Reforms in the coffee industry, spearheaded by Deputy President Rigathi Gachagua’s office, have marginally boosted the pricing of the commodity but are yet to deliver an improvement in the volume of production, sale, and export shipments.
The Coffee Sub-Sector Reforms Secretariat says coffee growers now fetch about 10 percent more for their coffee, with a 50-kilogramme bag now selling at an average of $227 (Sh29,373), from about $195 (Sh25,233) a year ago.
“We have witnessed notable and tangible progress with enhanced productivity, improved market access, and stringent quality control measures,” said Simon Chelugui, cabinet secretary for Cooperatives and Micro, Small, and Medium Enterprises Development, who chairs the reforms committee.
“The results are already evident, with increased yields and earnings, improved auction participation, enhanced traceability, and origin farmer linkages.” But the results are not all glam. There has been a decline in the volume of coffee sold at the local auction or directly to clients, as well as in quantities exported, following reforms that have been in effect for about a year.
Data by the Agriculture and Food Authority (AFA) shows that the country’s coffee exports dropped by 24 percent from 28,852 tonnes in the year to May 2023 to about 21,978 tonnes in the year to May 2024.
At the same time, the country’s coffee exports brought in $147 million (Sh19 billion) in foreign exchange in the 12 months to May this year, a seven percent decline from the $158 million (Sh20 billion) the commodity fetched in a similar period a year before.
The efforts to reinvigorate the Nairobi Coffee Exchange to serve farmers’ needs better have also not improved tradings at the commodity bourse. This year, 30,477 tonnes of coffee were bought at the sale down from last year’s 32,038 tonnes.
However, the reduced quantity fetched a much higher price, with the value sold at the bourse this year rising 9.5 percent to $138 million (Sh17.8 billion), from last year’s $125 million (Sh16.3 billion), reflecting a rise that farmers get in the market.
According to Mr Chelugui, among the reforms in the coffee exchange include introducing a reserve price, below which coffee cannot be sold at allowing farmers better prices for their beans.
With the war on market middlemen that were accused of exploiting farmers, the quantity of coffee directly sold has dropped by 91 percent this year, from last year’s 9,100 tonnes to 822 tonnes currently.
Direct sales fetched farmers only $5.12 million (Sh662 million) in the year to May 2024, down from last year’s $42.27 million (Sh5.5 billion), a drop of over 88 percent.
Mr Chelugui said the efforts to rid the market of middlemen were necessary to improve farmer earnings, as market brokers had been accustomed to giving farmers lower prices and selling at much higher prices in the international market.
The reforms were instigated by the government last year, with the formation of the Coffee Sub-Sector Reforms Secretariat, which is domiciled at the office of the Deputy President.
