Kenyan coffee cooperatives resist direct settlement payment plan 

KENYA – The National Coffee Cooperative Union (NACCU) has declined to adopt a government directive that seeks to operationalise a direct-to-farmer payment model under the Direct Settlement System (DSS).  

NACCU argues that the plan could dismantle cooperative-led structures that have historically managed coffee earnings and farmer support at pulping-station level. 

NACCU Chairman Felix Mureithi Mwai said the order would sideline the cooperative model that administers farmer payments at grassroots level.  

He stated that the directive failed to consider broad industry consultations or farmers’ legal right to manage coffee transaction frameworks using society bylaws. 

“The November 18 directive will destabilise cooperatives by redirecting coffee payments straight to members of pulping stations,” Mwai said. “Primary cooperative societies are autonomous custodians of coffee funds, and farmers must be allowed to conduct coffee business under their bylaws and the Cooperative Act, Cap 490.” 

NACCU Secretary Maina Mureithi noted that coffee producers must be free from government micromanagement over payment systems. Mureithi added that coffee farmers should retain full discretion over sales channels and payment frameworks, maintaining that cooperative societies have been less vulnerable to systemic malpractice than national-level structures. 

NACCU said it would engage other small- and medium-scale coffee-producing estates to reinforce the position. Mwai also referenced an older governance model, calling for renewed focus on systems where farmers had direct management control over crop husbandry and marketing decisions. 

The dispute follows a High Court decision in Kerugoya that temporarily blocked the government’s attempt to deploy the Direct Settlement System.  

Justice Edward Muriithi suspended the system’s implementation until May 20, 2026, citing procedural gaps in public participation across 15 coffee-growing counties.  

The court determined that the Ministry of Agriculture’s appointment of a commercial bank to oversee payouts did not meet statutory requirements. The judgment also said the National Assembly did not guarantee community engagement at the required regulatory stage, particularly in 15 counties covered by the policy. 

The case originated from a petition by coffee farmers contesting the DSS structure, arguing that it was introduced without meaningful consultation with producer unions, traders or cooperative representatives. The petition also challenged the Capital Markets (Coffee Exchange) (Fees) Regulations, 2024, which the court said lacked adequate participation from coffee-producing counties. 

Historic Coffee Prices 

Meanwhile, Kenya’s coffee marketplace has delivered record-breaking commercial performance through the first nine months of 2025. Auction prices at the Nairobi Coffee Exchange averaged Kes 1,025.03 (US$7.91) per kilogram in September 2025, the highest monthly price ever posted.  

From January to September 2025, the national average price reached Kes 904.42 (US$6.97) per kilogram, surpassing all monthly averages recorded in any year prior to 2025, according to Nairobi Coffee Exchange tracking. 

Export volumes have also reflected the growth run. Between January and September 2025, Kenya shipped 45,249.88 metric tonnes of coffee, earning Kes 43.36 billion (US$331.53M) in sales. April 2025 registered the largest single-month volume in the country’s export history at 7,950.86 tonnes.  

The March-to-May 2025 window delivered Kenya’s highest consecutive export-value streak at Kes 6.90 billion (US$53.2M) in March, Kes 7.82 billion (US$60.29M) in April and Kes 7.35 billion (US$56.67M) in May. 

Kenya’s 2025 performance trend is running ahead of the Kes 37.7 billion (US$285.27M) generated in the 2023–24 coffee season, which had itself been a milestone for export revenues.  

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