Coffee farmers are set to get a Sh6 billion waiver in debt from government as part of the broader scheme to revamp the crop’s farming in the country.
President William Ruto told Kenyans living in the United States that once he returns to Nairobi, he will lead the Cabinet in approving the debt write-off to encourage farmers and make the enterprise successful.
The President is on a four-day state visit to the North American country that began on Monday.
He said the initiative will inject energy into the struggling sector and boost the livelihoods of over 600,000 farmers.
"In the next Cabinet meeting, we will approve a write-off of Sh6 billion to our farmers so that we can reduce debts on coffee farming," he said.
He said debt write-off was a shot in the arms of the ongoing coffee reforms aimed at expanding the cultivation acreage and enhance farmer revenues.
The President said his promise also included the establishment of a Sh2 billion fund to support cherry farmers, providing financial cushioning while waiting for coffee auctions, a move aimed at easing off the immediate financial pressures on farmers.
The Sh2 billion fund in question is contained in the budgetary proposals for the next financial year that is pending before the National Assembly.
MPs from coffee growing areas, mainly in Mt Kenya region, have been asking Ruto to consider bailing out farmers by discharging the debts to enhance profitability.
Kigumo MP Joseph Munyoro had asked the government to extend the same courtesy it had given to sugar farmers when it wrote off Sh117 billion debt to turn around the sector in 2023.
“Mt Kenya is a coffee growing zone but farmers are faced with many challenges. I am asking the government to set aside Sh6 billion for the purposes of bailing the sector,” Munyoro said.
The Cabinet, on October 9, 2023, signed off the sugar debt write-off after concurrence by the two houses.
However, there has been some hesitation to write off the coffee debts, with fears that some dubious claims could be made.
Cooperatives CS Simon Chelugui said in October last year that the state was doing a forensic audit of the Sh4 billion debt that coffee farmers owe various value chain players for years.
Chelugui said the audit was necessary because the state was contemplating another phase of debt waivers aimed at the sector.
“We are currently undertaking forensic audit data we have received from Co-operative Bank, co-operative unions, and commodity fund. The aim of the verification process is to ascertain the true picture in terms of the amount overdue and whether there are debts that were waived last time,” he said.
In March, deputy president Rigathi Gachagua also confirmed state’s intention to waive the debts saying the reforms were bearing fruits.
Addressing hundreds of coffee farmers in Maragua, Murang'a county after commissioning the newly constructed Murang'a Coffee Mills Factory, Gachagua assured that the Kenya Kwanza administration is on top of the issue.
"Myself and Cabinet Secretaries Njuguna Ndung'u for National Treasury and Simon Chelugui for Cooperatives will address the issue of debts," the Deputy President said.
The debts are owed by coffee farmers to financial lenders and buyers.
Gachagua added that the government has defeated the cartels and unscrupulous brokers that had infiltrated the coffee sub-sector.