The Lower Eastern Times Opening The Third Eye
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The National Coffee Cooperative Union (NACCU) is calling on the Ministry of Cooperatives and MSME Development to delay the full implementation of direct payments to coffee farmers until June 2026.
In a letter to Cabinet Secretary Wycliffe Oparanya, NACCU Chair Francis Ngone requested a one-year extension, citing challenges with incomplete farmer data, limited bank account ownership, financial literacy gaps, and outstanding coffee-related debts.
The April 17, 2025 directive mandated that all coffee sale proceeds be deposited directly into individual farmers’ bank accounts, bypassing cooperative societies. NACCU, however, argues that many smallholder farmers—especially in rural areas—still rely on SACCOs and lack access to formal banking.
Ngone emphasized the need to allow farmers to choose SACCOs as payment points to preserve the cooperative system. He also raised concerns over the lack of clear guidelines on payment frequency and foreign exchange rates, calling for further engagement with stakeholders to resolve practical issues.
Additionally, Ngone criticized changes to the coffee levy distribution. Previously at 1.8%, the levy has now been reduced and redistributed among the Capital Markets Authority (0.2%), Nairobi Coffee Exchange (0.3%), and the Direct Settlement System (0.3%).
He warned that this adjustment could hurt coffee unions that operate brokerage firms, stressing the need for fair compensation across all service providers and greater transparency in how the funds benefit farmers.
“We need a balanced approach that ensures all stakeholders are recognized and fairly treated,” Ngone said.
