The government has waived historical debts owed by coffee farmers nationwide amounting to Sh6.8 billion.
The decision was sanctioned by the Cabinet on Tuesday in a meeting chaired by President William Ruto at State House, Nairobi.
“At the meeting, the Cabinet considered and approved the debt waiver for coffee farmers and other coffee sector reforms,” a dispatch from State House said.
“Under this programme, the meeting sanctioned the write-off of historical debts amounting to KSh6.8 billion owed by coffee farmers nationwide.”
The Cabinet directed coffee co-operatives, saccos and other creditors to submit to the Ministry for Co-operatives, within seven days, the list of all farmers who owe them money and with all the supporting documents for verification and processing of payment.
“Any fraudulent and fictitious claims, the Cabinet warned, will be dealt with in accordance with the law,” the Cabinet said.
At the same time, the Cabinet called on Parliament to fast-track the enactment of governance reforms for co-operatives to establish institutional safeguards, including the requirement that the process of borrowing by cooperatives is only authorised by farmers during annual general meetings (AGMs).
To further bolster the coffee production value chain, the Cabinet said the New Kenya Planters Cooperative Union (KPCU) will undergo modernisation in accordance with international best practices.
“Additionally, to address the concerns on the quality of coffee parchments, modern eco-pulpers will be established in all emerging coffee growing areas for primary processing, enhancing efficiency and sustainability of the sub-sector,” the Cabinet said.
The Cabinet said the interventions are aimed at enhancing the production of coffee to the 200,000 metric tonnes target by 2027.
It said the interventions will further encompass improved coffee seedlings propagation under the Coffee Research Institute (CRI).
“This will also reposition Kenya's coffee on the global stage and enhance competitiveness and contribution to the national development agenda because the crop is one of the nation’s premier exports,” the Cabinet observed.
Speaking on May 27 at the start of his four-day state visit to the US, Ruto said the waiver is part of the broader scheme to revamp the crop’s farming in the country.
Ruto told Kenyans living in the United States that upon his return to Nairobi, he would lead the Cabinet in approving the debt write-off to encourage farmers and make the enterprise successful.
He said the initiative would inject energy into the struggling sector and boost the livelihoods of over 600,000 farmers.
Ruto said the waiver would also include the establishment of a Sh2 billion fund to support cherry farmers.
The fund, he said, would provide financial cushion as farmers waited for coffee auctions, a move he said is aimed at easing immediate financial pressures on farmers.