Coffee, sugarcane farmers get boost in budget as reforms gather steam

A coffee farmer sorts coffee cherries at Kiandu Coffee Factory in Nyeri County on June 11, 2024.

Photo credit: Joseph Kanyi | Nation Media Group

Coffee farmers could benefit from an additional Sh2 billion into the Coffee Cherry Advance Revolving Fund(CCARF) if the National Assembly approves the proposals, presented by Treasury Cabinet Secretary Njuguna Ndung’u.

In his 2024/25 Budget Speech to MPs, Prof Ndung’u said the allocation would add to the Sh4 billion already allocated to the fund in the current financial year as the government steps up reforms geared towards reverting the agricultural sub-sector to profitability.

CCARF was established to provide an affordable, sustainable, and accessible cherry advance to smallholder coffee farmers. It targets farmers with land under coffee not exceeding 20 acres.

According to regulations of the CCARF, a member of a registered cooperative society or a smallholder estate affiliated to the New Kenya Planters Co-operative Union, which administers the funds, can access advance pay equivalent to 40 percent of the prevailing average sales price at the Coffee Exchange; Sh20 per kilogramme of cherry delivered; or 40 percent of the payment rate to members by a cooperative society for the past crop year.

Earlier this year, the government expanded the kitty from Sh2 billion to Sh6 billion with Cooperatives Cabinet Secretary Simon Chelugui saying at the time that farmers would be paid Sh80 per kilo, with Sh40 being paid on delivery of coffee to the factory and the remaining amount within a month after the coffee is pulped.

During the six months to last December, funds received by farmers from the CCARF kitty recorded double growth to Sh400 million compared to the Sh200 million disbursed during the 12 months to June of the same year.

Apart from cash to farmers, Prof Ndung'u proposed to pump Sh1.5 billion for payment of debts owed to sugarcane farmers with part of the money going towards dues to workers in the various public millers.

The country's sugar sector is bogged down by debt and inefficiency due to ageing machinery at the State-owned millers, including Nzoia, South Nyanza (Sony), Chemelil, Mumias, Muhoroni, and Miwani.

The Cabinet last October approved a Sh117 billion debt write-off for six struggling public sugar companies amid plans to privatise them.

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