Coffee farmers protest new direct payment model amid concerns over Cooperative stability
Coffee growers oppose new payment system proposed by President Ruto, fearing negative impacts on cooperative societies and farmer unity.
KENYA – Coffee farmers in Kenya have voiced strong opposition to a proposed government policy that seeks to change the payment model for coffee sales.
The plan, announced by President William Ruto, would see coffee farmers paid directly by the Nairobi Coffee Exchange (NCE) five days after weekly auctions, bypassing traditional cooperative channels.
Farmers argue that the new system could undermine the cooperative movement, which has historically supported small-scale growers across the country.
Cyrus Njogu, Chairman of the Kabare Farmers Cooperative Society, warned that implementing the model without proper consultation could destabilize the entire coffee sector.
Njogu noted that most farmers produce less than 150 kilograms of coffee during the harvest period, and removing cooperative structures could lead to internal conflicts and reduced support systems.
“The President should have engaged genuine farmers for proper consultation before making such a directive,” he said.
President Ruto, speaking during a televised session with vernacular stations, revealed that starting June, payments for coffee sold at the NCE will be processed through the Direct Settlement System (DSS) to ensure prompt and transparent remittance to farmers.
He argued that the move is aimed at enhancing governance in the coffee value chain, noting that previous delays of up to six months had negatively impacted farmers’ livelihoods.
Ruto said the Capital Markets Authority (CMA) has been brought in to oversee the new system.
However, the announcement has sparked concern among key stakeholders. Peter Gikonyo, a coffee farmer from Murang’a, questioned the legality of the directive, pointing out that existing regulations have not yet been amended to allow direct remittances to farmers.
He warned that the plan could lead to the collapse of cooperatives and marginalize smallholder growers.
Meanwhile, data from the NCE indicates a notable drop in trading volumes at the latest coffee auction. Sale 26 of the 2024/25 coffee year, held at Wakulima House in Nairobi, recorded 14,489 bags traded, weighing 892,863 kilograms and fetching KES 684 million (US$5.27 million). This represents a 31.1 percent decline from the previous week.
NCE CEO Lisper Ndung’u attributed the decrease to the winding down of the main coffee harvest season and encouraged farmers to uphold quality standards to maintain global buyer interest and competitive prices.
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