Kenya's coffee industry is characterised by declining production despite the fact that global production has increased by 3.6 per cent annually over the past 10 years.
"Coffee has been a prime mover of the Kenyan economy, generating incomes and millions of jobs. But the decline in production has resulted in significant losses in earnings," says a report from a task force appointed to gather stakeholders' views on how to revamp the industry.
Before the downturn, the report says, coffee used to provide 400,000 permanent jobs and 350,000 seasonal jobs. The erosion of farm incomes affected five million rural households. The collapse of the International Coffee Organisation in 1989 had a negative effect on coffee production globally, and a great deal needs to be done locally to revive farmers' enthusiasm for coffee farming.
One of the steps being considered is setting up a fund to cushion farmers against shocks such as the collapse of the ICO.
The Task Force Report on Coffee Marketing recommended that among other measures, the government establish a Kenya Coffee Development Agency (KCDA) modelled on the Kenya Tea Development Agency, to oversee the operations of the industry, put in place a Central Depository Unit to ensure prompt payment, and streamline payment and invoicing procedures.
The establishment of a KCDA is particularly important because its functions would include sourcing cheap credit and inputs.
Farmers are no longer enthusiastic about the crop. Some have even uprooted it in favour of other crops. Only affordable credit with a guaranteed grace period is likely to restore confidence among the farmers. The major costs at the farm level are management of the Coffee Berry Disease and acquisition of fertilisers. Players are urging the government to reduce taxation on inputs.
Previously, when farmers observed good crop husbandry, 70 per cent of Kenyan coffee used to constitute the higher premium grades. Today, the production has not only gone down below 50 per cent of peak production, but good quality coffee has declined from 70 per cent to 60 per cent of the harvest.
The government had pledged to revive the coffee industry in the Economic Recovery Strategy Paper for wealth and employment creation.
The East African
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