Kenya's Ministry of Cooperatives has requested the Treasury to reallocate unused coffee cherry funds to other state agencies and offer grants to select cooperatives, following low uptake of the fund by farmers.
In a letter seen by Business Day Africa, Cooperatives Principal Secretary Patrick Kilemi urged his Treasury counterpart Chris Kiptoo to divert part of the Ksh3 billion cherry fund to New KCC plants, women's cooperatives, and a cotton ginnery.
Mr Kilemi also sought the reallocation of at least Ksh450 million to cooperative societies as grants.
The Ksh3 billion coffee cherry fund, introduced in 2019, was initially aimed at providing loans to coffee farmers.
However, its uptake has been slow, with only half of the total funds absorbed so far. The government is now considering reallocating the unutilised funds to support other agricultural activities.
"This is to request for the reallocation of Ksh1.5 billion from the recurrent budget Head 0010 (coffee cherry fund)," Mr. Kilemi said in his letter to the Treasury.
The reallocation plan includes Ksh150 million for Narok Milk Factory (New KCC), Ksh150 million for Runyenjes Milk Factory, Ksh100 million for Nandi Milk Factory, and Ksh150 million for PAVI Cotton Ginnery.
The government has previously attributed the slow uptake of the cherry fund to inadequate farmer sensitisation, with some cooperative societies accused of blocking their members from accessing the funds.
There have been allegations of cooperative managers colluding with commercial banks to offer farmers expensive loans, frustrating efforts to boost coffee farming.
The coffee cherry fund, announced in 2019 by then-President Uhuru Kenyatta, was designed to help farmers meet financial needs after harvesting while waiting for payments from their cooperatives.
Farmers typically wait over a month to receive payments after selling their crop through cooperatives, but the fund aimed to reduce this period.
The government recovers the loans by deducting the advanced amounts, along with a three percent interest rate, once the farmers sell their produce.
