The Kenyan Cabinet approves US$29.5m Cherry Advance Revolving Fund regulations to boost coffee production

KENYA – The Kenyan government has approved Kshs. 3 Billion (US$29.5m) Cherry Advance Revolving Fund regulations to boost coffee farming in the country.

The government has established the Rules and Regulations titled “The Public Finance Management (Coffee Cherry Advance Revolving Fund) Regulations, 2019” to govern the management of the Fund which has been published in the Kenya Gazette.

Stakeholders in the coffee sub-sector and members of the public in general have been invited to submit written comments and feedback by 15th January 2020 to enable the roll-out of the funds.

Some of the highlighted regulations include, that the applicant must be a Kenyan citizen, member of a registered coffee co-operative society or a smallholder coffee estate, who is affiliated to New Kenya Planters Co-operative Union.

Upon receipt of an application the Administrator shall evaluate the application to ensure compliance with these Regulations and coffee advance evaluation procedures approved by the Board.

The Administrator shall, after evaluation of the application, make recommendation to the Board to either approve or reject the application.

Where the Board rejects an application, the Board shall give reasons for such decision within fourteen days of such decision.

An applicant whose application has been rejected may resubmit the application upon fulfillment of the requirements set in these Regulations. 

Any decision of the Board shall be communicated to the applicant within fourteen days from the date of Board decision.

Any applicant who is dissatisfied with the decision of the Board to reject his application for a coffee advance may apply to the Board for review of the decision.

Upon acceptance of the application, a member of a registered cooperative society or a smallholder estate affiliated to New Kenya Planters Co-operative Union shall be advanced forty per-centum of the prevailing average sales prices at the Coffee Exchange.

The coffee advance payment rate will also entail twenty shillings per kilogram of cherry delivered and forty per-centum of the payment rates to members by a cooperative society for the immediate past crop year.

Any coffee advance shall attract an administration cost of three per centum of each amount advanced. The administration cost shall be met by the applicant and be deducted from the coffee advance.

The Board shall develop procedures for recovery of coffee advances. The Board may appoint agents for purposes of recovery of the coffee advances in accordance with the procedures developed.

In this regard a new seven-member board has been appointed to manage the New Kenya Planters Cooperative Union paving way for operationalization of the Fund.

Industry, Trade and Co-operatives Peter Munya says the new board is expected to complete digitalization of financial procedures in two weeks to enable coffee farmers across the country to access the fund from anywhere through an online portal.

In December last year, the Cabinet approved the coming into operation of the New Kenya Planters Co-operative Union (KPCU) as well as the immediate operationalization of the Coffee Cherry Advance Revolving Fund.

The implementation of the Ksh.3 billion (US$29.5m) fund faced a lengthy delay last year as the state tied up the operation of the kitty to the restructuring of the Kenya Planters Cooperative Union KPCU which is currently under liquidation.

The new seven-member board include Simeon Thuranira and Viola Mukami, Joyce Muthoni Wangari, Sebastian Maina, Antony Nzau, Michael Mwirigi and Josephine Kemunto.

The new board which is chaired by Henry Kinyua is expected to fast track operationalization of the fund in two weeks’ time.

CS Munya has similarly appointed Ndambuki to head New-KPCU in an acting capacity. New regulation to guide operations of the new entity have been drafted pending public participation.

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