Agriculture Cabinet Secretary Peter Munya has warned that managements of coffee co-operative societies that hinder farmers from accessing the Sh3 billion cherry advance fund will be dissolved.
Speaking Monday during the Coffee Bill public participation forum in Mathira, Nyeri County, the CS said the fund is lying unutilised as farmers seek expensive loans from banks.
"We have noticed with concern that some farmers have been shying away from applying for the revolving fund but we know what the problem is and we will take action," he said.
He said it is wrong for board members of societies to deny farmers their rights by failing to sign the forms presented to them.
"My office will crack the whip and dissolve those boards because we have noticed the reason the farmers are not borrowing is because some society managements are refusing to sign the forms; this is unacceptable," he said.
Money lying idle
He said that a huge chunk of the fund set aside to revive the sector is lying idle in the banks because a majority of the farmers have not borrowed the monies.
He said board members were scheming to lie to the farmers that if they go for the loans from the fund, they will have given up their milling right to New Kenya Planters Co-operative Union (KPCU).
"I want to tell coffee farmers that propaganda going round in their societies that by borrowing from the fund, that takes them back to new KPCU, is untrue. No one is forcing farmers to mill their coffee so they are at liberty to choose a miller of their choice even after borrowing,'' said Mr Munya.
Farmers, on the other hand, said co-operatives’ officials are colluding with banks to advance loans to the growers so that they can earn a commission.
"We want the loans but the officials want us to borrow from banks instead," said Mr Peter Mathenge, a farmer.
The CS said that societies’ officials are driven by kickbacks from banks and saccos and that is why they do not want farmers to benefit from the government-sponsored fund.
"As a ministry, we cannot sit back and watch farmers incur huge debts as a result of high interest borrowing so we have to act,” said CS Munya.
The revolving fund was introduced by President Uhuru Kenyatta in a bid to cushion farmers from post-harvest losses.
CS Munya urged farmers to borrow from the fund as it only attracts a three per cent interest while commercial lenders charge higher interest.
At the same time, Mr Munya said the national government has set aside money to revive the debt-ridden Mathira North Coffee Farmers’ Co-operative Society in Mathira Constituency which collapsed about three years ago.
While addressing farmers at Kaiyaba grounds on Monday, the CS asked the Directorate of Criminal Investigations (DCI) to move in and investigate all former management officials of the society for possible massive embezzlement of farmers’ proceeds.
Local leaders and stakeholders led by Dr Jeff Kamau had asked the minister to intervene and help revive the 6,000-member strong society to save the livelihoods of peasant farmers.
All the five affiliate factories of the society — Kiamariga, Kahiraini, Hiriga, Ruiruiru and Kabiruini — collapsed following a mass pull-out by the majority of farmers who cited mismanagement and poor payment for their crop while others abandoned coffee farming altogether. Those still farming have now resorted to hawking their produce to brokers.
Mr Munya said the new laws that are expected to be tabled in Parliament soon for approval will go a long way in curbing mismanagement and theft of farmers’ resources that had led to most of them abandoning coffee growing.
He warned that all corrupt management committee officials will face jail terms if found to have stolen members’ proceeds.