• Guaranteed Minimum Return is a price paid by the government to a farmer for an agricultural product irrespective of market conditions.
• The aim is to boost farm production and incomes, remove farm commodity surplus and shore up exports.
Image: FILE
The government has assured farmers across all 37 coffee-producing counties that it is purchasing a kilo of coffee cherry at a guaranteed price of Sh80 per kilo up from the previous Sh60.
In a statement on Tuesday, Government Spokesman Isaac Mwaura said Sh6 billion has been put into the Coffee Cherry Advance Revolving Fund for the purchase which started on Tuesday in Makueni County.
"This will ensure a Guaranteed Minimum Return (GMR) of Sh80 per kilo of coffee cherry, up from the previous non-guaranteed price of Sh60. Any surplus revenue generated beyond this guaranteed minimum price will be distributed to the farmers as a coffee cash bonus," he said.
Guaranteed Minimum Return is a price paid by the government to a farmer for an agricultural product irrespective of market conditions.
The aim is to boost farm production and incomes, remove farm commodity surplus and shore up exports.
Mwaura said the government has taken the approach to address the decline in coffee production caused by price volatility and high production costs as it seeks to boost coffee production in the country from the current 51,000 metric tonnes to over 100,000 metric tonnes by 2025.
"Tomorrow (Wednesday), the distribution will target Machakos, Kajiado and Taita Taveta Counties (at Kagundo Kainga Stadium, while on January 11, Nyeri County (Karatina Stadium), Kirinyaga County (General Kassam) and Murang’a (Ihura Stadium)," Mwaura said.
As part of its commitment to revitalise the agriculture sector, Mwaura said the government has also increased the allocation to the Agricultural Financing Corporation (KFC) from Sh2 billion to Sh10 billion.
The amount is part of the Sh267.7 billion investment the government has allocated for use in nine key coffee value chains in the 2023/24 financial year.
Mwaura said the Sh10 billion will provide farmers with access to credit at single-digit interest rates.
"These funds will further alleviate the production costs and bolster productivity in the coffee sector."
The Kenya Kwanza government has since coming to power in September 2022 been deliberate about improving the welfare of coffee farmers by getting them better prices for their produce.
Through an Executive Order issued on January 9, 2023, President Ruto tasked Deputy President Rigathi Gachagua with overseeing the implementation of reforms and weeding out cartels across the coffee sector's value chain.
The President accused the cartels of exploiting farmers by buying their produce at lower prices and selling it at huge profit margins on the international market.
Gachagua asked for prayers as he took the audacious task saying he was well aware the cartels would fight back.
“I'm requesting you to pray for me so that God leads, protects and gives me wisdom like that of Solomon in the Bible," he said.
“We will receive some kicks from them (cartels) but that will not worry us. We must restore dignity to our farmers by ensuring they get dignified pay for their produce."
In late October 2023, the DP announced that they had managed to corner the cartels.