How to rescue Kenya’s coffee sector

I maintain that the administration of President William Ruto has not deeply thought through what it must do to rescue the coffee industry to make it profitable to small-scale farmers again.

The first thing they did was to transfer the entity that has been driving the reforms — the Coffee sub-Sector Standing Implementation Committee —from Harambee House and to put it in a docket under the Deputy President, Rigathi Gachagua.

The much-hyped stakeholder’s conference presided over by Gachagua, held in Meru in March, turned out to be a forum for regurgitating conventional wisdom and rehashing existing knowledge, especially the recommendations.

As for me, the most eye-catching happening at that Meru meeting was the performance and speech by Embu Governor Cecily Mbarire, who bashed cartels and commercial coffee marketing agents.

In the wake of the Meru meeting, the only significant development to occur was the appointment of an eleven-member inter-ministerial steering committee led by Co-operatives Cabinet Secretary Simon Chelugui to drive the reforms.

Even though the docket was left under Mr Gachagua, the subtle signal was that the actual job of driving the reforms had been moved to Mr Chelugui’s ministry.

The fate of the Coffee Sub-Sector Reforms Standing Committee which was inherited from the regime of former President Uhuru Kenyatta remained unknown.

What Kenya wants is a comprehensive coffee industry rescue plan complete with clear spending plans and funded budgets. It is now the time to take the process beyond the grand rhetoric about breaking coffee cartels — beyond moralistic exhortations on multinational trading companies to agree to pay a decent price to the coffee farmer.

The coffee reform process and rescue plan must move beyond tinkering with laws and institutions.

As you follow the events, you are left with the distinct impression and feeling that the coffee rescue plan has given disproportionate emphasis to reforming trade and marketing.

We have a transparent commodity exchange. We are hearing how unions are getting licences to trade and market coffee.

The Kirinyaga Co-operative Union announced it had registered its own brokerage subsidiary. There was the news that some cooperatives in Kipkelion had sold their crop directly to South Korea.

The point is this. Rescuing the coffee industry will require more than a few changes on how we trade. A meaningful rescue plan will take more than just bashing coffee marketing agents.

The way markets work all over the world is that a relatively small number of players — generally those with access to capital— tend to benefit more from transactions.

Protecting farmers from exploitation is a good thing. But a sustainable and working marketing system only works in systems where both the poor farmers and rich marketing companies can benefit.

I will take the government seriously when I start seeing tangible interventions from the supply side of the equation. I want to see timelines for the establishment of a subsidy to finance production and extension services. In the context of dwindling government revenues and unsustainable budget deficits, where is the money and budget for supplying affordable farm inputs, rehabilitation of pulping stations, and provision of planting materials going from?

The smallholder coffee sub-sector in Kenya badly needs a well-funded cherry advance payments system. Where is the money, the plan, the timelines — the implementation matrix?

Today, the policy is not serious about reviving coffee because the contemporary Kikuyu elite no longer have a big stake or interest in the crop.

The contemporary Mount Kenya elite have shifted interests to banking and insurance, the stock exchange, investment banking and to the lucrative property development projects.

Here are a few examples to support my theory.

John Michuki, the late former minister, cleared his coffee estate many years ago to develop prestigious golf courses.

Zachariah Gakunju sub-divided and sold his massive coffee farms on Kiambu Road in Nairobi to pave the way for what is now Runda Estate.

Stanley Githunguri sold his massive Kiambu Coffee Estate to give way for property development.

And, former Attorney General James Karugu, also reportedly cleared a major chunk of his massive Kiambu farm to make way for a property development project.

Today, the rage in Central Kenya is Tatu City, Two Rivers and Thika Greens.

Contemporary agricultural policy has neglected coffee because the big boys shifted their interests, leaving coffee to the rural-based poor farmer with little capacity to influence government policy.

The writer is a former managing editor, The East African.