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State to pay up Sh641m coffee debt
Story by ZEDDY SAMBU Publication Date: 2/13/2006
The Government will pay coffee farmers Sh641 million it owes them by June.

Farmers will also get soft loans when the proposed Coffee Development Fund becomes operational by mid-year.

Mr Ndwiga

These are among key suggestions by a task force set up last year to look into the plight of farmers.

Cooperatives and Marketing Development minister Njeru Ndwiga yesterday said the report would officially be presented to him before the week ends.

"We are expecting the report this week, after which the proposals will be implemented," he told the Nation on telephone.

The report was prepared by a team of officials drawn from the three line ministries of Cooperatives, Finance, and Agriculture.

Mr Ndwiga said the Government took over the Sh641 million debt, accrued over four years, because the Coffee Board of Kenya was cash-strapped and could not pay. The money is for coffee sold by the board.

He said the cost of starting the proposed fund would be worked out by officials from the three ministries.

The minister was responding to complaints by the Coffee Growers Association, which had accused the Government of failing to address farmers' problems.

Among other things, the association wants the fund quickly set up.

"The fund will help farmers access credit at affordable rates, " according to association chairman Zack Gakunju.

Speaking at a special general meeting of the association at the weekend, Mr Gakunju blamed the crisis in coffee farming on neglect, high production costs, delay in payments and poor marketing.

Delayed payments, he said, could be avoided if millers and marketers stuck to the law as spelt out in the Coffee Act.

"Millers should mill coffee within 48 hours of receipt and pay within two weeks," he said.

These rules should also apply to both small and large coffee estates.

The move will help cut industry debts amounting to Sh13 billion, which he blamed on extreme dry weather and the introduction of the structural adjustment programmes in the early 1990s.

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