Deputy President Rigathi Gachagua has called on Coffee Cooperative Societies to publish and disclose the details of their financial costs and deductions to their members.
This comes amid heightened efforts to enforce efficient financial management practices within the cooperative movement through legal, regulatory, and policy reforms, particularly in the coffee subsector.
At the same time, the government has intensified measures to comply with the European Union’s zero-deforestation law (EUDR), which requires companies trading in coffee to conduct thorough due diligence across the value chain to ensure that coffee production does not come from deforested land.
Deputy President Gachagua, who was tasked by President William Ruto to lead reforms in the coffee subsector, urged Sacco management officials to ensure full transparency regarding financial costs.
He explained that such transparency would enable farmers to question any suspicious costs, contributing to better governance and accountability within the societies.
Additionally, Gachagua called on political leaders to refrain from interfering with the ongoing agricultural reforms.
“I have asked the Ministry of Cooperatives and the Ministry of Agriculture to fast-track the administrative and legal actions necessary to enhance corporate governance, transparency, and accountability in cooperative societies. This includes direct payments to coffee farmers through the Direct Settlement System (DSS). For full disclosure, cooperative societies must publish and communicate their costs and deductions to their members,” said Mr. Gachagua.
Speaking at the official opening of the 2024 Central Kenya National Agricultural Show at Kabiru-ini grounds in Nyeri, Gachagua emphasized the government’s commitment to ensuring that cooperative societies eliminate wastage and are managed efficiently, like business enterprises.
Gachagua was representing President William Ruto at the event, where he was accompanied by the Cabinet Secretary for Agriculture, Dr. Andrew Karanja, Nyeri Governor Mutahi Kahiga, and Senators Wahome Wamatinga (Nyeri) and John Methu (Nyandarua), among other government officials and political leaders.
Regarding Kenya’s compliance with the European Union’s zero-deforestation law, Mr. Gachagua said, “We have mobilized efforts to ensure compliance with the European Union Deforestation Regulations before the December 30, 2024 deadline.”
He assured that measures are being taken to align the coffee sector with European anti-deforestation regulations.
“This will allow us to retain the lucrative European Union market, which accounts for over 55 percent of our coffee exports,” he said.
In his speech, the Deputy President also highlighted the government’s interventions in various agricultural sectors. He said the government is addressing challenges in the coffee, tea, dairy, avocado, and macadamia subsectors by pushing for radical reforms.
“To support our small-scale coffee farmers, we have allocated Ksh3 billion to the Coffee Cherry Revolving Fund and an additional Ksh2 billion for coffee debt waivers. However, despite rigorous efforts to transform the coffee value chain, governance in cooperatives remains the weakest link in empowering and liberating our farmers,” he added.
Regarding the tea subsector, the Deputy President said that progress has been made since the Kericho Tea Conference last year. Last week in Mombasa, he met with newly elected directors of the Kenya Tea Development Authority (KTDA), where they agreed that prioritizing the welfare of tea farmers is essential.
“To achieve this, we must reduce production and operational costs, eliminate loss-making subsidiaries, and strengthen value addition so that more money reaches the farmer,” he stated.
In the macadamia subsector, he mentioned that the government has initiated a plan for comprehensive and lasting reforms, informed by extensive farmer engagement.
“We are ready to negotiate with processors and exporters to ensure minimum returns that reflect the farmers’ hard work,” he said.
In the avocado subsector, the government has implemented key interventions, such as removing bureaucratic red tape and streamlining the processing and inspection of export-bound avocados.
“These steps have reduced delays and ensured the quality of fruits for export. We are also organizing avocado farmers into cooperatives to create better economies of scale as we expand into markets such as the United States, Japan, India, and Malaysia,” he added.
On dairy farming, the Deputy President noted that the Ruto administration is reforming the subsector by implementing a minimum pay of Ksh50 per liter, along with prompt payment systems.
