Coffee farmers in Kenya oppose direct payment plan amid fears of co-operative system collapse
Farmers warn government against enforcing direct payment system, citing risks to co-operative services and loan access.
KENYA – Coffee farmers in Kirinyaga County, Kenya, have strongly opposed a government plan to pay them directly under the Direct Settlement System (DSS), raising concerns over the potential collapse of the long-standing co-operative movement.
Under the DSS introduced in 2023, payments for coffee deliveries have been channelled through the Co-operative Bank, enabling timely settlements.
However, a directive issued in November by the Ministry of Co-operatives announced a policy shift from July 1, 2025, mandating that DSS payments go directly to individual farmers’ accounts rather than through their respective co-operative societies.
The co-operative payment model has enabled societies to deduct management fees, repay farmer loans, and facilitate access to inputs and services before transferring remaining funds to farmers. Many growers now fear that bypassing these societies could cripple essential services and strain rural livelihoods.
During recent annual general meetings, farmers from various societies voiced resistance to the new payment structure and warned their co-operative boards against sharing member data with the government without consent. Several threatened to oust board members who comply with the directive.
“We don’t want the government to pay us directly. We cannot risk the collapse of our co-operatives that have been supporting us with loans and farm inputs,” Kelvin Macharia from Mirichi Cooperative Society told The Star.
Farmers argue that co-operatives play a crucial role in accessing loans backed by delivered coffee volumes. They also raised concerns over mobile payment methods like M-Pesa, claiming it may hinder effective financial planning and household budgeting.
Mugo Wagikombe of Baragwi Cooperative Society questioned the government’s insistence on implementing the new model, alleging that certain officials and banks may stand to benefit from the change.
“This is a scheme that doesn’t reflect the farmers’ wishes. Why ignore our voices?” he asked.
Despite widespread farmer opposition, Co-operatives Cabinet Secretary Wycliffe Oparanya maintains that the DSS is effective, ensuring prompt payment and increasing transparency.
Speaking in Kiambu in March, Oparanya said that beginning July, 80% of proceeds will be remitted directly to farmers, with the remaining 20% allocated to co-operatives.
He added that any society needing to deduct more than 20% must formally request ministry approval, outlining the reasons.
“In the reforms that we are implementing, farmers will now be getting their money through their accounts, and the leaders have agreed that this is a good system and the returns have increased,” Oparanya said.
As the July deadline approaches, co-operative officials remain uncertain about compliance amid growing grassroots opposition.
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