Coffee farmers lament three-month pay delay


Some farmers have not been paid for cherries sold on the Nairobi Coffee Exchange(NCE) as far back as December 2023, despite buyers already having released their cash, raising fresh questions over the ongoing State-driven reforms in the sector.

Farmers sell their cherries at the NCE through their own brokerage companies, after which they are supposed to be paid in US dollars through the Direct Settlement System (DSS). The DSS was introduced last year to streamline payment for coffee farmers and is provided by the Co-operative Bank of Kenya.

“While DSS was supposed to bring efficiency in settlement of coffee proceeds, it has caused untold suffering to coffee farmers like unexplained partial settlements, payment to the wrong accounts, recalling payments from growers, unauthorised change of grower’s code and bank accounts,” Peter Gikonyo, chairman of the Kenya Coffee Producers Association (KCPA), a lobby for coffee growers said.

The official did not immediately provide the exact amount owed to farmers. “Not every farmer has been paid. Some have received payment while others haven’t, so I may not have the figure right away” he said.

According to the Crops (Coffee) (General) Regulations, 2019, the Capital Markets (Coffee Exchange) Regulations, 2020 and Nairobi Coffee Exchange Trading Rules, 2023, settlement is supposed to be paid within five days from the date of sale.

“Some of the unexplained settlement delays date back from sale 10 done in December 19, 2023, to sale 20 done on March 12, 2024,” said Mr Gikonyo.

This comes even as Kenya’s coffee exports nearly doubled to 2,685 tonnes in January on demand for the larger quantities of quality crops from the October-December production season.