The National Coffee Co-operative Union (NACCU), an umbrella body representing all the Coffee Co-operative unions across the Country. It draws its membership from all 31 coffee growing counties in Kenya. The Union was formed to enable members synergize their efforts when addressing common challenges as well as enabling them seize opportunities in production, processing, and marketing of coffee among other areas of common interest.
NACCU is saying that it’s witnessing with shock and pain unprecedented and prevailing low coffee prices that has not been witnessed over the last 10 years in Kenya, where a AA 50kg bag has been selling at over USD 400 and has currently dropped to USD 200.
Through the circular seen, the Nairobi Coffee Exchange issued a statement to the public on 15th November 2022 titled “The drop in Coffee prices statement”. This statement attempted to explain the reason behind the low prices, but NACCU states that they found the statement extremely unfortunate saying that the attempt was justify an artificial pricing mechanism that continues to exist in the Nairobi Coffee Exchange due to the collusion of players within the auction where coffee marketing agency companies are owned by the same coffee buying companies. “How can the same entity set the selling price and at the same time the buying price and expect a fair price for the farmer? While Coffee Farmers are locked out of the Exchange floor?” NACCU statement reads.
A National Task Force on Coffee Sub Sector Reforms was established on 4th March 2016 vide Gazette Notice No.1332 by former President Uhuru Kenyatta to conduct a rigorous value chain analysis on coffee subsector. Kenyatta exhorted the Taskforce to always ask (a) “How will the small-holder coffee farmer maximally benefit from his coffee? And (b) How can the coffee value chain be made more efficient and affordable for the smallholder farmers?”
As part of the regulatory reforms, the Taskforce developed Two (2) sets of regulations which were passed by the National Assembly and the Senate.
i. Crops (Coffee) (General) Regulations, 2019 gazette by the Cabinet Secretary, Agriculture, Livestock, Fisheries and Irrigation on 1st July 2019 vide Legal Notice No.102
ii. The Capital Markets (Coffee Exchange) Regulations, 2020 gazette by the Cabinet Secretary of the National Treasury and Planning on 3 rd April 2020 that removed the barriers to farmers trading at Nairobi Coffee Exchange and direct sales.
Subsequently, the Capital Market Authority (CMA) licensed several Coffee Cooperative Unions to trade at Nairobi Coffee Exchange namely:
i. United Eastern Kenya Coffee Marketing Company- Machakos Coffee Co-operative Union.
ii. Meru County Coffee Marketing Agency Limited- Meru Coffee Co-operative Union.
iii. Kipkelion Brokerage Company Limited- Kipkelion Coffee Co-operative Union.
iv. Mt Elgon Coffee Marketing Agency- Mt. Elgon Coffee Co-operative Union
v. Muranga County Coffee Dealers Limited- Murang’a Farmers Co-operative Union
The union however says that its Unfortunate, the former Cabinet Secretary for Agriculture, Livestock, Fisheries and Co-operatives, Hon. Peter Munya without involvement of Parliament amended the regulation under Legal Notice No.101 dated 9th June 2022.
Through the amends made, the union is blaming the action terming it as a stumbling block leading to coffee Co-operatives being locked out from the Nairobi Coffee Exchange despite having been duly cleared to participate on the trading floor by Nairobi Coffee Exchange and being duly licensed by the Capital Markets Authority.
The coffee farmers union is now making pleas to Kenya Kwanza reigns to stay on its focus to play the role of safeguarding its pleas made on the focus on Agriculture as major pillar of Kenya Kwanza Manifesto. NACCU is now drawing attention to fact that the on-going coffee reforms is a classic example of the bottom-up approach. It is farmer-centric with an overall goal of ensuring coffee farmers are paid fairly and on time.
However NACCU now its saying that its implementation is held hostage by dominance of monoposonistic conduct of a few buyers who collude with millers and marketers over the coffee prices. This cartel-like behavior that has bedeviled the coffee sector and denied our rightful share of coffee revenues.
NACCU is now requesting the President to instruct Nairobi Coffee Exchange to allow the Coffee Co-operative Unions that have been licensed by The Capital Markets Authority to sell their coffee directly at the auction floor, implementation of The Crops (Coffee) (General) Regulations, 2019 and The Capital Markets (Coffee Exchange) Regulations, 2020, fast track the Annulment of the illegal Crops (Coffee) (General) (Amendments) Regulations 2022 which were illegally gazette by former Cabinet Secretary for Agriculture.
NACCU is also extending its requests to the newly appointed Cabinet Secretary, Ministry of Agriculture to prioritize the submission of the Sessional Paper 2022 to the Cabinet for approve thereafter tabling the National Assembly and Senate for concurrence and adoption and further asking Parliament to prioritize The Coffee Bill, 2020 (Senate Bill No.22) which was passed by the senate on 5th August 2021. The union laments that the bill captures all it’s aspirations saying that they were involved by the Senate during public participation.
Finally the NACCU recommends the president to fast track the full implementation of the pending coffee reforms through coordination of the Coffee Subsector Reforms Implementation Standing Committee (CSRISC) nested under the Presidency; demand an independent thorough analysis on why coffee prices has significantly dropped and its implications.
