By James Odhiambo

Kenyan coffee farmers have received their first direct payments this month for coffee sold via the Nairobi Coffee, in a government move to fix the proportion of the sales income going to cooperatives at 20 per cent.

The Direct Settlement System (DSS), launched by the New Kenya Planters Cooperative Union (New KPCU), paid July proceeds from the Nairobi Coffee Exchange directly into farmers’ bank and SACCO accounts.

“Yes, for we have made direct payments for the month of July through the DSS, which we boast of having a timely and prompt payment to our coffee farmers directly to their bank accounts and their respective SACCOs,” said Eunice, a representative from KPCU’s Farmers Welfare and Action Plan department.

Previously, all payments were made to cooperatives, which then decided what portion to pass on to farmers. Under the new system, cooperatives now receive 20 per cent of the proceeds, and farmers receive 80 per cent directly.

Alongside the DSS, the government has also launched two other coffee revival measures,  the Coffee Cherry Advance Revolving Fund (Cherry Fund) and a pulping machine programme, but both remain stalled during 2025.

The Cherry Fund, established to provide affordable advances to smallholder coffee farmers, had disbursed Sh1 billion to more than 90,000 farmers by June 2023. Since then, a new target has been set to disburse Sh6 billion by 2027, with a total aim of Sh10bn of funding, but this expansion has not yet begun.

“We still have issues with the Cherry Fund as it is still stagnated by the regulations of the fund and the bureaucracies,” said Eunice. “We would make the Cherry Fund available but what we have is to strictly adhere to the Cherry Fund 2020 Regulations as you know we are fully mandated to oversee the entire process on behalf of the government.”

Under the regulations, applications must be approved by the administrator and the board, with rejections requiring formal justifications and full resubmission, contributing to delays.

“The process is not easy as there is rigid uptake of the funds,” said Eunice. “The regulations also need us to thoroughly review the farmers, which makes it challenging to kickstart the process again. This makes the waiting times longer than expected to counter bureaucracies in the coffee sector.”

The expansion of the fund is now scheduled for review in October.

Plans to supply new pulping machines to farmers have also not progressed. The machines, to be imported from Brazil, are intended to help farmers process their beans locally to increase value addition.

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“We have a plan to purchase the pulping machines to help coffee farmers carry out the entire process in the country. However, we have not yet started any execution of the entire process,” said Eunice. “The ministry is responsible for funding the purchase.”

She confirmed that discussions are ongoing with the Ministry of Cooperatives and SMEs.

“Our team and the Ministry of Cooperatives, Small and Medium Enterprises are in consultations on ensuring the process is smooth and transparent. We aim at ensuring that the coffee farmers be the first beneficiaries of the project to ensure maximum production,” she said.

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