Barichu Coffee Coop reels in debt after Sh63M gift from President turns out to be loan
KENYA – Barichu Farmers’ Cooperative members are in shock after a gift from the President to help the debt-ridden cooperative bail itself out turns out to be an additional loan.
The coffee cooperative has slightly under Sh 300 million in debt accumulated over the past two years. The coop has 7,000 farmers, who, through their Member of Parliament, sought the intervention of the President to enable them to pay the debt.
In September, Cooperatives Cabinet Secretary Wycliffe Oparanya and Mathira MP Eric Wamumbi visited the society to present a gift from President William Ruto, which was worth Sh 63 million.
However, after an audit report, the members were informed that the gift was an additional loan from the New Kenya Planters Cooperative Union (NKPCU).
The government mandated NKPCU to manage and administer the fund to coffee farmers as per the Public Finance Management Act (Coffee Cherry Advance Revolving Fund) Regulations 2020.
The report, read by Mr. Philip Ouma from the office of the Commissioner for Cooperatives, showed that the society owes the New KPCU Sh 97 million, including the Sh 63 million that was supposed to be a debt waiver.
Nation Media Group Kenya quoted Gilbert Gicheru, one of the shocked members, who said, “We can’t believe what we have just heard in that report. All along, we believed the President had waived the Sh 63 million debt only to be told that it was a loan.”
“Why heap debt upon debt without revealing this to us? How can government officials lie to farmers? We are very disappointed.”
The auditor also highlighted some financial malpractices in the society, including Sh 14 million being spent on public relations in just one year.
From the report, the society was advised to hold elections within a month to implement the recommendations, which also include surcharging officials found guilty.
In September, eleven coffee cooperative societies received Sh 125.2 million Cherry Fund loans in the latest allocation to boost production.
Part of the cooperatives was Barichu, one of the top beneficiaries of the Cherry Fund, receiving Sh 65.3 million. Another top beneficiary was Kunyak in Kericho, receiving Sh 10.8 million.
New KPCU has field officers in the counties who visit the farmers and recommend the release of money compared to kilogrammes of cherry delivered for processing to various coffee factories.
Since the inception of the Cherry Fund, more than Sh 5.4 billion has been disbursed to 399,248 farmers in 26 counties.
Nyeri County has benefited with Sh 816.7 million for 77,565 farmers, followed by Machakos with Sh 621 million for 48,338 growers.
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