After a long tussle between the Nairobi Coffee Exchange (NCE) and Capital Markets Authority (CMA) for control of the NCE, light can be seen at the end of this tunnel.
This follows pressure from the powerful Cooperative Alliance of Kenya (CAK) for NCE to admit five licensed brokerage companies licensed by the Capital Markets Authority (CMA) to the exchange.
“We will admit these coffee brokerage firms because of what the law says, and we are now finalizing the modalities required,” said Daniel Mbithi -NCE Chief Executive.
The CAK, in an internal memo to the Cabinet Secretary for Cooperatives and MSMEs in November 2023, seen by this publication, cited lack of access to the Nairobi Coffee Exchange (NCE) and non-supportive legislation as some of the main challenges facing Kenya’s Coffee Sector.
The powerful CAK lobby group for cooperatives urged the CS to ensure immediate admission of licensed coffee brokerage companies owned by cooperative unions to the exchange. This is in addition to pushing for the revocation of the Crops (Coffee) (General) (Amendment) Regulations 2022.
CAK wants NCE to admit Coffee Cooperative Unions Licensed by CMA, followed by reconstitution of the NCE.
“This is still an internal working document, and therefore I am not willing to discuss its contents or implementation. We will organize a stakeholders meeting in November this year to discuss the progress that has been made by the Government in implementing the proposals that we had set forth,” said Daniel Marube, Chief Executive-CAK.
The brokerage firms that have already received permits from CMA to join the NCE include Muranga County Coffee Dealers Limited, Embu Coffee Farmers Marketing Agency Limited, Meru County Coffee Marketing Agency Limited, Kipkelion Brokerage Company Limited, Mt Elgon Coffee Marketing Agency, and United Eastern Kenya Coffee Marketing Company.
CAK has petitioned the CS for Cooperatives and MSMEs Development to ensure issues facing coffee farmers are addressed.
It observes inadequate farmer representation at most key institutions that make decisions on behalf of the farmer, such as the Coffee Board of Kenya, Coffee Research Institute and NKPCU.
It is pushing for a review of the governance structures of these bodies and their funding levels.
To champion their specific needs as Coffee Cooperatives, CAK has proposed the formation of a federation-the National Coffee Cooperative Federation of Kenya, whose application has already been filed with the Commissioner for Cooperative Development.
In the dairy sector, some of the radical proposals by the CAK for increased funding to the New KCC to enable it to purchase milk from farmers during periods of the glut to avoid losses to farmers and also allow them to focus on production.
This is in addition to establishing a KSh 3 billion stabilization fund under New KCC to mop up excess milk and convert it to powder milk.
The lobby wants the CS- Ministry of Cooperatives & MSME Development to subsidize seeds and fertilizers by zero-rating tax on farm inputs and channelling such inputs through cooperatives. This is in addition to fast-tracking the revitalization of cotton and soya beans cooperatives, whose byproducts can be consumed by the Dairy Cooperatives as fodder.
In the tea sector, the cooperatives lobby group is, among other issues, urging for more say in the tea industry by ordinary farmers. CAK observes that small-scale tea farmers have limited control over Kenya Tea Development Authority (KTDA)-which controls their tea sales, and have limited options on what they can do.
CAK has proposed the formation of an apex body to represent tea issues and ensure farmers have representation at the table where decisions are made about their produce.
Available figures indicate that Kenya’s National rice consumption is estimated at 300,000 metric tons compared to an annual production range of 45,000 to 80,000 metric tons. The deficit is met through imports.
The current rice production is estimated at 80,000 metric tons on about 20,000 hectares of land. This production meets only 16% of the total demand, expected to rise with the increasing youth population and changes in eating habits.
In its memo, CAK says that to meet the specific needs of Rice Cooperatives, there is a need to set up a federation called Kenya Federation of Rice Growers by the end of the year 2024.
