Kenya is set to license coffee cooperative societies as export agents, a move that could spark competition with established local and international marketers. According to Agriculture and Food Authority (AFA) chairman Cornelly Serem, this initiative is part of broader reforms within the coffee subsector aimed at allowing farmers’ cooperatives to directly market their produce globally.
“After successfully licensing farmer associations as coffee brokers in recent years, our next step is to register new agents to export coffee overseas,” Serem said. The national and county governments are collaborating with established coffee societies to ensure they comply with all necessary regulations before receiving export licenses.
Serem emphasized that licensing primary coffee cooperative societies will lower business costs and increase income for farmers. Currently, most of Kenya’s coffee is exported by international companies with local subsidiaries.
Over the past two years, the government has been reorganizing the milling and marketing of Kenyan coffee as part of its reform agenda to empower local farmers. Serem noted that several farmers’ cooperative societies have integrated their businesses, reducing costs and enhancing farmers’ earnings in the process.
The union has been selling its coffee through Kirinyaga Slopes Coffee Brokerage Company Limited, one of the 16 brokers registered by the Capital Markets Authority (CMA) to market Kenyan coffee at the Nairobi Coffee Exchange (NCE). Since its establishment in October last year, the company has successfully traded much of the coffee at the NCE, with clean beans fetching some of the highest prices at the auction.
By setting up its own mill, the union has reduced milling costs by five percent, dropping from 22 percent to 17 percent over the past year. Munyangia explained that the decision to adopt an integrated business model was driven by frustrations with local and international companies that charged excessively for transport and milling services.
By mid-August this year, Kirinyaga Slopes had sold coffee worth $35.7 million (Sh4.6 billion) out of a total of $167 million (Sh21.5 billion), representing 21.43 percent of the total. The chairman also confirmed that over 18 societies in the county paid more than Sh100 per kilogram for their coffee, with the highest payment nearing Sh130.
