Before you vote: the truth about coffee debts
Coffee Management Services managing director Kamau Kuria at the Gachatha Coffee Cooperative where he officially launched a coffee eco-pulping unit that will reduce the cost of production at the factory and increase farmers pay.
“The Committee wasted no time: we quickly agreed a debt waiver for coffee-farmers’ SACCOs and unions amounting to Sh478 million, and Sh1.7 billion on STABEX funds, through the Cooperative Bank of Kenya.
Consequently, title deeds once held as collateral by the Bank have been returned to cooperative societies and individual farmers. Currently, the Committee, the Ministry of Agriculture, Livestock and Fisheries, and the Council of Governors (COG) have together earmarked the upgrading of the Nairobi Coffee Exchange and the rehabilitation of 500 coffee factories in 31 coffee-growing counties.” - President Uhuru Kenyatta, Madaraka Day Speech in Nyeri, June 1, 2017
Did the government waive debts for coffee farmers?
Farmers owed unions, cooperatives and saccos a total of Sh4.78 billion, according to the Report of the National Task Force on Coffee Sub-Sector Reforms. The government cleared Sh4 billion, leaving Sh784 million, which was to be cleared in the 2016/2017 financial year.
In addition, farmers owed Stabex funds amounting to Sh1.7billion, which came from the European Union and were administered through the Cooperative Bank of Kenya (and interest accrued from the Stabex Funds was Sh700 million, according to the report.
In the 2016 budget statement, the Treasury Cabinet Secretary allocated Sh2.4 billion for coffee waiver and Stabex, which means Sh700 million in interest may be unpaid, based on the figures from the report.
However, Nation Newsplex confirmed that at some cooperative societies have issued clearances to individual farmers upon notification of the waiver by the government. We also spoke to the chairman of the Gikanda Cooperative Society, Mr Joseph Mukuha, who told us his cooperative had received notice from the Cooperative Bank that outstanding Stabex loans had been cleared by the government, and they should expect the their title deeds to be returned soon.
The improvement of the Nairobi Coffee Exchange and the upgrading of 500 coffee factories were both mentioned in the task force report, but there has been no budget allocation for it, and no joint communication between the national government and the council of governors is as yet publicly available on these plans.
However President Kenyatta’s claim that his government allocated funds to clear the debts owed by coffee farmers is borne out by the facts.
