KENYA- In an interview with a local radio station, Inooro FM, Deputy President Rigathi Gachagua has disclosed an agreement that will enable Kenyan farmers to sell their coffee directly to Starbucks Corporation.
Starbucks is the world’s largest coffeehouse chain. As of November 2022, the Seattle-based company had 35,711 stores spread across 80 countries globally.
“From the very promising talks I recently had with the US ambassador Meg Whitman, the deal will be groundbreaking for our farmers as it will eliminate the middlemen and allow them to sell directly to the largest coffee chain in the world, ” he announced.
However, the local daily was not able to confirm the status of the US government-backed deal from either Starbucks or Whitman by press time.
Meg Whitman, is an American politician, corporate leader, and diplomat who has been the country’s ambassador to Kenya since 2022.
As a US representative, Whitman has securing new trade deals for American businesses in the country, a move which is expected to challenge the dominance of other major players like Nestlé S.A., recognized for their Nescafé brand.
Kenyan coffee farmers who number about 800,000 are expected to be the major beneficiaries of the deal.
The government claims that coffee farmers currently do not receive fair wedges for their produce despite it being sold at premium prices in the international government.
The government has attributed this sad reality to an undifferentiated market that favors intermediaries and other “cartel” members to the detriment of farmers.
With this new agreement, the government hopes to benefit farmers who would see higher pricing for their coffee, which might help them recoup their costs of production and earn them a profit.
This agreement follows attempts by previous and present administrations to improve the thousands of coffee farmers’ livelihoods who have been giving up their former lucrative coffee sector and the top earner of foreign cash due to low-income revenues.
According to official data from the Nairobi Coffee Exchange (NCE), auction volumes for August dropped from 4,380 tonnes to 192 tonnes this year representing 95.62 percent as the state grapples with challenges in the issuance of trading permits which coincided with coffee exchange reform.
Only 58 buyers have been registered at the NCE to buy from the auction out of the 121 licensed coffee buyers for the 2023/24 season according to the Agriculture and Food Authority.
This has forced traders and buyers to keep off the NCE resulting in a drop in coffee prices and volumes traded leaving farmers stuck with pilling stocks of coffee they can’t sell.
With this new agreement, the government hopes to persuade Starbucks to buy its coffee directly from Kenyan farmers, aiming at increasing their income and improving their access to the market.
Given that the US coffee chain mainly relies on farmers, purchasing from approximately 400,000 farmers in 30 countries, the inclusion of coffee from Kenya will increase its supply as it prepares to launch 300 new stores in the remainder of Europe, the Middle East, and Africa (EMEA).
