Kericho-based Kipkelion District Cooperative Union exported earned Sh103.5 million ($908,160) after shipping 134.4 metric tonnes of coffee valued good beans.
The smallholder farmers bypassed the coffee auction and established players in the value chain to do direct sales as they take advantage of coffee reforms to increase earnings.
Legal reforms have enabled small coffee brokers like Kipkelion Brokerage Company, which is fully owned by coffee farmers to market their own coffee under the regulation of the Capital Markets Authority (CMA).
Small-scale coffee farmers in Kericho, Nandi and Bomet have nearly doubled their earnings through direct sales to a South Korean firm.
Kericho-based Kipkelion District Cooperative Union exported earned Sh103.5 million ($908,160) after shipping 134.4 metric tonnes of coffee valued good beans.
The cooperative’s chairman, Joseph Koskei, said farmers will on average get Sh116 per kilo of cherry, almost double what they have been earning by selling through intermediaries.
“The proceeds are going towards payment of 9,582 small scale farmers at an average rate of Sh116 per kg of cherry compared to an average of Sh76 at the local auction, a clear Sh43 above the local prices (56 percent increase),” Mr Koskei said.
The smallholder farmers bypassed the coffee auction and established players in the value chain to do direct sales as they take advantage of coffee reforms to increase earnings.
For a long time, farmers have complained that the coffee value chain disenfranchises smallholder growers, limiting direct sales which have benefited intermediaries more than the farmers.
Attempts to find pricing equilibrium at the Nairobi Coffee Exchange (NCE) have also been affected by its small circle of participants linked to global value chains that dictate pricing.
Legal reforms have enabled small coffee brokers like Kipkelion Brokerage Company, which is fully owned by coffee farmers to market their own coffee under the regulation of the Capital Markets Authority (CMA).
“For the first time in Kenya’s history, smallholder coffee farmers have done a complete vertical integration of the coffee value chain, displacing the predatory brokers and other greedy intermediaries who have denied us direct access to the market,” said Mr Koskei.
Coffee sector reforms have been stuck in the rut as the Agriculture ministry and the CMA fight over control of the sector while farmers miss out on price rallies that may turn around the sector fortunes.
A recent disconnect between global prices and local auction as well as the trickle down to farm gate prices is pushing farmers to capitalize on direct sales bypassing the Nairobi auction.
Farmers say they are now able to produce, mill, meet export requirements, negotiate and export their coffee across the entire globe.
