Government Unveils Ksh 9.7 Billion Coffee Fund as Part of Bold Sector Reforms
The State is banking on fresh reforms and funding to double coffee production in three years.
The government has announced major reforms in the coffee sector, with Ksh 9.7 billion to be disbursed through the Coffee Cherry Advance Revolving Fund to support farmers and revive declining production.
Co-operatives and MSMEs Cabinet Secretary Wycliffe Oparanya, who was represented by Co-operatives Principal Secretary Patrick Kilemi during International Coffee Day celebrations, said the reforms are aimed at reversing decades of decline.
Coffee production has dropped from an annual high of 150,000 metric tons in the 1980s and 1990s to less than 70,000 metric tons today. Oparanya attributed this to market inefficiencies, weak co-operative governance and reduced farm productivity.
“The average coffee bush yields less than two kilograms, some farmers applying the right agronomic practices harvest up to 50 kilograms per bush,” he noted. “If we can raise average yields to 20 kilograms and expand acreage, production could increase tenfold, we can surpass Uganda and even challenge Ethiopia as Africa’s leading producer.”
Direct Settlement System and Transparency
The government also highlighted the Direct Settlement System at the Nairobi Coffee Exchange as part of its reform agenda. The system links producers directly with buyers, ensuring farmers get at least 80% of the coffee’s value. According to Oparanya, this has brought transparency and reduced risks of indebtedness by enabling co-operative societies to repay loans more effectively.
The Coffee Cherry Advance Revolving Fund, which provides loans to smallholder farmers, was singled out as a success. Oparanya said most repayments have already been made, describing farmers as reliable partners when given structured financial support.
Legal and Policy Overhaul
In addition to funding, the government is pushing for legislative reforms. The Coffee Bill 2024 and Co-operative Bill 2024 will enhance governance, accountability and transparency in farmer co-operatives and address weaknesses in existing oversight structures.
“These laws will entrench good governance and empower farmers, so that the benefits of reforms are sustainable,” said Oparanya.
Coffee Export Licences
In another development, the Agriculture and Food Authority (AFA) has published a notice to grant 10 companies exclusive export, roasting and packaging licences. This will allow the licensed companies to bypass middlemen and negotiate directly with international buyers—Kenya can now change its position in the global coffee market.
With this, the government wants to make coffee one of Kenya’s top export earners and improve livelihoods for thousands of smallholder farmers.
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Government Unveils Ksh 9.7 Billion Coffee Fund as Part of Bold Sector Reforms