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Kenya's coffee industry shows dramatic growth

Currently, coffee ranks fourth in terms of foreign exchange earnings for Kenya (WRENmedia)
Currently, coffee ranks fourth in terms of foreign exchange earnings for Kenya
WRENmedia

Traditionally, Kenya has enjoyed the reputation of being the best producer of Arabica coffee in the world. In recent years, however, Kenyan Arabica has been blended with coffee from other sources and, as a result, Uganda - though producers of lower quality Robusta coffee - has overtaken Kenya in the coffee stakes. In response, the government has taken a number of steps to improve Kenya's performance as a quality coffee producer. "Following sound reforms since 2006, production has increased outstandingly from 39,462 metric tonnes (mt) in 2007/8 to 54,000 mt in 2008/9," says Kenya's Permanent Secretary for Agriculture, Dr Romano Kiome. "This is a growth of 36.8 per cent."

Dr Kiome has asserted that these reforms are aimed at re-establishing the high production levels of the 1960-90 period when annual production of 100,000 mt was achieved consistently, the highest yield of all time being the 129,000 tonnes in 1987/8. "Our focus in the future will be as for the last three years, boosting production, and improving the marketing, regulation and the policy framework," he says.

Credit to enable growers

The government has recognised that lack of readily available credit has prevented coffee growers implementing improvements in production and post-production, and has therefore established the Coffee Development Fund (CoDF) as a source of grower credit to rehabilitate their coffee trees. At the end of the government's 2008/9 financial year, some Ksh 1.065 billion had been made available as credit to growers; this will be doubled to Ksh 2 billion in the current year.

Extension services have been intensified in all coffee growing regions in Kenya (WRENmedia)
Extension services have been intensified in all coffee growing regions in Kenya
WRENmedia

CoDF managing trustee, George Ooko, believes that this fund has been a great success, particularly in the way that loans from national to farm level have been carefully monitored. "As a result, 55,000 farmers have been able to borrow and pay back as per the agreement," he says. A beneficiary of the CoDF credit, Zipporah Karanja, a coffee farmer from the Mt. Kenya region, agrees that the access to credit has contributed to the revival of the coffee industry in the area.

The industry has also been given ongoing support to tackle disease. Coffee Berry Disease and Coffee Leaf Rust are currently a major problem for small scale coffee production in Africa, Asia and Latin America. In response, the Kenyan government has contributed Ksh 14.5 million over the next five years to counter these diseases and raise yields and quality of Kenyan coffee. This will be part of an overall project funded by the Common Fund for Commodities (CFC) and supervised by the International Coffee Organisation (ICO) at a total cost of US$4million, which will also be carried out in Zimbabwe, Uganda, Rwanda and India.

Extension, debt forgiveness and marketing

Extension services programmes have been intensified in all coffee growing regions in Kenya, with two or more extension officers in most regions advising growers on the adoption of best farming practices. Meanwhile, the government has waived debts of Ksh 5.2 billion, which were incurred by farmers under the Smallholder Coffee Improvement Programme during the years 1993-98.

Marketing is being improved by merging Coffee Cooperative Societies (Thomas Dixon/USAID)
Marketing is being improved by merging Coffee Cooperative Societies
Thomas Dixon/USAID

Marketing is also being improved with Coffee Cooperative Societies, that were split into economically unviable units in the 1990s, now being merged. "We have been encouraging mergers of these single factory societies into larger units so that members can enjoy economies of scale," says Seno Nyakenyanya, Permanent Secretary of Cooperative Development and Marketing. Coffee cooperatives have also been helped to form a new marketing organisation, the Kenya Coffee Cooperative Exporters Company (KCCE) which, within a year of its formation, has won new markets in Scandinavia, Israel, Morocco and Egypt.

The potential for African coffee production, and specifically for Kenya, is considerable: with average production of coffee 540 kg/ha in Africa, the opportunity is there to catch up Asia at 750 kg/ha and Latin America with 950 kg/ha. Currently, coffee ranks fourth in terms of foreign exchange earnings for Kenya after horticulture, tea and tourism. A meaningful indicator of progress is that the price of Kenyan coffee has reached a high of US$300 per 50 kg bag.

KCCE CEO, Lucy Murumba, believes the coffee industry is set for a new dawn. "For the last year we have signed contracts with coffee farmers amounting to 20,000 tonnes," she says, "and the figure is expected to rise as more farmers continue signing our marketing agreements to service the orders we are receiving from the various segments of the international markets."

Written by: Nick Waitathu

Date published: January 2010

 

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