Coffee conference forum to chart way forward for
industry in depths of despair

By Nyanda Ralek

IS there hope for Kenya’s coffee industry?
This will be the question on the mouths of most delegates when Nairobi hosts an international conference on the economically crucial beverage crop next month.
Nothing new there since the truth of the matter is that if the man-hours spent in workshops and seminars was the barometer for measuring success and the willingness to solve the myriad problems facing the sector, Kenya’s coffee industry would today not be in the Slough of Despond to which it seems to have been permanently consigned, especially in the past decade.
But there is a novelty about the parley organised by the East African Fine Coffees Association that makes it stand out like ripe coffee berries. It is in the conference’s sheer promise of potential and capacity.
For the first time, Eastern Africa and Kenya in particular, will be playing host to some of the key buyers of its coffee. This is crucial because the ultimate goal of the conference is to promote, market and eventually sell the region’s best coffees in Europe and the US at fair prices.
Hopefully, the buyers will be able to interact with growers and tell them directly without the unnecessary sweet-talking brokers how, when and why they buy their coffee.
The latter will also have their say on what kind of coffees they can produce and what they can do to improve their craft in tandem with any emergent needs and tastes on the global front.
Clearly, the conference has the potential that could nurture long-term business relationships of the type that would result in the buyers giving their specifications to the farmer, having these incorporated and built into the crop on the farm before it is sold at the farm-gate.
If the above scenario were to be realised in the local coffee industry for instance, it would have the obviously desirable effect of lessening the length and wastage during that long chain between the coffee bush and the cup on the table. But for this to happen, the government has to change the current governing the running of the coffee sector.
But perhaps most important of all, it would skim off the influence of several layers of middlemen and other commission-sucking voyeurs which has rendered cash crop farming in Africa a venture almost akin to walking a minefield.
Forget the weather and cost of inputs. The middleman is today the bane of many an African farmer. The richest people in coffee producing countries today are not the farmers who sweat blood and tears to turn virgin bush into a harvest of berries. It is the slick salesman who rides piggy-back on his effort to rake out obscene profits. The whole deal is lopsided in favour of the consumer end. Sample this: The world coffee industry is estimated to rake in US$70billion yearly, but the producing countries only get less than 40 per cent of this.
Something is seriously wrong with a system that celebrates and garlands traders at the expense of producers.
Yet today, that is the state of the African cash crop industry. And nowhere is this pursued with as fatal consequences as it has been in Kenya.
Witness how the local coffee elite has lobbied hard and interestingly with a runaway record of success against any policy changes that would jeopardize their cash cow and deprive it of its lush pasture.
Liberalisation of the sector, which started taking form in 2,000 after a series of consultations, has been held hostage by the overbearing interests of the coffee mafia. It has become a stop-go farce and a closed book. Only reforms considered palatable to the broker fraternity and their cohorts in policy-making bodies and regulators see the light of day.
The provisions of the Coffee Act 2001 and even the industry rules released a year later remain mere cartography brimming with the best of intentions but lacking in substantive movement.
While one of the main planks of the rules and the liberalization process was to free the marketing of coffee from the monopolistic gridlock of the all-powerful Coffee Board of Kenya (CBK), which was the alpha and omega when it came to selling coffee at the coffee auction, it is still business as usual. The reforms have stalled because the Kenya Planters Co-operative Union(KPCU) is exerting pressure to drive other players out. It has replaced CBK as another monopoly.
The truth is that even the other millers like Thika Coffee Mills and Socfinaf are but peripheral players.
Despite being on the right side of the law and meeting all the eligibility criteria set out in the Coffee Rules 2002, the door has been closed on all other marketers who have expressed willingness to join the marketing businesses Mukema and Large & Small, among others.
The worst part of this betrayal of the farmer and government double-speak is that ministers in the new dispensation, who only yesterday were the poster-boys and arch-evangelists for the “liberalize now” movement under the banner of Cotepa (Coffee and Tea Parliamentary Association), have drunk from a different cup and are no longer singing yesterday’s song.
Meanwhile, the troubled industry lumbers on like a dazed elephant suffering the effects of a tranquilizer and trampling on the innocent with fatal consequences. It seems that farmers have been relegated to collateral damage and expendable irritants in the dealers’ quest for ever-higher commissions and pole position in coffeedom.
All the signs of a festering crisis are there. Farmers and some millers are sitting on tonnes of coffee for which they cannot find a market, unless they go through KPCU. Hawking of coffee has become a major problem in parts of Central Province as farmers sell off their sweat for a pittance to any comer armed with cash.
Kenyans do not even consume five per cent of the 50,000 tonnes annual production, yet for a long time there has not been any intervention by the state in getting Kenyans to drink more of their coffee. But it appears, though belatedly, that there are attempts like the Coffee Week and other activities that are lined up during the conference to try promote local consumption.
Only recently, some of Kenya’s main growers signalled their intention to get out of coffee growing together. And who can blame them? They include publicly-quoted Kakuzi, Socfinaf and major estates like Kibubuti and Kentmere.
Overall production has already fallen from a high of 130,000 tonnes annually in 1989 to a low of 50,000 tonnes last year.
With the collapse of the quota system on the international coffee market about 10 years ago under the auspices of the International Coffee Organization, prices have fallen to an all-time low. The premiums hitherto paid on quality crop like Kenya’s Arabica have all but disappeared.
The glaring tragedy is that the Kenyan coffee industry has fallen hostage to the machinations of brokers, dealers and their protectors among the regulatory bodies. From an average price of about US$300 on the global market, 50 kg of Kenyan coffee only returned to the farmer a paltry US $100, with most of the cash going to the middlemen.
This is patently unfair to the producers.
This is why any initiative to seek better prices for the local coffee farmer and shorten his path to the market is welcome. The Nairobi conference will also enable the farmers to engage with buyers directly and know what they want, besides giving them an opportunity to exploit the emergent and ascendant market in specialty coffees.
At present, most of Kenya’s coffee reaches the world market in a totally unrecognisable form; as an ingredient in blended variants from other producing countries, giving the farmer a raw deal, the industry a bad name and feathering the nest of undeserving dealers.