State in Sh8b plan to double coffee farmers' earnings by 2027

New Kenya Planters Cooperative Union (New KPCU) plans to double payments to farmers from the current Sh70 per kilo to at least Sh135 by 2027.

The farmers' cooperative, has detailed a plan in its just released 2023-2027 strategic plan that involves revamping old warehouses and inviting public-private partnerships (PPP) in a bid to improve earnings for the cherries. 

According to the plan, more modern warehouses mean more farmers bringing their coffee which will translate to better bargaining power when dealing with buyers. This will mean better earnings.

The Sh7.9 billion strategic plan has set a budget of Sh4.4 billion over the period for coffee milling and warehousing. This is about 56 per cent of the whole budget. 

New KPCU says it expects funding from the Exchequer through the Medium Term Expenditure Framework (MTEF). The cooperative society will also ask for additional resources above what is allocated. 

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"However, past experience has shown that the resources provided by the government through the MTEF are inadequate to implement the prioritized activities," the plan states. 

"To bridge the gap, New KPCU says efforts will be made to mobilise funding from development partners and scale up internal revenue to support some of the programmes and projects," it adds. 

"In addition, New KPCU will continue to embrace Public Private Partnerships (PPP) in the sector to ensure the identified priorities are fully implemented," it adds. 

In improving farmers' earnings from Sh70 a kilo to Sh135, the cooperative giant also wants to realise growth in revenue from Sh135 million to Sh600 million in the period. 

The growth in farmers' earnings will be done strategically from Sh70 to Sh85, Sh100, Sh120 and finally Sh135 in the final year of the plan. Similarly, revenue growth will move from Sh135 million to Sh275 million, Sh315 million, Sh475 million and finally Sh600 million. 

In the strategic objective to improve farmers' earnings, the cooperative will concentrate on coffee products’ niche market differentiation and adoption of emerging and experiential marketing.

Apart from coffee million and warehousing, the plan also identifies agronomy and technical support, coffee marketing, Coffee Cherry Advance Revolving Fund (CCARF), company revenue, and institutional capacity as its Key Result Areas (KRA).

The plan aims at increasing market share from the current three per cent to 14 per cent by 2027, disbursing and recovering Sh6 billion CCARF annually and digitising 100 per cent of identified company services and processes by 2027.

Since its inception, New KPCU has disbursed over Sh1 billion of CCARF benefitting over 90,000 coffee farmers, realised over 300 per cent increase in coffee milled and marketed, and administered a coffee farming inputs subsidy program which benefited over 7,000 coffee farmers.