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Coffee Farmers Push for Reduction in Milling and Agency Fees

Coffee stakeholders are proposing a reduction of milling fees and a reduction of market agent fees in a bid to turn around the trouble sub-sector.

In its proposal to the Coffee Bill 2020 the Kenya Tea Sector Lobby is also vouching for the establishment of the direct settlement system to act as the clearinghouse for receipt and disbursement of monies from coffee sales.

After weeks of deliberation on coffee matters, curtains have come down for the submission of views to the proposed bill, which the government hopes will infuse change into the troubled sub-sector.

The Kenya Tea Sector Lobby is urging the bill to restrict marketing agents and millers from lending to farmers due to their exorbitant lending charges which average 14 percent.

The lobby is urging the government to prohibit cooperative societies from commercial borrowing but instead utilize the recently launched cherry advance fund at New KPCU that lends at 3%.

The Kes. 3 billion fund has so far lent about Kes. 150 million to farmers using their cherry as collateral.

Stakeholders are also calling for the establishment of the direct settlement system saying this is critical to making public information on earnings from all coffees sold from Kenya by all marketing agents.

DSS system will make payments to all coffee value chain players, directly and transparently to their accounts.

The sector lobby group is further proposing the crop be sold either at the auction or directly with a requirement that direct sales be validated at the auction as opposed to the current seller/ buyer private arrangements.

The Coffee Bill 2020 outlaws’ societies from using farmers’ assets to take up expensive loans that is embezzled.

The bill also proposes that independent factories can apply to become stand-alone societies.

The lobby group also proposes that millers and marketing agents shall be appointed by members of a coffee factory during an annual general meeting held before the start of the coffee crop year.