The government has threatened to dissolve boards of coffee farmers’ co-operative societies for frustrating access to the Ksh3 billion cherry advance fund.
Uptake of the cheap loans for farmers by farmers has been low, with Agriculture Cabinet Secretary Peter Munya now blaming officials of co-operative societies. The loans attract interest rates of 3 per cent.
He claimed that officials of the saccos were refusing to sign crucial documents to allow farmers to benefit from the fund.
“From now on my office will crack the whip and dissolve these boards, it has come to our notice that the reason why many farmers are not borrowing is due to the fact that society officials are failing to sign these forms, this is unacceptable, ” he stated on Monday, January 11.
Officials of co-operative societies had previously argued that farmers were skeptical of the advance fund over its implications on who gets to mill and market their produce.
“The main reason why most of the farmers are yet to borrow these funds is due to the fact that most of them believe that channeling of the funds through new Kenya Planters Co-operative Union (KPCU) is aimed at giving the government-sponsored mill advantage of milling and marketing their crop,” Mukua Chiira, an official of a cooperative society in Mathira, told reporters in July 2020.
Munya, however, sought to dispel the claims arguing that farmers who borrowed from the fund would remain free to select millers of their choice.
“I want to tell coffee farmers that propaganda going around in their societies that by borrowing from fund that takes them back to new KPCU is untrue, no one is forcing farmers to mill their coffee so they are at liberty to choose a miller of their choice even after borrowing ” he stated.
The CS was speaking during a public participation exercise on the Coffee Bill at Karatina Stadium, Nyeri County. The bill proposes far-reaching reforms to shake up the multi-billion shilling sector.
According to the government, it is meant to solve age-old challenges in the sector by streamlining the value chain to ensure farmers reap maximum benefits.
Notably, the bill outlaws millers or marketing agents from providing loans to farmers at an interest. Instead, farmers will access the revolving cherry fund.
“The bill seeks to re-establish a coffee specific regulatory structure and a farmer-friendly legal framework providing an enabling ecosystem for development and growth.
“Our target includes refurbishing coffee factories, infrastructure development and reorganization of farmer cooperatives. In the proposed changes factories are allowed to register as stand-alone and independent one factory societies if the farmers approve,” Munya stated at a recent public participation forum in Gatundu, Kiambu Constituency.