Cabinet approves Sh4bn for coffee farmers
Coffee cherries at a farm in Nyeri town on October 26, 2022.
What you need to know:
- The move comes at a time when some leaders from the Mt Kenya region have raised complaints about the government’s decision to bail out sugarcane farmers.
- Among leaders who have been vocal on the issue are Kiambu Woman Representative Gathoni wa Muchomba and Mathioya MP Edwin Mugo.
The Cabinet on Friday approved Sh4 billion for coffee farmers, even as the government vowed to invite global coffee dealers, as it explores a solution to problems bedevilling the sector.
In a meeting chaired by President William Ruto, the Cabinet said the additional sum would raise coffee prices fourfold, from Sh20 to Sh80 for a kilo.
“Farmers will now earn Sh80 a kilogramme of cherry from the current Sh20 a kilogramme as an advance payment,” the Cabinet said in a statement. “The funds were additional to the Sh3 billion released earlier.”
The move comes at a time when some leaders from the Mt Kenya region have raised complaints about the government’s decision to bail out sugarcane farmers, after the Cabinet approved Sh117 billion in bailout to six state-owned sugar mills.
Among leaders who have been vocal on the issue are Kiambu Woman Representative Gathoni wa Muchomba and Mathioya MP Edwin Mugo.
Deputy President Rigathi Gachagua has also been spearheading an overhaul of the sector, albeit unsuccessfully.
Despite his interventions, the volume and prices of coffee sold at the Nairobi Coffee Exchange (NCE) dropped as traders and buyers kept off the market, creating the threat of layoffs by processors, as confusion over the issuance of trading permits by the State intensified. Data from the NCE showed that auction volumes in August dropped by 95.62 per cent to 192 tonnes from 4,380 tonnes in August last year, as the auction attracted an average of 25 buyers on each auction date.
“The government will also deliberately search for better markets for farmers by inviting world renown coffee dealers. This will reenergise the Nairobi Coffee Exchange, which has witnessed depressed prices and low sale volumes at the auction,” the Cabinet said yesterday.
At the same time the Cabinet also announced that it had approved the first 2023/24 supplementary budget whose biggest effect would be a 10 percent cut from ministries, mainly in the unnecessary expenditures such as travels.
“It follows the move by the Government to rationalise its budget — by cutting down unnecessary expenditures such as foreign travel — by more than Sh71 billion,” it stated.
The Cabinet also approved Sh16.6 billion for electricity transmission infrastructure projects, including Narok-Bomet, Malindi-Weru and Kabarnet-Rumuruti lines.
“This investment in the new construction lines will enhance quality and reliable power supply in the country,” the Cabinet stated.
