BUSINESS

Cooperative Societies to Drive Reforms in Kenya’s lethargic Coffee Sector

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Nairobi Coffee Exchange
Nairobi Coffee Exchange among reforms made to boost farmers income and access to international markets
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Cooperative Societies have been placed at the forefront of efforts by the Kenya Government to reverse declining fortunes in the Coffee sector and restore it to the ‘Black Gold’ era of the 1970s.

In an ambitious Coffee Revival Through Cooperative Societies Programme, Kenya’s President William Ruto launched this plan in Kirinyaga recently that will see an increase in farmers’ earnings, revive all moribund coffee cooperative societies, raise coffee production levels, and position Kenya as a global coffee processing and brand powerhouse.

This programme is considered one of the most comprehensive interventions in the Kenyan coffee industry in recent years.  The plan seeks to address longstanding structural challenges that have led to a decline in coffee production, shrinking acreage, and reduced farmer participation in the sector.

While launching the programme, President Ruto said all reforms under this programme are designed to achieve one primary objective- putting more cash in the pockets of coffee farmers.

“The farmer prepares the land, plants the crop, nurtures it through the seasons, and bears the greatest risk. The farmer does the hardest work and must therefore receive the greatest reward,” said President Ruto

While Kenyan coffee is globally renowned for its quality, distinctive flavour profile, and premium prices, the sector has faced significant challenges over the past three decades.

Production has steadily declined from peaks recorded in the late 1980s, with many farmers abandoning coffee farming due to low returns, delayed payments, and rising production costs.

In several traditional coffee-growing regions, many coffee farms have been shut down and turned into real estate.

Experts attribute decline of Kenya’s coffee business to weak governance within some societies, mismanagement of farmer funds, ageing coffee trees, outdated processing infrastructure and exploitation by middlemen.

Climate change has further compounded the challenges through unpredictable rainfall patterns, prolonged droughts, and increased incidences of crop diseases and pests, raising production risks for farmers.

Major coffee growing areas such as Kirinyaga, Nyeri, Murang’a, Embu, Kiambu, and Meru counties, have farmers struggling to sustain production, deal with ageing coffee bushes and limited access to affordable farm inputs.

It is this stagnation that the Coffee Revival Through Cooperative Societies Programme intends to end and revive the sector.

A key pillar of the programme is increasing national coffee production from the current 50,000 metric tonnes annually to 150,000 metric tonnes by 2028.

To achieve this target, the government plans to expand land under coffee cultivation from 110,000 hectares to 150,000 hectares while simultaneously improving productivity at the farm level.

According to the President, the average coffee tree in Kenya currently produces about 2kg. Through improved seedlings, enhanced extension services, better farming practices, and increased access to agricultural inputs, the government aims to raise yields to at least 6kg per tree.

Millions of certified coffee seedlings will be distributed to farmers across the country as part of the initiative.

The government also plans to continue subsidising key farm inputs after reducing fertiliser prices from KSh7,500 to KSh2,500 per bag.

Ruto said rehabilitation programmes will target ageing coffee plantations in traditional coffee-growing counties while new coffee-growing zones will be established in parts of Western Kenya, Rift Valley, and Nyanza regions.

The plan also involves undertaking reforms aimed at rebuilding strong, transparent, and accountable cooperatives capable of delivering value to members.

He announced plans to modernise coffee factories through investment in eco-pulpers, improved drying systems, enhanced storage facilities, and advanced traceability technologies. The reforms are also expected to improve quality management and strengthen Kenya’s competitiveness in premium global coffee markets.

“Through the Nairobi Coffee Exchange and farmer-owned brokerages, our cooperatives can now sell Kenyan coffee directly to the world,” the President said.

The Kenya Government plans to aggressively shift the sector toward local value addition and global branding; and streamline farmer payments where at least 80% of coffee sales proceeds is paid directly to farmers. President Ruto said the Direct Settlement System has already transformed payment processes by ensuring farmers receive their earnings within five days after a sale.

The system was introduced to address historical concerns over delayed payments that often left farmers waiting for weeks or months before receiving proceeds from coffee sales.

The President said ongoing digitisation efforts will further improve transparency and reduce opportunities for corruption and exploitation by brokers.

Others measures to be undertaken include fast-tracking the Cooperatives Bill, now before parliament; and stimulating domestic coffee consumption. The government now aims to increase domestic consumption to 20% within the next five years.

The President also highlighted efforts to involve young people in the industry through entrepreneurship programmes and innovative ventures such as Coffee on Wheels mobile businesses.

Written by
JACKSON OKOTH

Jackson Okoth writes for Business Today. He specializes in capital and money markets, energy sector, manufacturing, real estate, co-operatives sector, technology and agriculture. He can be reached on email at editor [at] businesstoday.co.ke

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