STiR coffee and tea magazine

50 STiR coffee and tea | 2026 Quarter 2 Summer (Jun/July/Aug) By Diana Jendoubi Identifying Income Drivers for East African Coffee Producers espite having a reputation for growing high-quality arabica and commanding higher prices, Kenyan coffee production has de- clined over the last few years, while neighboring Uganda has be- come the second-largest coffee producer in Africa, with its farmers earn- ing a greater share of export value. A new study conducted by Scaled Impact assesses how value is created and distributed across the East African coffee value chain and identifies what actually drives increases in farmer income and production. Small-Scale Operations Smallholder farms produce the majority of coffee in both countries. Ugan- da has about 1.8 to 2.5 million small-scale farms, and Kenya has around 3,000 large coffee estates and 800,000 smaller operations. Uganda is one of the few regions in Africa that produces more robusta (80%) than arabica (20%); Kenya focuses almost entirely on arabica (99%). The average annual revenue is $600 for arabica farmers in both countries and $310 for Ugandan robusta producers. Between 2024 and 2025, Uganda produced about 450,000 metric tons of coffee, 33% of to- tal East African coffee production, compared with Kenya's 45,000 metric tons (4%). Centralized Vs. Liberalized Systems The majority of Kenya's farms are organized into cooperatives that sell around 90% of their coffee through the Nairobi Coffee Exchange (NCE). Cherries from individual farms get mixed together during processing and are sold in group lots, making it impossible to trace quality back to the farm level. Payments are often delayed for up to seven months, forcing coffee farmers in Kenya to rely heavily on credit and high-interest loans to cover harvest labor and production costs. Uganda liberalized its coffee sector in the early 90s, allowing farm- ers to deal and sell directly to competing buyers. This gives them instant feedback on quality and market preferences from the buyers, rewarding those farmers who pay extra attention to quality during the growing and harvesting processes. Receiving immediate payments creates liquidity and gives Uganda farmers the freedom to adjust or invest in new produc- tion techniques mid-season. According to a new study by Scaled Impact, East African coffee farmers' income is shaped more by how the market functions than by production practices alone. Photo credit: Mountain Harvest Capturing More Export Value The Scaled Impact report states that "Kenyan arabica commands higher prices per kilogram on average, yet farmers capture a smaller share of export value compared to their Ugandan coun- terparts. In Kenya, sales routes are the strongest determinant of income differences." Comparing the national Free on Board (FOB) prices for both countries shows that, despite Ke- nya's higher prices, farmers there capture about 66% of the FOB price, compared to 82% in Ugan- da. This indicates that Uganda's direct-to-market structure gives its farmers a larger portion of the final export value and demonstrates that market organization has a greater impact than agricultural practices. In an interview with STiR Cof- fee and Tea, Manisha Mathai, an associate at Scaled Impact, em- phasizes the key takeaways from the study. "The central conclusion is that farmer income is shaped more by how the market func- tions than by production practices alone." Donor and development funding in the coffee sector often focuses on training, best agricul- tural practices, and compliance support, but this doesn't neces- sarily lead to higher income for the farmers. "Additional training tends to repeat existing knowledge and has little impact on the price farm- ers receive or their access to high- er value markets," adds Mathai. "What instead drives outcomes are structural constraints within the system." Next Steps The key takeaways from this study can inform the develop- ment of new methods and ac- tions to improve farmers' incomes and increase coffee production in East Africa. Developing a for- ward financing instrument would address liquidity constraints at harvest, while introducing more direct buying channels would in- crease market access and provide feedback loops. Easier access to information on pricing, quality, and market demand would also benefit farmers by enabling them to make informed decisions more quickly. D Producer education in improved postharvest processing methods leads to consistent quality and product diversification. Photo credit: Mountain Harvest Barigye notes that Ugan- da's more structured export- ers are ahead: "Mountain Harvest has already polygon- mapped farms and built digital systems to track sourcing and production practices." At the national level, the Ugandan government has pledged to register all coffee farmers and establish a National Trace- ability System to meet EUDR standards (USDA FAS). Hage-Chahine echoes the split reality: "Uganda is relatively better positioned given its more liberal market structure and more consoli- dated supply chains, which allow for faster implementa- tion. Ethiopia, with its highly fragmented smallholder base and more complex regulatory environment, faces a steeper challenge." Mathai raises an often- overlooked ecological di- mension. Deforestation risk in Uganda is concentrated in high-altitude arabica zones where expansion has an out- sized environmental impact. "Current risk maps do not track altitude shifts," she says, "where warming tem- peratures make farmers move

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