DP Rigathi Gachagua faces coffee marketing nightmare
An obscure coffee marketing system, anxious farmers and unimplemented Parliament-enacted legal reforms.
This is what Deputy President Rigathi Gachagua is expected to deal with in his new assignment – as regards the executive order issued by President William Ruto early this week.
In his directive, the Coffee Sub-Sector Implementation Standing Committee (CSISC) constituted by the previous Jubilee administration to oversee coffee reforms fall under the Deputy President’s docket.
The standing committee chaired by Prof Joseph Kieyah has almost been dormant since it was reconstituted in October 2020 to complete implementing legal reforms proposed by the team led by the same chairman.
Prof Kieyah and his group had left upon expiry of the mandate of the initial committee (Coffee Sub-Sector Implementation Committee) at the beginning of 2020.
This is after validation of both the Crops (Coffee) General Regulations 2019 and the Capital Markets (Coffee Exchange) Regulations, 2020 by Parliament. The latter is an offshoot of the former. It was formulated to provide new trading rules at the Nairobi Coffee Exchange (NCE).
It is supposed to establish a direct settlement system for expediting payment to growers from sales of their coffee. The system had not been put in place by June 30, 2020. This is also the day that trading permits used to expire. So, coffee brokers whose licences were to be renewed by the Capital Markets Authority (CMA) under the new trading regulations could not carry out their business at the NCE.
To break the stalemate, then-Agriculture Cabinet Secretary Peter Munya had to issue a transitional period of one year for CMA to put up the necessary structures and prepare to play its new regulatory role.
He did the same the following year but in June last year, the minister amended the Crops (Coffee) (General) Regulations, 2019 restoring the mandate of regulating the coffee industry to the Agriculture and Food Authority’s Coffee Directorate.
Previously, attempt to replace the so-called Kieyah rules with a new Bill (Coffee Bill 2021) the Agriculture ministry had developed failed after it was rejected by Parliament. The Bill was pre-empted by another one (Senate Bill No 22 of 2020) sponsored by then-Embu senator Njeru Ndwiga, with support of the Council of Governors.
The Bill was passed by Parliament and is awaiting consent by the Head of State.
All eyes are now on DP Gachagua. Farmers are eager to see if he will weed out marketers who have been controlling the marketing channels as he has vowed to do.
“We have been locked out of the Nairobi Coffee Exchange,” National Coffee Cooperative Union (NACCU) officials said in a letter addressed to President Ruto.
They were complaining of what they termed as continued exploitation by multinationals which own several subsidiaries the Coffee Directorate has licensed to trade at the weekly auction.
The lobby, chaired by Mr Francis Ngone, comprises 13 unions from across the country.
