The government has set the minimum buying price of coffee from farmers at Sh80 a kilogram to protect farmers from fluctuating coffee prices.
In the first coffee auction of the year, Sale-11, held on Tuesday (09/01/2024), a kilogram of cherry was sold for an average price of 90 shillings.
17,298 bags of coffee were traded at the auction held at Wakulima House and the Nairobi Coffee Exchange online portal. This was down 5,869 bags from the previous Sale 10 last year.
Speaking at Kikima Grounds in Makueni at the start of the Coffee Cherry Advance Revolving Fund Distribution and Coffee Production Sensitization program that will be visiting 17 coffee growing counties Co-operatives and MSMEs Cabinet Secretary Simon Chelugui said that the government will ensure a Guaranteed Minimum Return (GMR) of Sh80 per kilo of coffee cherry.
“We will ensure that the price of a kilogram of coffee will never drop beyond the Sh80 mark. On arrival at the factory, our farmers will be paid Sh40 for a kilogram of cherry and a further Sh40 on arrival at the mill. This will be guaranteed one month after harvesting and not advanced as a loan,” he said.
This price which will be improved if coffee prices rise will ensure that both the production costs and welfare of farmers are catered for.
“The ongoing coffee reforms will curtail the exploitation of farmers by middlemen. Farmers will have the right to introduce or withdraw their coffee from the market depending on prevailing prices. We will also issue only one license to anyone engaged in the coffee value chain. You will pick whether you want to be a miller and get a license from the county government, a marketer, or a broker and get licensed by the Capital Markets Authority. This will avoid the capture of the sub-sector. Farmers will also have the power to decide to either be paid in dollars or in shillings through the Direct Sales Settlement to prevent them being duped by brokers,“ Chelugui added.
The government has also brought in a new board at the Nairobi Coffee Exchange and licensed 14 new coffee unions that will represent the interests of farmers at coffee auctions.