“From the time we come out of receivership we started by establishing ourselves back into the coffee sector by obtaining our milling license and looking for other partners in the sector. We are also working on a faovourable cash model that will enhance payment of farmers for the coffee they supply,” Mrs. Njogu said
Coffee farmers who were members of KPCU receive this as good news since they will now get value for their coffee. In the previous years after KPCU was put into receivership, most farmers had decided to resort to alternative crops for income while some went ahead to cut down the coffee plants. Mrs. Njogu said they have come up with modalities to motivate and help coffee farmers produce more of the crop.
“We have put in place measures to help coffee farmers acquire farm inputs and extension services in order to boost output. We are currently making payments for coffee beans supplied within two weeks. Apart from motivating the farmers the payment period also helps us clear our debts with the farmers in good time,” said Mrs. Njogu
KPCU faces stiff competition in the coffee milling and marketing sector but Mrs. Njogu says that they have strategies in place to ensure they sail through despite the competition.
“Currently there are about 18 other milling firms that pose competition but we plan to fight off the competition by providing exemplary services and returns to the coffee farmers saccos and also produce the desired quality of coffee,” Njogu said.
KCPU plans to exploit other possibilities of doing contract farming with the coffee farmers to ensure they secure a large number of farmers from their competitors. Njogu also said they are looking into the possibilities of getting new places where coffee can be grown to boost the amount being supplied to the union.
KPCU headquarters in Niarobi. Photo by Ronald Agak
Kenya planters cooperative union is not running these strategies in isolation but have incorporated all the stakeholders to improve on the current situation of the coffee industry. Mrs. Njogu said they are closely working with the government through the ministry of Agriculture, the county governments, farmers’ cooperative societies and other players in coffee sector to rejuvenate the coffee sector in the economy.
“KPCU cannot make it alone in the coffee sector and therefore it is working with all the stakeholders in the sector. Every player has a responsibility to undertake to rejuvenate the coffee sector that has been shrinking. Working together will enable all the players in the coffee sector to attain their dreams,” Njogu added.
Mrs. Njogu called upon Coffee Directorate to formulate policies and regulations that are not counter-productive. She added that the policies and regulations should b be fully implemented to enable the players in the coffee industry carry out their activities productively.
Mrs. Njogu said they are very keen in ensuring KPCU does not run into debts again. After being lifted out of receivership, KPCU has a great task of ensuring transparency in its financial dealings to escape falling back into a similar situation.
KPCU was placed under receivership in October 2009 over a Sh700 million debt and its operations taken over by Consultancy firm, Deloitte on behalf of the debenture holder, the Kenya Commercial Bank. In November 2013, KPCU and KCB made an out of court arrangement to lift the company from receivership and agreed on how to repay its debts it owed the bank, a move that gave hopes to over 700,000 coffee farmers who are shareholders.
