to poor returns, and delays in payments with waiting times of up to one year. Expensive farm inputs has over the years forced growers to replace coffee bushes with mainly macadamia or avocado, currently the leading export crops of central Kenya where most of the country’s coffee is grown.
These two crops do not require intensive labour or much capital to produce, yet they are well paying owing to their high demand especially in the European and Chinese markets.
The taskforce found out that the marketing chain is dominated by a cartel of multinational corporations.
Coffee in Kenya is mainly sold through the Nairobi Coffee Auction.
The problem is that the Coffee Directorate — the industry’s regulator — has licensed sibling companies to handle the entire coffee trade chain.
For instance, a miller who mills coffee on behalf of farmers through their co-operative societies also happens to be the marketing agent.
The former is the one who sell coffee at the auction after negotiating for prices with the dealer or marketer. The dealer also happens to be the same company acting as the miller and the marketing agent.
What has made the situation worse is that the same companies licensed to trade in coffee in Kenya are the ones that advance loans to the farmers’ co-operative societies. The societies sell coffee on behalf of farmers.
Prof Kieyah is of the opinion that societies should not be allowed to borrow money from the millers or marketing agents as this amounts to conflict of interest.
His taskforce came up with a draft to address most of the problems but officials of the co-operative societies rejected the Coffee (General) Regulations, 2016.
When the committee gazetted the regulations, co-operative societies moved to court to block implementation of the proposed regulations on the grounds that the taskforce did not involve all stakeholders.
Early this year, the committee came up with an improved draft, the Coffee (General) Regulations, 2018, that abolished double licensing for coffee traders but this is yet to become law.
Farmers will still use the same oppressive marketing structure they have been using before for the 2018/2019 coffee season.
Prof Kieyah’s reforms remain elusive.