Deputy President Rigathi Gachagua rings the bell when he presided over the re-opening of the Nairobi Coffee Exchange Auction at Wakulima House/KPCU, Nairobi on August 15, 2023. PHOTO | DPCS
Farmers will now be allowed to sell their coffee directly through the auction after the State moved to cut off the brokers blamed for profiteering.
This follows the reopening of the Nairobi Coffee Exchange (NCE) auction on Tuesday, a month after it was suspended following confusion over the issuance of trading licences by the government.
The move to have farmers sell their coffee at the exchange will hurt brokers, denying them the fees they make in every transaction.
“Once we get the prices right, once we remove the middlemen and the farmer is empowered the prices will be good, we will export and get foreign exchange earnings and sort our economy,” said Deputy President Rigathi Gachagua, who called out the cartels in the coffee sector during the reopening of the NCE in Nairobi on Tuesday.
The coffee exchange faces several headwinds upon reopening as some major millers and marketers opted not to participate in the auction.
This has seen only 2,705 bags of coffee put up for sale.
“My ministry will work very closely with the cooperative sector to ensure the extension service is taken to the growers to learn proper crop husbandry, which is key to enhancing productivity,” said Agriculture Cabinet Secretary Mithika Linturi.
“This will help us raise the productivity from 2 kilograms per bush to increase to a target of 80 and more.”
No trading had taken place at the auction since July 6, when the current marketing season resumed which saw farmers left with piles of unsold coffee beans.
The State moved to shake up the issuance of trade permits to various players in the coffee value chain.
Players in the industry blamed the suspension on the government’s decision to suspend coffee brokerage and marketing licenses pending reforms in coffee sales.
Kenya’s coffee is much sought after by roasters and blenders and is exported internationally.
The international prices are used as a benchmark for the local price at the NCE.
The sector has seen a slump over the years as farmers abandon farming for other lucrative ventures with higher returns such as real estate of other crop framing such as avocado.
“We are also doing reforms on the cooperative sector because there’s a problem, many society sector officials have been captured by these marketers and are on their payroll,” said Mr Gachagua.
