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Demystifying the Crisis in the Coffee Subsector

  Apr 4, 2014

Over the years there has been a gradual decline in coffee production in Kenya. Statistics show that in the year 1984, Kenya was producing 160,000 metric tons of coffee. However in 2010 the production level was 60,000 metric tons. This decline begs the question: besides nurturing a new coffee drinking generation, can we also add value to our coffee?

Following the policy crisis that has plagued the coffee industry in Kenya, Strathmore Business School organized a Coffee Business Program that saw the major stakeholders in the industry come together to seek solutions to the problems hindering growth in the coffee subsector. The program had a rich variety of participants, among them millers, financiers, owner managers and county representatives. Also present in the panelist session was the Governor of Nyeri County, Hon. Nderitu Gachagua, as well as Mrs. Isabella Nkonge the Ag. Managing Director of Coffee Board of Kenya (CBK).

It was posited that without stability and growth in coffee production, the coffee industry in Kenya will be headed for trouble. According to Dr. Joseph Kimemia, one of the facilitators of the Program, “Productivity is one of the means to increase profitability and sustainability.”

Mrs. Nkonge clarified the five main roles played by CBK: production, processing, marketing, branding and regulation of the industry. She further reported that CBK has faced a number of challenges and hence the need for the frequent reforms within the Board. Some of the challenges she highlighted include limited human resource as well as lack of sufficient evidence to arrest and prosecute those who engage in corruption. Mrs. Nkonge however assured the participants that CBK has a triad strategy which will give priority to productivity as well as governance and marketing to guarantee an improvement in the quality of coffee produced.

Hon. Gachagua argued that CBK needs to ensure that all loopholes in the industry that allow for people to embezzle funds should be closed. The Governor of Nyeri also defended the farmers in saying that they are the least protected members of the value chain and yet all the other stakeholders are protected. He advocated that the farmers, be involved in decision making in the industry and they be assured of getting maximum value for their hard work in the production of coffee. In his opinion, those who are appointed as leaders in the coffee subsector should be well educated for their roles. He also proposed that the many societies in the coffee industry be merged into efficient units and that there should be a separation between the managers of the units and the farmers. “Managers should manage the units while the farmer solely concentrates on farming,” he said. He further challenged CBK to ensure they reform the coffee sector by appointing good leaders who will ensure the farmers get their dues.

Participants were in agreement that Kenya needs to ensure traceability of its coffee in the world market where approximately 0.5% – 0.6% of Kenya’s coffee is used to blend coffee from other parts of the world. Good marketing and branding will guarantee growth and publicity of the coffee market in Kenya and subsequently attract investors.

Participants agreed that since coffee is a significant source of revenue in Kenya, it is only obvious that we secure the treasure we possess as a country. In his concluding remarks, Dr. Kimemia, a facilitator in the Program, challenged stakeholders: “Let us grow our coffee with passion; let us work to move from 60,000 metric tons and produce adequate coffee that will meet the market demand, bring good income and provide employment for the many jobless people.”

The Coffee Business Program is a three-day program that will dig deeply into issues that affect the coffee sector and seek solutions on how they can be revitalized, while finding opportunities that exist in the coffee value chain and how they can be harnessed.

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