Economy

Governors seek control of coffee advance funds

coffee

A coffee farmer in Nyeri. FILE PHOTO | NMG

Summary

  • CoG says the Coffee Cherry Advance Fund Regulations 2019 published last month for public review “do not recognise the role of county governments in the development of the coffee subsector.”

Governors in the 31 coffee growing counties have faulted the proposed Coffee Cherry Advance Fund rules saying they should be amended to hand its management to devolved units.

The Council of Governors (CoG) has written to the Cabinet Secretary (CS) for Treasury Ukur Yattani saying the Coffee Cherry Advance Fund Regulations 2019 published last month for public review “do not recognise the role of county governments in the development of the coffee subsector.”

They want the management of the fund to be two-tiered system with a National Advisory Board appointed by the CS and County Cherry Revolving Fund management committee appointed by the respective county governor.

“With agriculture and trade being devolved functions, it is imperative that the county government play a leading role in the management of the fund for the benefit of coffee farmers in all the growing counties,” the letter to the CS dated January 30 read.

CoG further recommends that the funds be shared with counties on pro-rata basis based on the cherry productions.

“This is to ensure that there is equality in terms of ensuring that all the farmers benefit from the funds,” read the letter.

The 31 county bosses want a sub-regulation introduced to the source of the cherry fund which was limited to monies appropriated to Parliament, recoveries from administration costs, grants, bequests and gifts to include interests earned from investment and loans disbursed by the fund.

They also insist that the initial capital of the fund should be Sh3 billion as appropriated by the national government in the last financial year.

This come after reports emerged that farmers will receive Sh2.7 billion after Sh300 million was deducted to offset debts owed by the growers.

“It is important that the Cherry Advance Revolving Fund should include interests earned from investments and loans disbursed. We also propose that the initial capital of the fund be clearly provided for in the regulation,” read the letter.

The CoG further says it doubts the farmers’ relationship to the new KPCU which has been given the mandate of administering the fund.

They point out that there is limited and no publicly available information on who owns the new KPCU, its assets and liabilities and its capacity to administer the fund.

“From a legal point of view and contrary to the laws of fair competition, farmers are being forced to join the new entity to benefit from the Fund even though there are other legally licensed mills, both commercial and grower-owned, who carry out the milling functions,” it points out.