Monday, January 05, 2009

Growers miss out on direct sale of coffee

Concern is rising in the coffee industry over the failure by various co-operative societies to use their coffee marketing licences to benefit from the direct coffee sales system.

Since the method was introduced in 2006, there have not been any remarkable gains by the smallholder farmers worth writing home about.

The system, commonly referred to as the “second window” entails a contractual agreement between the growers and their marketing agents and a buyer outside the country.

Its introduction was mainly advised by the need to link farmers directly to markets by eliminating or reducing intermediaries within the marketing chain.

A total of 43 marketing agents were licensed by the Coffee Board of Kenya, of which 31 were grower marketers and 12 commercial agents. As of last year the number of grower markers went down to 16 while the agents reduced to eight.

A major concern is that the growers, who were at the frontline in agitating for the amendment of the Coffee Act 2001 to introduce the direct sales system to run parallel to the Nairobi Coffee Auction are not fully participating in the new system.

Among those licensed to market their members’ coffee are Othaya Farmers Co-operative Society and Ndumberi Farmers Co-operative Society. But two years down the line the societies have not sold a single coffee bean by themselves.

“We found out that a lot of preparation was needed to help our participation in direct coffee sales,” says Mr Kimondo Ndegwa, the manager of Othaya.

Milling services

He says the need for milling services and lack of coffee tasters (liquorors) has left the society with little option than to put up with the intermediaries.

Meru Central Coffee Farmers Union has, however, come closer to cutting off middlemen. It’s the only farmers’ organisation that has been able to sell its coffee through direct sales.

Last year, the volume of coffee traded through the window rose to 120 metric tonnes compared to 50 tonnes the previous year.

A major boost for the organisation came from the Export Promotion Council and an Italian donor who helped it to design and launch a website.

The union has now been calling for bids on its various coffee grades on its websites-a first among the co-operatives.

“We are able to know about coffee dealers in various parts of their world and they are able to know about our coffee,” the manager Fredrick Mburugu said.

However, the majority of societies are still stuck with the middlemen. “Coffee farmers are normally very slow in adopting new things hence the wait-and-see attitude over the second window.

For instance, it has taken them about 20 years to adopt the Ruiru II coffee variety despite its advantages,” says Mr Kainga Nyaga, the principal of Kenya Coffee College of the Coffee Research Institute, Ruiru.

According to Mr Nyaga the benefits of the window will remain elusive to the farmers unless they engage professionals and enter into partnerships with other institutions the way Meru Union has done.

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