- Coffee Cherry Advance Revolving Fund was established to provide affordable, sustainable and accessible cherry advance to smallholder coffee farmers.
- CCARF fund does not accrue any interest and fFarmers are only charged a one-off 3 per cent administrative fee.
Image: PCU
President William Ruto has advised coffee cooperatives to desist from seeking loans from commercial banks and instead borrow from Coffee Cherry Advance Revolving Fund.
Coffee Cherry Advance Revolving Fund was established to provide affordable, sustainable and accessible cherry advance to smallholder coffee farmers with land under coffee not exceeding 20 acres.
Speaking in Murang’a county on Friday, the President said loans from banks have become a burden to farmers.
“Coffee cooperatives that have taken big loans from banks are hurting farmers,” he said.
The President said the government has set aside money to pay these loans to ease the burden on farmers.
“In the current budget, we have set aside funds to pay these loans,” he assured.
Ruto reiterated that cooperatives should not go to banks where they pay 20 per cent interest onloans.
“We have set aside Sh3 billion. These cooperatives can borrow from Cherry Fund whose interest is three per cent,” he explained.
New Kenya Planters and Cooperative Union is mandated to manage and administer the fund to coffee farmers as per the Public Finance Management Act (Coffee Cherry Advance Revolving Fund) Regulations 2020.
The first disbursement at factory level is Sh40 per Kg of cherry while second disbursement at parchment level P1 is additional Sh40 per Kg of cherry.
P2 gets additional Sh20 per kg of cherry, P3 additional Sh10 per kg of cherry and PL and Mbuni are not eligible for additional advances.
CCARF fund does not accrue any interest and fFarmers are only charged a one-off 3 per cent administrative fee.
In Kenya, a coffee co-operative society is a licensed and registered group of pulping stations and wet mills.
Each co-operative collectively markets all of the coffee produced by its members, but it also generally represents its members in wider discussions, including when trading with the Nairobi Coffee Exchange.
Co-operatives organise the processing, grading, packing, transporting and marketing of members’ coffee – with the latter sometimes including the support of marketing agents in the country.
Another significant role that co-ops play in the Kenyan coffee industry is connecting farmers to traders.
Co-operatives decide on the price that farmer members receive, which is paid per kilogramme.
The farmers receive this money from marketing agents after their coffee has been purchased.