Kenya's economy is predominantly agricultural, and the coffee sub-sector is one of the most critical enterprises in the country. However, the industry's overall performance has remained lacklustre for the longest time, with the coffee cooperatives being one of the main contributors to this stagnation.
According to the Sessional Paper No 4 of 2020, the government aims to transform cooperatives in the country by advocating for the formation of sub-sector-specific Federations to provide specialized services to their member-affiliates. This is necessary to guarantee effective service delivery to the ordinary cooperators who are members of the various types of cooperatives.
Despite the existence of a few Federations in the country, which render satisfactory services to their affiliates, the coffee sub-sector specifically stands out as one enterprise in dire need of serious reforms ranging from policy, legal, regulatory, and institutional. The various laws and regulations formulated in recent years seem to be causing more resentment on the part of cooperatives and this has a ripple effect on the industry as a whole.
One reason accounting for this scenario is the monopoly accorded to the New KPCU ltd, a state corporation, yet there are other licensed Millers in the country too! The decision to channel the fund through only one state-owned institution, oblivious of the fact that the economy is officially liberalized, is ill-advised and devoid of merit.
It is inconceivable that the treasury could be holding more than 2Billion earmarked for coffee farmers yet the existing institutional framework doesn’t allow it to be disbursed through other existing legitimate institutions. Further, the age-old controversy surrounding coffee marketing has remained a thorn in the flesh of coffee cooperatives with no compromise ever reached on the mode of coffee marketing.
My conviction is that coffee cooperatives need to expeditiously register their own Federation as stipulated in the new Sessional Paper No.4 of 2020. That way, the perennial fear and suspicion that characterizes the sub-sector that they have been ’emasculated’ by govt shall be put to rest once and for all.
The Federation could be called ‘Kenya Federation Of Coffee Cooperatives LTD (KFCC LTD)’ and would draw membership from all coffee cooperatives in the country. Its broad mandate would include, but not limited to; identify best coffee markets leveraging technology, organizing bulk importation of coffee farm inputs from the manufacturers thereby enjoy economies of scale, liaising with financiers for timely disbursement of credit facilities, when necessary, on affordable/friendly terms, putting in place a framework for hiring field extension services that are non-existent in many coffee cooperatives, creating a robust Advocacy Wing to serve as a mouthpiece for coffee cooperatives including lobbying to have progressive policies and laws that spur growth and development of the industry as a whole devoid of excessive government controls, organizing to set up a shared IT platform to service the industry, promoting modern coffee farming practices and creating a framework for “cooperation among cooperatives” in which cooperatives can benchmark from their peers locally and beyond the Kenyan boarders.
