Nairobi: Cabinet Secretary (CS) for Cooperatives and Micro, Small and Medium Enterprises (MSMEs) Wycliffe Oparanya has maintained that the Government will only settle audited and verified coffee cooperative loans. He reported that a comprehensive audit of coffee societies’ liabilities established that only Sh. 6.8 billion out of the claimed debts was legitimate and eligible for settlement.
According to Kenya News Agency, speaking to hundreds of coffee farmers from Embu on Wednesday at Kairuri Grounds in Manyatta Constituency, CS Oparanya said any fictitious loans will not be covered and may even lead to prosecution. He said the Government had put in place stringent verification mechanisms to ensure only legitimate claims backed by supporting documents and minutes authorizing borrowing will be paid.
CS Oparanya emphasized that any cooperative society whose debt is not reflected in the audited report will have to resolve those obligations internally through their management committees and farmers. The CS confirmed that the Government has already begun settling the verified debts, with Sh. 2 billion set aside in the initial phase of payments.
At the same time, Oparanya announced a policy shift that will bar cooperative societies from procuring their own milling machines. Instead, milling services will be centralized under the New Kenya Planters Cooperative Union (KPCU) that will act as the primary service provider for all coffee cooperatives requiring the services.
The move, he said, will save societies from incurring huge expenses of procuring them, as most of the time they remain idle since the coffee harvesting and milling season is short. It will also cut operation costs in terms of specialized staff, maintenance, and security. The CS noted that sharing the service will help lower the processing cost for the farmers.
Additionally, the CS stated that the State had barred societies from seeking loans from commercial banks for inputs and cherry advances to prevent them from falling back into debt traps. Measures have been instituted to ensure farmers have cash in their pockets to support their farming through the Cherry Advance Revolving Fund (CCARF) and Direct Settlement System (DSS).
‘We have ensured that farmers have access to cheap CCARF loans to purchase inputs and also meet immediate household needs as they wait for their harvest to be sold,’ he said. Through the DSS mechanism, farmers are able to receive their pay directly to their accounts within five days once their coffee is sold at the Nairobi Stock Exchange.
The CS also mentioned that the government was working towards tripling coffee production annually from 50,000 metric tonnes to 155,000 by the year 2028. This will be achieved by introducing the crop into new zones and increasing acreage under coffee.
