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Cooperative Cabinet Secretary Wycliffe Oparanya has ordered that next year coffee proceeds will be channeled directly to the growers from the Nairobi Coffee Exchange (NCE) a move that has faced severe opposition.
In a circular by the CS dated November 18, the CS directed coffee cooperative societies to provide their member’s details to the Direct Settlement System (DSS) provider.
The directive has caused an outcry from the stakeholders alleging it will frustrate operations within the cooperative societies.
In the coffee year 2024/2024, the coffee cooperatives are directed to digitize their weighing scales, and stock cards and post information on quantity and quality to a central database accessible to the farmers.
Among the key stakeholders calling on the CS to rescind the directive are millers, saccos, Unions, brokers, and leadership in the cooperative movement who say the remittance of proceeds directly to the farmers will cripple the societies.
The circular directs that cooperative societies’ administrative and operational costs be capped at 20 percent of gross coffee earnings, subject to periodic review by the Commissioner for Co-operatives.
Maina Muriithi, chairman of Iria ini farmers’ cooperative in Nyeri says the directive is impractical as it will sabotage the sector.
Maina said the directive requires the growers to operate dollar accounts, yet some deliver less than 50 kilogrammes of coffee.
“This is a flawed boardroom decision as no public participation forum was convened in any county, “ Mureithi added.
Iria ini Society is among the cooperatives that declined to submit details to the NCE.
Oparanya directed the NCE to commence payment to coffee growers ( Societies) and their members through the DSs prescribed in the Coffee General Regulation 2019.
The CS further demands that the charge by the cooperative for pulping, factory administration, transportation, milling and warehousing, brokerage, and other expenses shall not exceed 20 percent of the gross earnings.
The circular calls that if they need to borrow loans, they should seek from regulated financial institutions upon approval by the farmers in general meetings attended by the county director of cooperatives, and commissioner of cooperatives. Organisations regulated.
