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Kenya: Coffee Fund Releases Sh217 Million to Farmers
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Business Daily (Nairobi)
15 January 2008
Posted to the web 15 January 2008
Zeddy Sambu
More than 23,000 farmers have benefited from Coffee Development Fund administered loans set up two years ago.
The fund has disbursed Sh217.5 million to 20 co-operative societies for lending to farmers since its inception in 2005 up to December 30, last year.
It follows renewed demand for credit packages for coffee trees that produce at least two kilogrammes of cherry per annum.
The package is a medium term facility for coffee growers that is delivered through intermediaries or directly for purposes of rehabilitating coffee trees.
"This demand is an indication that a substantial amount of financial resources is required to raise production," a brief seen by Business Daily says.
The advances product covers one crop cycle. Trees with productivity of at least one kilogramme of cherry in a year qualify for the loan.
It will be available over a period of three crop cycles or approximately 36 months with 12 months grace period before commencement of repayment.
The loan is targeted at small holder coffee farmers with a minimum of 100 coffee bushes and small to medium coffee estate growers.
Coffee Development Fund (CDF) was established under the Coffee Act Number 9 of 2001. It was set up as a specialised body to address the credit needs of the coffee growers. It is part of significant coffee reform programmes that started in 1992.
"The fund is also in the process of designing appropriate products that can address capacity and infrastructure requirements at the factory level," the brief adds.
Handling and processing of coffee at the factory has a major influence on the quality of beans, and ultimately the price of coffee at the market.
Coffee is considered a strategic crop as it accounts for about 15 per cent of Kenya's export earnings .
At their peak in the 1987/88 period, farmers produced about 130,000 tonnes of coffee. Over time, production has since declined to only about 50,000 tonnes in the 2006/07 year.
The decline is blamed on factors including poor international coffee prices, high cost of inputs and lack of affordable credit.
Co-operatives continue to play a key role in the provision of agricultural services to members through financial resource mobilisation, savings and credit facilities, farm input supplies, collection and processing of produce, marketing and payment to members.
Over 700,000 smallholder coffee farmers are members of coffee co-operative societies and contribute over 70per cent of the total coffee production in the country. Most of the 11,000 registered saccos are now show improved performance as confidence of members in their cooperatives continues to rise.
In early 2007, the Government directed that farmers should receive at least 80 per cent of the gross sales of their proceeds as a way of enhancing returns from their investment.
Co-operatives have previously been involved in direct fertiliser importation and support along this line would enhance the effectiveness of the Fund and the subsequent credit delivery process.
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The direct importation of farm inputs would therefore not only reduce the cost of fertilisers by half but also increase the returns to farmers considerably.
Those societies that have benefited include :Agricultural Finance Corporation, Baringo Teachers, Egerton University, Embu Farmers, Gusii Rural Farmers, Kapenguria Teachers, Kiambu Tea Growers sacco, Kipsigis Teachers sacco, Kirinyaga District Farmers sacco, and Mathira Farmers sacco.
Others are Meru Central Farmers sacco Ltd, Meru North Farmers sacco Ltd, Meru South Farmers sacco, Michimikuru Rural sacco, Mugama Farmers Co-operative Union, Nandi Farmers sacco Ltd, Ntiminyakiru Rural Sacco Ltd, Taifa sacco Ltd, Taita Taveta Teachers sacco Ltd and Trans-Nzoia Teachers sacco Ltd.
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