Coffee farmers under the National Coffee Co-operative Union (NACCU) now want the government to intervene and stop the issuance of milling licenses to entities that have buying permits.
This comes amid concerns that “cartels” are out to frustrate the State-led reforms in the industry, with a section of brokers in the value chain said to be unsettled by the new regulations, which give farmers direct access to the auction.
In the latest developments, NACCU has raised concerns over the licensing of a section of commercial millers against the set rule.
For instance, Kiambu County government is said to have licensed Sasini PLC Millers and Kofinaf Company Limited, which both have affiliate entities holding buyers licenses.
According to NACCU, Sasini PLC Mill is affiliated with Sasini (K) LTD who holds a buyers licence issued by the Agriculture and Food Authority (AFA) and have actively been participating in the auction as buyers.
Kofinaf Company Limited mill is affiliated to Coffee Management Services (CMS) and C.Dorman Limited, who handed over their management to CMS, a sister company to C.Dorman who are licensed as buyers.
The move, NACCU says is in direct contravention of the Crops (Coffee) (General) Regulations 2019.
The regulations stipulate that a holder of a coffee buyer’s licence or any other entity associated with such holder shall not be licensed as a commercial miller, broker, roaster, agent or warehouseman.
The union whose members form 70 per cent of the coffee producers in the country have since asked Deputy President Rigathi Gachagua to direct AFA and the Coffee Directorate, to suspend the coffee buying licences and activities of Sasini (K) LTD and C. Dorman, with immediate effect.
“This is high-level impunity,” NACCU chief executive Festus Bett said.
The union wants the DP, who is leading coffee reforms in the country, to also direct an inquiry the licensing.
“Could there have been commercial benefits or incentives between the licensee and the officials of county government? We also ask the DP to direct an
investigation of how CMS Mills Eldoret obtained a commercial milling licence from Uasin Gishu County Government, while they are affiliated to C.Dorman Ltd already licensed by AFA as coffee buyers,” Bett added.
Meanwhile, NACCU has called on the Kenya Coffee Producers Association (KCPA) to refrain from frustrating the ongoing government-led reforms in the sector.
KCPA had this week indicated that farmers were facing delays including in payments.
“Some of the unexplained settlement delays date back from sale 10 done on December 19, 2023 to sale 20 on March 12, 2024,” KCPA chairman Peter Gikonyo said.
However, NACCU has dismissed the claims saying the Capital Markets Authority’s oversight over the auction and payments has turned around the sector.
“Our members are collaborating with Nairobi Coffee Exchange, CMA , government through Council of Governors and the Cabinet Secretary for Cooperatives and MSME to ensure full implementation of the Direct Settlement System (DSS) by The Co-operative Bank,” Bett said.
In January, Cooperatives and MSME Development CS Simon Chelugui said the government would not relent on the coffee reforms being led by the DP.
The DP has been vocal on the reforms, warning “cartels” that their time was over.
"Dignity of farmers who toil in their farms only to reap peanuts from their produce will be returned and coffee made the black gold that it was for years," Gachagua recently said.