Case of peasant coffee farmers toiling for the rich

For the last 37 years Mr Chrysogon Wang’ondu has looked up to his coffee trees to change his life for the better. But with producer coffee prices becoming more and more disappointing, the optimism that he had sustained since 1972 started giving in to scepticism.

The Nyeri farmer started off with 400 coffee trees, which he inherited from his father when he was 28 years old. During the coffee boom of the 1970s he increased the trees to 2,153.

But the expected potential of coffee has failed to change his fortunes and he is contemplating uprooting the trees when the rains come to plant napier grass to feed his two dairy cows.

“We are trapped in a vicious circle of poverty and indebtedness. What we are getting from our coffee sales is strictly limited to settling debts from our operations,” says Mr Wang’ondu.

Trade sin coffee is second to oil in the world, not just in turnover but also in attracting many traders. But the irony of the multi-billion dollar world coffee industry is that little of the proceeds from the lucrative international market trickles down to small-scale producers like Mr Wang’ondu who are placed lowest end of the value chain.

The reforms introduced by the government over the recent years have made little impact in changing the lives of the producers who are entrenched in abject poverty.

Ms Bridget Carrington, the managing director of C Dormans Ltd, a leading roaster and exporter of coffee, says the problem of low incomes lies in low productivity and unviable small coffee farms. Although local coffee fetches three times more than others in the international market, many farmers have fewer trees, she says.

They are also producing about 20 per cent of the potential per tree, which is two kilos of cherry and many are not investing in increasing productivity due to financial difficulties.

“We start a new season hoping that the prices will improve against the previous year’s. But it is now dawning on coffee growers that coffee will always enrich the traders and not producers,” Mr Wang’ondu says.

In the last season, for instance, Mr Wang’ondu invested Sh5,600 on labour, Sh8,770 on pruning, Sh27,600 on fertiliser and Sh17,000 of chemicals to get a better crop from the two acres of land. However, at the end of the year, his net margin was a mere Sh11,800, which averages less than Sh1,000 a month.

The Coffee Development Fund (CODF), which the government created three years ago to leverage coffee undertakings, has been a major letdown to the farmers. While its funding has been inadequate, it has been lending off-season and most farmers have given up.

Direct coffee sales

Demand has outstripped the available funds and mobilising resources to satisfy the appetite of the more than 500,000 coffee growers has been a challenge.

On the other hand, the introduction of the direct coffee sales system, which had been devised as a way of dodging the Nairobi coffee auction believed to harbour cartels that short-change growers, has little to show two years down the line.

Productivity has also reduced over the years with each coffee tree yielding an average of two kilogrammes from a potential of over 10kg.

“As long as the productivity remains low, there is no possibility of the farmers getting better returns,” says Mr Salesio Mbogo, the field service manager at Kenya Planters’ Cooperative Union.

According to farmers, coffee growing is no longer viable due to the high cost of inputs and the meagre returns. Lately, several multi-national coffee corporations, notably Starbuck Coffee and Neumann Kaffe’ Group, have established a presence on the ground with programmes said to help the farmers earn more.

Starbucks, a leading coffee dealer globally, has since 2005 been implementing a joint project with the African Wildlife Foundation, which it says is geared to improve farmers’ incomes. Under the project, known as the African Heartland Coffee, farmers in five factories have been trained in best practices.

The wet mills in these factories are also undergoing upgrading while a Sh8 million regional coffee laboratory and cupping centre has been put up at Kimathi University.

“We do not want to tie the farmers to Starbucks. But we know what we are doing will eventually enable them to evade the middlemen,” the project’s agronomist Mr Robert Thuo says.

According to Mr Thuo, the coffee laboratory and cupping centre will enable growers to send samples of their best coffees to markets abroad, which will ensure they get best prices for the premiums grades.

Mr Newton Mwangi, the chairman of Othaya Farmers Cooperative Society, says farmers should not expect coffee to improve their lives unless they venture into marketing.

“Prices that coffee fetches at the international markets are normally good but they are somehow lost by the time they get to the farmers,” says Mr Mwangi.

Several coffee societies that had been given grower marketer licences by the Coffee Board of Kenya were unable to sell any substantial amount of coffee. Only the giant Meru Coffee Co-operatives Union attempted.

After it dawned that coffee marketing requires heavy capital outlay and good knowledge of the market, the societies early this year surrendered the licences and formed the Kenya Cooperatives Coffee Exporters Ltd.

The farmers are pegging their hopes on the new firm, which is a government initiative aimed at giving the small-scale growers a chance to reap the benefits of direct coffee sales.

Many of the established coffee marketers are clearly uncomfortable with the initiative since unlike individual societies it has the support resources of its sister firms – the Co-operative Bank and the Co-operative Insurance Company – at its disposal.

Room for improvement

The firm, according to its chief executive officer Lucy Murumba, is gearing to buy the first coffee in the Ukambani, Meru and Western Kenya regions within the next few weeks.

It has already occupied some offices at Kahawa, House which also houses Coffee Board Kenya. That the KCCE was all set to start buying coffee from the growers came to light three weeks ago when it placed an advertisement in the media for tenders for supply of gunny bags.

Like many times before, coffee growers are hopeful that the company will change their lives for the better. Ms Murumba is hesitant to state how much the new firm will pay farmers, but there’s no second-guessing where the expectations of Wang’ondu and thousands of other farmers are: up.

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