The National Assembly Departmental Committee on Trade, Industry, and Cooperatives now wants MPs to allocate at least Kshs. 17.7 billion to New Kenya Planters Cooperative Union (NKPCU) to ensure optimal operation of the organization.
Committee Chairperson James Gakuya observed that the agency needs at least Ksh. 15 billion set aside for it from the current Kshs. 4 billion for the upscaling of payment to coffee farmers and another Ksh. 2.7 billion to carry out the required modernization of coffee warehouses across the country.
“Following the inspection tour, the Committee noted that, there is a pressing need to modernize the nineteen (19) warehouses yet to modernize, especially, the removal of asbestos, which is associated with health risks exposures,” said the Committee
Gakuya who led his team on an inspection tour of all warehouses owned by New KPCU noted more funds need to be pumped into the organization to streamline its operations for the benefit of farmers. Even so, Gakuya’s Committee expressed concern that even though it was asking for an additional budget, the Kshs.4 billion allocations for the coffee cherry fund to upscale the payment to coffee farmers, was yet to be fully disbursed.
“Delays in exchequer releases pose a challenge to the agency since coffee farmers are anticipating an increase in payment from Kshs.40 per kg of cherry to Kshs.80 per kg. The Committee observed that only Kshs.500 million has been disbursed,” noted the Committee
The Committee recommended that, once New KPCU receives budgetary allocation for the modernization of its warehouses, the agency should review the mode of implementation of the modernization process, such that it should prioritize the completion of one warehouse at a time.
“This approach is proposed in view of the fact that the agency attempted to modernize multiple warehouses simultaneously, resulting in slow progress toward completion. By prioritizing one warehouse at a time, the agency can streamline the modernization process and achieve more efficient results,” the Committee noted in the report
The lawmakers further indicated that the ongoing coffee reforms have necessitated the need for modern laboratory equipment for the New KPCU to be able to compete with the multinational companies and to directly access the international markets.
In the report, the Committee noted that there is a need for modern cupping facilities for each of the mills in the New KPCU branches.
“New KPCU targets to increase its current production capacity from 3,018 tonnes to 20,000 in 2027,” read part of the report
Gakuya’s team sounded a warning that if the entity is not fully funded to modernize its facilities, it is highly unlikely that the stated target will be met.
“The modernization process involves removing the asbestos roofing which is hazardous, painting, floor works and construction of boundary walls to improve the security in New KPCU branches,”
The Committee further observed that, due to the proximity challenges of the existing New KPCU milling plants, coffee farmers who do not have a mill close by, have to travel for longer distances to deliver their coffee for milling. This translates to high transportation costs for the coffee farmers.
The MPs argued that the ongoing coffee reforms have increased the scope of operations of New KPCU, such that it has a critical role to play in the coffee industry.
New KPCU is currently involved in buying coffee from farmers, which was initially done by only four multinational companies. This is anticipated to create competition and prevent the exploitation of coffee prices offered to the farmers in exchange for their coffee.
