Cooperatives and SMEs Cabinet Secretary Wycliffe Oparanya has acknowledged the critical role of the coffee sector in Kenya’s economy.
Oparanya described coffee as a cornerstone of Kenya's economy.
He acknowledged its dual role as a major foreign exchange earner and a vital source of livelihood for over 800,000 farmers and millions more in rural areas who depend on the coffee value chain.
Oparanya was speaking during the launch of the New Kenya Planters Cooperative Union (New KPCU) 2023-2027 Strategic Plan.
“Coffee remains one of Kenya’s leading foreign exchange earners and a lifeline for many rural households,” Oparanya stated.
He said the government has placed coffee at the heart of its Bottom-Up Economic Transformation Agenda (BETA), under the Agricultural and MSME Pillars. According to Oparanya, cooperatives play an essential role in this agenda, facilitating financial inclusion for MSMEs and empowering farmers across the country.
Oparanya further noted the vital intersection between MSMEs and cooperatives, highlighting that the majority of cooperative members are MSMEs.
These cooperatives, he explained, help farmers access resources for lending, investment, and market aggregation, ensuring that coffee produced at the grassroots level reaches both local and international markets efficiently.
According to the Coffee Yearbook 2022/23, Kenya’s coffee exports had risen to an impressive 47,957 metric tons, up from 42,858 metric tons the previous year.
This marked growth came with a significant increase in export value, which reached Usd252.12 million.
"Kenya’s coffee is in high demand globally, with our high-quality beans renowned for their distinctiveness," Oparanya said.
He also pointed out the rise in domestic coffee consumption, which saw a 19 per cent increase, with the number of coffee houses in the country expanding from 506 to 791.
These statistics signaled the emergence of a strong coffee culture within Kenya’s borders. However, despite these successes, Oparanya acknowledged the challenges facing the sector.
Coffee production had declined by per cent per cent dropping from 51,853 metric tons in the previous year to 48,649 metric tons, mainly due to unpredictable weather patterns and the cyclical nature of coffee production.
Oparanya however expressed confidence that the sector would bounce back, supported by efforts to improve farming practices and increase fertilizer availability.
"We project that production will rise to 54,800 metric tons for the 2023/24 season, as we continue to enhance support services for our farmers," Oparanya added.
KPCU’s company has set a goal to drive growth and stability within Kenya’s coffee subsector, an industry that supports over 800,000 farmers directly, and an estimated 20 million Kenyans who rely on the coffee sector for their livelihoods.
New KPCU's Managing Director Timothy Mirugi outlined the cooperative’s remarkable strides in recent years.
“We’ve reached over 415,000 farmers and disbursed Sh5.8 billion from the Coffee Cherry Fund, a crucial initiative that supports farmers with upfront payments for their coffee cherries,” Mirugi said.
The company has also seen substantial growth in milling operations, with volumes rising dramatically from just 1,108 metric tons of coffee in 2019 to 24,000 metric tons in the most recent year.
Mirugi described this growth as a clear indication of New KPCU’s revitalisation, as it continues to serve as a crucial link between farmers and the broader coffee market.
Oparanya further emphasised the government's ongoing commitment to reforming the coffee sector through a series of initiatives designed to address long-standing challenges.
These reforms include the creation of a new Coffee Policy, Coffee Bill, and Cooperatives Bill 2024, all of which seek to improve governance and transparency within the coffee value chain.
Key among the reforms is the restructuring of the Nairobi Coffee Exchange (NCE), which will now allow coffee cooperatives to participate more actively in auctions.
Additionally, the Direct Settlement System (DSS) has been implemented to reduce delays in payments to farmers, which has historically been a major issue in the sector.
"We have also expanded the Coffee Cherry Advance Revolving Fund from Sh2.7 billion to Sh6.7 billion, which has allowed us to increase payments to farmers from Sh20 per kilogramme to Sh80 per kilogramme," Oparanya revealed.
The Cabinet Secretary also emphasised the importance of technology and training in transforming the cooperative sector.
"We are committed to the adoption and utilization of technology within the cooperative movement. Shared service platforms will enhance efficiency, transparency, and accountability while reducing operational costs," he said.
He said the ministry, in collaboration with the Cooperative University of Kenya, is working on developing a comprehensive syllabus and training manuals to enhance the skills and capacity of cooperative members and directors, ensuring better service delivery to farmers.
The event attracted key stakeholders, including government officials, cooperative leaders, and industry experts, who gathered to witness the unveiling of a comprehensive roadmap aimed at revitalising the coffee industry.
