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Editorials

EDITORIAL: Capital injection can revive coffee industry

The Kenya Planters Co-operative Union offices
The Kenya Planters Co-operative Union offices in Nairobi. FILE PHOTO | NMG 

The revelation by the Kenya Planters Co-operative Union (KPCU) that it had received Sh2.7 billion from the Treasury for lending to coffee farmers is good news for the struggling industry.

The funds are part of Sh3 billion that was announced by President Uhuru Kenyatta to help coffee farmers overcome financial challenges, and put more money in their pockets. The amount, to be dished to farmers as working capital, will later be recovered after farmers sell the produce by deducting the amount advanced plus a three percent interest rate.

Whilst this gesture bodes well for the coffee sub-sector, those tasked with handling the funds should guarantee proper utilisation.

There have been past incidents where public funds handed out for such purposes have been embezzled. This is absurd because taxpayers money ended up in private pockets while key economic sectors went down.

The KPCU team should ensure the Sh2.7 billion fully serves its purpose. This calls for transparency in the scheme with all the would-be beneficiaries being taken through comprehensive vetting to lock out crooks who may attempt to get their snouts in the trough.

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The coffee industry is in a dire state and revival plans such as the capital injection would be helpful if well managed. The one’s robust coffee industry which supported millions of households is now a pale shadow of its former self amid dwindling production and low earnings.

Industry data for example shows that between the early 1990s and 2011, the area under coffee in Kenya had declined by 35 percent — from 170,000 hectares to 109,795 hectares. Similarly, production has dropped from 130,000 tonnes in 1988 to about 45,000 tonnes currently as farmers abandoned the crop due to poor management of the sub-sector, compounded by poor earnings.

Many frustrated farmers have even taken to uprooting their coffee bushes in exchange for better-performing crops such as avocado. Some farmers have also opted to convert farmlands into better-paying real estate projects.

The coffee industry, however, still has huge economic potential and the KPCU should uphold financial prudence to help it regain its footing and win back the confidence of farmers.

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