This archive report was first published on 27 September 2019.
Published on September 27, 2019, a Sh3 billion pilot project aimed at speeding up coffee payments has hit a snag. The project, dubbed the Cherry Advance Scheme, was launched in May 2018 in Nkubu and was modeled on the Ethiopian practice where farmers are paid for coffee delivered to their factories at the end of every month.
Under the scheme, farmers were paid an advance of Sh20 per kilogramme for deliveries made by the tenth day of the subsequent month, while their factories received Sh3 per kilogramme of cherry received within the month to run their operations.
However, the programme has stalled after Meru County Coffee Millers Union shifted the burden of interest payments to farmers. Co-operative society leaders are now pulling out of the scheme, citing the added cost burden.
‘The millers informed us that societies would begin to pay interest for the advances drawn from the Co-operative Bank of Kenya this year, which we found untenable,’ said Genson Mbaabu, the chairman of Gikongoro Coffee Farmers Co-operative Society in South Imenti.
Meru Coffee Millers Union general manager, Duncan Marete, defended the plan to pass on interest for the advance payments to farmers, saying it was lower than normal bank rates.
