Stagnation in coffee sector hurting farmers, say Sacco officials

Officials of a Murang’a Sacco have expressed concerns over the challenges facing the coffee sector, saying they are greatly affecting farmers.

The officials of Amica Sacco, which has a large membership of both coffee and tea growers, said the huge amount of coffee being held by mills is putting farmers and the institutions that work with them in jeopardy.

Sacco CEO James Mbui said the stagnancy of the sector has put a financial strain on farmers and should be resolved urgently.

Coffee farmers, he added, form the backbone of the Sacco and the uncertainty facing the sector has left many players worried.

“We are staring at very uncertain times as most coffee co-operative societies are yet to sell their produce,” Mbui said.

He was speaking during a special annual general meeting held in Murang’a town on Wednesday.

Mbui appealed to the government to have the sector streamlined and ensure the smooth marketing of coffee.

He said some societies have embarked on borrowing funds as they anticipate selling their coffee early next year.

But the confusion that has engulfed the sector, he said, has made it difficult for financial institutions that support farmers to plan their businesses.

Mbui said economies that rely on the crop could be devastated should the government fail to remedy the situation soon.

Implementation of new regulations in the coffee sector that separate the roles of marketers, millers and other players have occasioned delays in selling of the produce.

This has in turn caused some coffee societies to hold on to their produce over fears of attracting poor prices from the few licensed marketers who are operating.

Some stakeholders have expressed concerns that the millers could be fighting the reforms being implemented by the government by failing to offer their services or quoting low prices.

In August this year, only 197 tonnes of coffee were traded at the Nairobi Coffee Exchange compared to the 4,380 sold at the same time last year.  The prices were averaging $183.41 this year compared to the $266.32 it fetched last year.

With more than 50,000 farmers as part of its membership, Amica Sacco has said the discontinued flow of their income will disadvantage its members, especially with the current high cost of living.

Mbui said members were already struggling to stay afloat and the current economic times have negatively affected their savings in financial institutions.

The high cost of living, he said, has raised business costs and reduced members’ disposable income which has adversely affected their ability to save and acquire loans.

He, however, noted that the Sacco has put various measures in place to support members such as the adoption of digital services that enable them to access services at the comfort of their homes or businesses.

Mbui said the firm’s projects raised revenue amounting to Sh1.35 billion against an expenditure of Sh1.05 billion.

“The key drivers for our next year’s budget are loan management, cost management, digitisation and membership growth, and we hope next year will be favourable,” he said.

The coffee sector supports more than 800,000 farmers, with another five million employed in the coffee value-chain.

Last year, the crop raked in Sh27 billion, up from the Sh17 billion it made in 2021.