Coffee farmers can now be paid in dollars or shillings – CS Chelugui

The government has made a provision for coffee farmers to choose whether they want to be paid for their products in dollars or cash.

Cooperatives and MSMEs CS Simon Chelugui said by allowing the farmers to choose the payments’ currencies, they will be able to get their payments at rates that they can determine and negotiate.

“These rates are never fixed, but cartels used to sell farmers’ coffee when the dollar has gone up yet they pay farmers peanuts to maximize profits,” Chelugui said.

Chelugui spoke when he launched the Coffee Cherry Advance Revolving Fund distribution and coffee production sensitization program at Kainga grounds in Kangundo, Machakos County on Tuesday.

“The dollar has gone up apparently. So, we shine when the sun is high and the time for farmers is now when the dollar is trading at Sh159. We should maximize this as farmers,” Chelugui said.

“That’s what we are pushing through the direct sales settlements. That’s where we will find the money,” he said.

The CS said President William Ruto’s administration had allocated Sh6.7 billion to coffee production across the country.

He noted that of the Sh6.7 billion, Sh2.7 billion was allocated by the state in the last budget while the parliament passed an additional Sh4 billion in the recent supplementary budget.

Chelugui said with the budgetary allocation towards cash crop production, and considering where farmers have come from, they analyzed and looked at the production costs alongside the international market and came up with a regulated price for a kilogram of coffee.

He said that the government had settled on a kilogram of coffee to be bought from farmers at Sh80, up from Sh20.

“Today I’m publicly and officially announcing here in Machakos as I officiate the launch of New Cherry Fund at Sh80. Now, if a farmer takes his coffee to a factory such as Misakwani, for instance, 10kgs, you will be paid you will be paid Sh400 at the factory,” Chelugui said.

Chelugui said that was the meaning of the Sh40 advance paid to the coffee farmer.

He said if the coffee is processed and taken to a coffee mill, the farmer will receive the Sh40 balance per kilogram bringing a total of Sh80 between the time one harvests the crop and when it reaches the mill.

The CS said the processing period shouldn’t go beyond one month.

“Sh40 on arrival at the primary factory and Sh40 on arrival at the mill, bringing a total of Sh80,” Chelugui said.

He said the government was ready to take the risk of paying the farmers Sh80 per kilogram in case coffee prices drop below Sh80 in the international market.

Chelugui said for the coffee societies, the government was making a provision for administrative costs such as power and lighting, labour and utilities.

“There is now a provision so that we promote and sustain our societies. We also need to make the administrative provisions so that all these farmers can begin new lives,” he said.

He said if the coffee price shoots for instance to Sh100 per kilogram, Sh20 will be returned to farmers as a bonus.