New coffee regulations will not be operational this year following a request by those who pleaded to be given one year to prepare for the change.
According to the chairman of Coffee Sub-Sector Implementation Committee (CSIC) Joseph Kieyah, players who include millers, marketers and exporters as well as the Nairobi Coffee Exchange, which manages the coffee central auction said they could not immediately comply with the rules.
In the Coffee (General) Regulations, 2018 draft, companies trading in coffee cannot hold multiple trading licences, which has been the case.
Sibling firms have been securing trading licences using different names. So, when they converge at the central auction where most of the country’s coffee is sold, they dictate prices.
Already, the Coffee Directorate, which is the industry’s regulator, has issued trading licensing to the same players who have been manipulating coffee prices at the central auction using the old rules developed in 2002.
Nairobi Coffee Exchange, which manages the central auction is also to be restructured as proposed in the new rules the National Task Force in Coffee Subsector Reforms developed.
“The exchange has no legal backing and in the new regulations, it is supposed to be regulated by the Capital Markets Authority,” Kieyah who also chaired the national task force told us last week.
He said presently, the NCE is placed under the Coffee Directorate, the industry’s regulator arguing that it is supposed to be an independent body.
“We agreed to give them (the players) one year as they requested,” he said. The CSIC chairman had been quoted saying they expected the new rules to start operating from the month of September before the beginning of a new coffee year.
2018/2019 season started at the beginning of this month and farmers are busy harvesting their coffee apparently expecting to sell their produce under a new law.
Prof Kieyah, nevertheless confirmed that he had already handed over the Coffee (General) Regulations, 2018 draft, to the clerk of the National Assembly ready to be tabled for debate before the House.
His team had earlier held meetings with both Parliamentary Committee on delegated legislation and their counterparts from the senate to brief them on the draft.
Attempt to have the proposed law gazetted last year failed when National Farmers Federation (NFA) backed by the then Council of Governors moved to court arguing that the rules developed by the National Task Force in Coffee Subsector Reforms, which Prof Kieyah had chaired did not include views from all stakeholders.
Consequently, High Court judge, Justice George Odunga nullified the rules and directed the Agriculture Cabinet Secretary to ensure the new regulations are passed within 30 days of the sitting of the present Parliament.