Liberalisation to blame for fall of Kenya’s coffee sub-sector

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NAIROBI, Kenya, Jun 27 – The collapse of the once booming coffee business in Kenya is to be blamed on its liberalisation by the IMF in the 1990s, says Newton Nderitu, a member of a taskforce appointed by President Uhuru Kenyatta to review the entire coffee value chain.

According to Nderitu, the government of the time made bad decisions which included failing to do a feasibility study on the impact liberalisation would have on the sector.

Overview
  • According to Nderitu, the government of the time made bad decisions which included failing to do a feasibility study on the impact liberalisation would have on the sector.
  • “In 1970s and 80s, coffee was a booming business but currently its one of the worst businesses a person can engage in as it does not have good returns. Everyone is therefore abandoning it for other ventures. Allowing liberalisation was one of the terrible steps the government of the 1990s took,” he explained.
  • Liberalisation meant coffee growers could no longer regulate their own produce following the introduction of marketing agents and coffee millers who ultimately crippled the sub-sector.

“In 1970s and 80s, coffee was a booming business but currently its one of the worst businesses a person can engage in as it does not have good returns. Everyone is therefore abandoning it for other ventures. Allowing liberalisation was one of the terrible steps the government of the 1990s took,” he explained.

Liberalisation meant coffee growers could no longer regulate their own produce following the introduction of marketing agents and coffee millers who ultimately crippled the sub-sector.

“With liberation came the mushrooming of marketing agents and coffee mills among other various players. This brought down coffee prices and coffee production,” he said.

The country produces between 40,000 to 50,000 tonnes of coffee per year, down from 130,000 per year produced in 1987 and 1988.

“The marketing agents for instance, come in after a farmer has grown coffee, milled, graded it and classified, he comes and takes the information about the coffee and bags between 2 to 3 percent of the gross sales which is a lot for someone who hasn’t toiled as much. What is worse is that he is also the first person to be paid because the money is given to him while the farmers have to wait for many months.”

READ: Coffee sector faces revival after Task Force recommendations

Hence, the taskforce recommends a raft of measures which include the introduction of a central depository unit where they can get their money. There, farmers will be paid up to 85 percent of the entire amount made. This would also ultimately mean the end of marketing agents.

Other measures include introducing a subsidy programme, a cherry advance fund and the enactment of new coffee sub-sector regulations among others to revive the sub sector.

There will also be a provision of planting materials and research and rehabilitation of pulping stations which will include the digital weighing machines, ICT electrification and piping of clean water.

Both the national and county governments are also to jointly undertake the capacity building component with the national government contributing Sh200 million and coffee growing counties contributing Sh3 billion under the recommended steps

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About Nelly Niyonzima

For Africa, International Relations, Geopolitical Trends and Strategic Issues.
This entry was posted in Africa, Africa Economy, East Africa, Industry Sector and tagged , . Bookmark the permalink.

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