The National Coffee Cooperative Union (NACCU) has faulted a section of coffee marketers for seeking a review of coffee reforms just months after the Coffee Regulations 2019 came into force in January this year.
According to the union, the regulations which were gazetted in June 2019 and which are being opposed by the group claiming the implementation was rushed, have given coffee farmers the power to produce, process and sell their coffee to buyers directly and any planned review of the reforms could be detrimental to farmers’ income.
“The regulations that are being implemented now are very clear, who is supposed be a miller, a marketer and who is supposed to be a buyer. The main purpose of the reforms is for the farmer to take full control of the coffee,” said Francis Ngone, NACCU Chairman.
In the current regime, the Agriculture and Food Regulatory Authority is mandated to license coffee buyers while county governments are responsible for licensing millers. The Capital Markets Authority on the other hand has been charged with licensing coffee marketers on the Nairobi Coffee Exchange (NCE).
The volume of coffee auctioned on the NSE has recently dwindled as firms seek to acquire new licenses by June this year following the transition from old regulations.
While 121 buyers have been licensed by AFA, the union which represent an estimated 800,000 smallholder coffee farmers are now counting losses as they have been unable to take their produce to the NSE for auction given that only 58 buyers have been registered to buy coffee on the NCE.
“About 75 buyers have been licensed by AFA have refused to come to buy our coffee. This is major and is a way of sabotaging us,” Ngone added.
On Tuesday, during a meeting convened by the Agriculture and Food Authority (AFA) it emerged that the government plans to review the regulations which were gazette in 2019 in order to allow multiple licensing of coffee firms, a move NACCU said risk derailing reforms given that farmer also had little input during the meeting.
“The new regulations have come to help the farmers, first of all to increase production, get price discovery and appreciated the market,” said Lucy Murumba, CEO NACCU.
Through a review of the Coffee Bill 2023 currently in its third reading in the National Assembly, the government plans to allow firms to have multiple licenses which if adopted, AFA will have powers to single firm with milling, marketing and buying licenses separately.
Millers also said they stand to lose about Ksh 200 billion and layoff more than 18,000 workers as a result of the licensing standoff.