Sunday, November 15, 2015 I was sabotaged by the cartels, says Nyeri governor

By GUCHU NDUNG'U
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Nyeri County Governor Nderitu Gachagua speaks during the Nyeri County Consultative meeting at Sportsmans Arms hotel in Nanyuki on October 30, 2015. When Governor Gachagua took office in May 2013, he launched what was supposed to be a coffee revolution. PHOTO | JOSEPH KANYI | NATION MEDIA GROUP  

Summary

• His argument was that the coffee would fetch better prices and result in economies of scale when farmers used the second window — that legally allowed farmers to sell directly to the buyers in western capitals.
• Nyeri coffee is the highest grade and is used to mix other coffee in the world.
• The governor is also planning other reforms he says will free the sector from cartels.

When Nyeri Governor Nderitu Gachagua took office in May 2013, he launched what was supposed to be a coffee revolution.

The governor launched an initiative to jointly mill and market coffee from the county.

He banned cooperatives from selling their coffee to private millers and instead asked them to channel their produce through Kenya Cooperative Coffee Exporters (KCCE), which would sell directly to buyers in Europe and other areas.

This way, the coffee would not be sold through the Nairobi Coffee Exchange.

His argument was that the coffee would fetch better prices and result in economies of scale when farmers used the second window — that legally allowed farmers to sell directly to the buyers in western capitals.

International buyers would also get a chance to buy the produce directly from KCCE, cutting out the middlemen and increasing coffee prices.

But immediately he started implementing the measures, a vicious war broke out in the coffee sector.

The reason he opted for this option was — as he says — because the coffee auction is controlled by cartels who dictate the prices of the produce and are not transparent.

According to him, they also lower the grades of coffee so they can pay farmers less.

“By law, they are supposed to announce the price, at which they sell coffee to international buyers, but they do not,” says the governor.

According to Mr Gachagua, the aim of the reforms was to ensure that Nyeri farmers benefit from high world coffee prices.

STATE INTERVENTION

Nyeri coffee is the highest grade and is used to mix other coffee in the world.

“Since we produce speciality coffee, we were entitled to at least one dollar per kilo of cherry due to the high quality. That is what I was fighting for,” he says in an interview with the Daily Nation.

The millers, through the Commercial Coffee Millers and Marketers Agencies went on a campaign against the initiative.

From courts to international media, societies were in civil war.

About 106 factories joined Mr Gachagua’s plan, but four societies opted out and rushed to court.

The impasse led to the suspension of the Weekly Coffee Auction in January last year.

During the January to March impasse, coffee from Nyeri was not sold, indicating how powerful the millers and marketers are in the industry.

In March the national government intervened and the impasse was resolved.

Coffee farmers are now free to choose who will mill and sell their produce. While millers’ secretary Martin Ngare insists the Gachagua initiatives did not work, the governor says they did.

“Before, less than five per cent of coffee was sold directly. The number has gone up to 40 per cent. The prices of Nyeri coffee has hit Sh85. We are heading towards the dollar mark,” he says.

During milling, losses have been reduced from 30 per cent to 17 per cent, the governor claims.

“The farmer used to get back only 70 bags of coffee for every 100 they delivered to millers. With central milling, they get 84 bags,” he says.

Farmers are split depending on which cooperatives they belong to.

The governor is also planning other reforms he says will free the sector from cartels.

For a man who was educated on coffee proceeds, the fight for farmers is personal.
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