STiR coffee and tea magazine

22 STiR coffee and tea | 2024 Issue 4 (August / September) By Shem Oirere he government of Kenya has allocated an additional KES2 billion ($15.7 mil- lion) to the Coffee Cherry Advance Revolving Fund (CCARF), to enhance access to credit for the more than 700,000 coffee growers spread throughout the country's 33 coffee producing counties. Treasury Cabinet Secretary Prof Njuguna Ndung'u said in June 2024 that the cash allocation for the 2024/2025 fiscal year "is in addition to the KES4 billion ($31.4 mil- lion) set aside in the previous fiscal year." The CCARF was established by the government in June 2019 to provide afford- able, sustainable and accessible cherry advance payments to smallholder coffee grow- ers as part of the country's coffee sector revitalization plan. Kenya has an estimated 700,000 smallholder coffee growers and at least 3,000 large, medium and small estates growing mainly arabica varieties SL28, SL34, K7, Ruiru 11, Batian and Blue Mountain in key coffee regions of western, Nyanza, Rift Valley, Eastern and Coast. The fund, will, apart from the budgetary appropriation by parliament, also get money from recoveries for administration costs relating to coffee cherry advance, cur- rently pegged at 3% of the advanced amount, as well as from grants and donations. A Kenyan coffee farmer at her farm. More than 700,000 coffee growers are now eligible to apply for funding. Photo courtesy Kenya Coffee Producers Association Kenyan Industry Reforms Fuel Fund Injection T As of July 2024, the fund had ad- vanced KES4.69 billion ($35.4 million) to at least 339,734 growers in 26 coun- ties according to the New Kenya Plant- ers Co-operative Union (NKPCU), a government agency under the Ministry of Agriculture offering coffee milling, ware- housing and marketing services, and is providing oversight of the Fund. The July 2024 disbursement is nearly 59% higher than the KES2.95 billion ($22.7 billion) advanced in January 2024 to 221,382 beneficiaries in 24 coffee growing counties. Kenya's Cabinet Sec- retary for Cooperatives and Micro and Small Enterprise, under which NKPCU falls says at least KES4 billion ($31.4 million) has already been processed and paid to the farmers as a revolving fund according to the Standard. NKPCU has developed policies and procedures relating to application, dis- bursement and recovery of coffee cherry advances to the coffee growers. "CCARF has a huge impact in the coffee sector, it is a game changer," said NKPCU chairman Daniel Chemno to STiR on the phone. "The government has increased the Fund to six billion shillings ($46.3 mil- lion) and the response from coffee farm- ers is quite impressive," he said. "The uptake of the funds by coffee producers is phenomenal," said Chemno. Growers eligible to benefit from the fund are those who are members of a reg- istered primary coffee cooperative society or a smallholder estate affiliated to NK- CPU. There are at least 500 coffee coop- erative societies in Kenya, marketing more than 80% of the country's coffee, while the remaining production is marketed by corporate and sole-owned businesses. At least 2,400 of the 3,000 coffee es- tates in Kenya, are small estates with farm acreage of between five and 20 acres. Currently, growers, who qualify for the loan are advanced 40% of the prevailing average sales price at the Nairobi Coffee Exchange or at least KES20 ($0.15) per kg of cherry delivered. The advance payment addresses the issue of delayed payments (often six to eight months), which lead to cash flow challenges for smallholder farm- ers and the inability to finance their farm operations or livelihoods. The growing interest and access to government-supported financing of the coffee farmers is expected to improve

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