January 14, 2014
KENYA COFFEE SECTOR THREATENED BY UPHEAVAL IN INTERNAL MARKETING
To our esteemed clients,
In the last few days there has been an escalation of coffee politics in Nyeri County, home to some of the best coffees in Kenya.
Licensed coffee millers and marketing agents are being forced out of the area, as the newly elected Nyeri county government tries to seize the marketing rights of the crop.
Politically, this is being sold to farmers as a way to control coffee sales and demand higher prices.
Previous attempts to centralise the sale of cooperative coffee in Kenya have usually ended in failure as farmers end up subsidising expensive monopolies (eg KPCU in the past)
Traders now fear there could be disruption to the flow of coffee at the auction, as well as a loss of traceability, leading to de-certification of many supply chains.
Similar, though less aggressive, tactics are being used in Meru and Muranga. Other counties are trying to impose their own taxes on the movement and sale of coffee.
We worry that the strong-arm tactics being adopted in Nyeri will spread to other coffee producing areas, if successful.
The policies being adopted by the newly created county governments – power has only recently been devolved from Central Government in mid 2013 – are at odds with a national policy of liberalisation.
However, the Central Government is yet to intervene to protect the rights of investors or to clarify any limits on policy making at a regional level.
As an active player in the Kenya market, ECOM is working closely with other members of the Coffee Millers & Marketers Association and the Kenya Coffee Trade Association to try and establish a dialogue with the Coffee Board of Kenya, and it’s parent Ministry (of Agriculture).
Given the threat which currently exists to our infrastructure and supply chains, we have decided to circulate this email by way of engaging the wider coffee community and keeping our clients updated.
In case you have any questions regarding the above, please don’t hesitate to contact us and we will put you in touch with Justin Archer, who is the director of ECOM’s East Africa origin operations.