Kenya to settle US$129.2M coffee debts as reforms target production growth
Kenya begins settling verified coffee debts while introducing sweeping reforms aimed at boosting production, improving efficiency, and restoring farmer confidence in the sector.
KENYA – Kenya has announced plans to settle Kes 6.8 billion (US$129.16 million) in verified coffee debts as part of a broader reform programme aimed at stabilising the sector and increasing national production.
Cabinet Secretary for Cooperatives and MSMEs Wycliffe Oparanya said only audited and legitimate claims will be honoured, warning that fictitious loans will not be covered and may lead to prosecution. He noted that strict verification measures have been applied to ensure transparency.
“Any cooperative society whose debt is not reflected in the audited report will have to resolve those obligations internally,” Oparanya said, adding that Kes 2 billion (US$15.38 million) has already been allocated for the first phase of payments.
The government has also introduced structural changes within the sector. Cooperative societies have been barred from purchasing their own milling machines, with milling services to be centralised under the New Kenya Planters Cooperative Union (KPCU).
“We want a scenario where any society in need of milling services will engage the New KPCU at a minimal fee,” Oparanya said, explaining that the move is intended to reduce costs associated with equipment, maintenance, and staffing.
In addition, cooperatives have been prohibited from taking commercial bank loans for inputs or cherry advances. Instead, the government is promoting alternative financing mechanisms such as the Cherry Advance Revolving Fund (CCARF) and the Direct Settlement System (DSS).
Through CCARF, farmers will access affordable loans for farm inputs and household needs, while DSS ensures that payments from coffee sales at the Nairobi Coffee Exchange are deposited directly into farmers’ accounts within five days.
Beyond debt settlement, the government is targeting a significant increase in coffee production, aiming to raise output from 50,000 metric tonnes to 155,000 metric tonnes by 2028.
Oparanya said the reforms are designed to enhance Kenya’s global competitiveness and strengthen coffee’s role as a key foreign exchange earner.
Principal Secretary for Cooperatives Patrick Kilemi highlighted regional production trends, noting that Kirinyaga currently leads in coffee output. He added that adoption of modern farming practices will be essential to achieving national targets.
Kilemi also pointed to growing interest in coffee farming in counties such as Kakamega, Uasin Gishu, and Trans Nzoia.
“This signals renewed confidence in the crop among farmers across the country,” he said.
He added that the ongoing coffee revival programme requires strong farmer participation, noting that challenges in the sector extend beyond cooperative management to production, processing, and marketing.
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