Coffee farmers want CMA out of Coffee business

Government suspends license of eagle crown coffee limited

Coffee farmers are now calling on the government to suspend the Capital Markets Authority’s (CMA) coffee exchange regulations of 2020 until systems are put in place to allow seamless coffee trading.

According to the Kenya Coffee Producers Association (CPA), the authority lacks the expertise of the coffee business and therefore will not do justice to the coffee farmer.

The authority was mandated to regulate Coffee trading upon the gazettement of the capital markets (coffee exchange) in April 2020 in a move to tame cartels, who had been blamed for dwindling earnings by farmers.

Under the proposed regulations published by The National Treasury Cabinet Secretary Ukur Yatani, coffee trading companies and the weekly commodity auction would be regulated under the Capital Markets Act, an exodus from the current situation where the operations are controlled under the Coffee (General) Regulations through the Agriculture and Food Authority’s Coffee Directorate.

With less than ten days left to the expiry of the one-year extension period granted for the current regulations, farmers have raised concerns over gaps in the two coffee bills already tabled in the respective houses.

According to the Chairman of CPA, Peter Gikonyo, the proposal by the two bills to have farmers’ representatives in coffee board and the Coffee Research Foundation appointed by the government is a scheme to disassociate the farmer from his crop.

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“Government appointees will by no means serve the interests of the farmer but the interest of the appointing authority. Does this mean the farmer is not capable of making decisions of coffee farming business, yet this same farmer is capable of making decisions to bring the product on table for sale?’’ questioned the chairman.

Farmers are also opposed to the proposal by the Coffee Bill 2020 allowing the coffee factories to register as autonomous societies under the Cooperative Societies threatens the existence of the cooperatives despite the big role played by the coffee cooperative business model.

While the farmers welcome the introduction of (Direct Settlement System) DSS with the view of addressing delayed payments to farmers, they want the system streamlined to eliminate gaps in the operationalization of the system.

“What happens in case of dispute? Where does the farmer run to/ can DSS be sued? The law is also silent on any costs to operationalize the system and who will meet the costs if any,’’ asked the chairman.

In light of all the concerns arising from the two bills, the farmers want the two documents harmonized for ease of legislation of the coffee subsector.

In addition, the coffee producers recommend that all government agencies legally involved in coffee trading should converge to formulate non-conflicting rules and implement specific policies on coffee production.

This even as the association awaits the response of both houses on a memorandum sent on recommendations on behalf of the farmer.

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