A tussle is brewing between the Agriculture ministry and the Capital Markets Authority (CMA) over the regulation of coffee trading after both parties claimed the rights on the extension of the trading rules at the Nairobi Coffee Exchange.
Agriculture Cabinet secretary Peter Munya said Thursday it is his ministry’s mandate, through the Crops Act, to extend the laws that would have ceased at the end of June, saying the CMA regulations did not involve all stakeholders and that he would seek their repeal.
He said they want a review of the Capital Markets (Coffee Exchange), Regulations 2020 and Crops (Coffee) General Regulations 2019 to end the confusion that has now left stakeholders in the coffee sector paralysed.
“If you look at the law, that transfer was not done properly because the Crops Act was never amended. The Crops Act gives the CS mandate to continue running the coffee value chain. CMA amendments originated from the Ministry of Trade but I was not party to that,” said Mr Munya.
“I signed a Kenya gazette on the extension of the trading licenses and a three-month extension of Nairobi Coffee Exchange (NCE) management committee. I will in the next three weeks present the repealed version of the regulations for public participation.”
CMA had on Monday issued guidelines on coffee trading at the NCE after its Act failed to take effect on July 1 as it had planned, leading to confusion at the auction this week.
The Capital Markets (Coffee Exchange) Regulations 2020, which were gazetted in April, gave the authority the mandate to license the coffee exchange and brokers.
The auction failed to take place yesterday after marketers did not submit relevant trading data, citing confusion over the guidelines the CMA issued on Monday.
Marketers said yesterday they did not feel that the CMA guidelines are adequate because it did not clarify some of the sticky issues.
Kenya Coffee Producers Association Thursday called for the suspension of the CMA rules until all the structures and systems are in place, including amending the Crops Act 2013.
Chairman Peter Gikonyo said the suspension of this week’s auction increased economic loss to farmers, especially for those who had borrowed loans.
“As farmers, we already have existing contracts with marketing agents. We have released our coffee to them for sale.
“The delay in selling coffee means an increased economic loss to the farmer,” he said.
Mr Gikonyo echoed Mr Munya’s sentiments, pointing out that the development of trading rules is supposed to be an inclusive process that brings together all stakeholders, urging the ministry to consider repealing the trading rules.