KPCU gets Sh2.7bn for farmers in revival plan

The Kenya Planters Cooperative Union (KPCU) has received Sh2.7 billion from the Treasury for lending to coffee farmers as the Government moves to revive the collapsing sector.

KPCU chairman Henry Kinyua said the cherry advance levy fund, which is to be given to farmers as a working capital as they await for their earnings from marketers, will be available to them starting next month.

The funds are part of Sh3 billion that was announced by President Uhuru Kenyatta to help coffee farmers overcome financial challenges, and put money in their pockets.

“We expect that regulations will be gazetted in the next one week or so, already Sh2.7 billion has been credited to our account and we are ready to start the distribution,” said Mr Kinyua.

Ms Muthoni Wangai, a director with KPCU said farmers who have already supplied coffee that is being milled at the moment will be eligible to apply for the funds.

Cherry advance levy was announced by President Kenyatta in March, 2018, and is aimed at helping farmers meet financial obligations after harvesting crop.

But its implementation was delayed, prompting Mr Kenyatta last month to push for it as part of a stimulus package aimed at boosting farmers’ cash flow in a soft eceonomy.

Normally, farmers harvest and sell crop through co-operatives and have to wait for more than a month before payment.

But the cash injection will change this. The government will later recover the funds after farmers sell the produce by deducting the amount advanced plus a three percent interest rate.

“The first item to be recovered after the coffee has been sold is the amount that we will have advanced to farmers so that we can give it to more growers given that it is a revolving fund,” said Ms Wangai.

The amount to be given to farmers will be determined by the quantity of coffee that has been supplied, either for milling or for sale, at the Nairobi Coffee Exchange.

These reforms are designed to boost production, reduce the cost of processing and milling as well as transaction costs at the auction market.

Kenya’s production has significantly dropped when compared with her peers in the region with Uganda, which was at par with the country in the previous years now widening the gap.