Major Coffee Producer Kenya Still Lacks Processing Plant

By Isaac Mwangi AFKI Original Published: January 30, 2014, 3:28 am
Selective Coffee cherry picking on farms in the Kiambu district of Kenya

A farmer and businessman in the small central Kenya town of Othaya, Paul Njagi is among the thousands of coffee farmers who are increasingly frustrated by the lack of a coffee processing plant in Kenya.

“Any investor who decides to set up one will definitely reap huge benefits,” Njagi told AFKInsider. Othaya is in Nyeri County, about 130 kilometers north of the capital, Nairobi.

The hilly county is one of the main coffee-growing regions in Kenya, and farmers such as Njagi find it unjustifiable that Kenya still has no processing plants more than half a decade after independence.

The country, which has produced coffee since 1893, is famous for the Arabica breed of coffee. The Robusta breed, which is useful in blending Arabica coffee, is in its early stages of development and its market is still green.

“It is unfortunate that because of the high local prices, most coffee farmers do not take coffee in their own homes,” said Joseph Nzioka, who runs a coffee house in Nairobi.

Although the east Africa’s largest economy is a renowned producer of some of the world’s best coffees, the lack of a processing plant has hindered its efforts to benefit fully from the crop.

In addition, the country still suffers from a shortage of experts in instant coffee processing, packaging and branding, and manufacturing of charcoal from coffee husks.

Value addition in production of ready-to-drink coffee and developing infrastructure in coffee producing areas are possible ventures ripe for investors in the coffee sector. There is also a need for researchers, developers and financial services providers to smallholder farmers.

These challenges have led to calls by farmers and other stakeholders to bring on board genuine marketers who will link Kenyan coffee to international market platforms. To assure these international markets of quality, moreover, specialists in quality assurance are sorely needed.

Njagi blames the shortcomings in the sector on the government, saying the problems were due to a lack of political will. The government, he said, has watched disinterestedly as unfair market practices discouraged farmers.

“Unfortunately, some politicians are beneficiaries of the short-cuts in the industry, so the silence is no wonder.” said Njagi.

Value Addition

Coffee Board of Kenya CEO Loise Njeru told a media briefing last year that the future of the coffee industry would be brighter if Kenya could produce and market high quality processed, packaged and branded coffee. The country has for decades depended on overseas industries for processing.

“Apart from drying and roasting, there is little value addition in the coffee exported abroad. We are shifting focus and looking at various ways to add value and sell pure, high quality Kenyan coffee abroad as a distinctive brand,” she said.

The U.S. buys about 20 percent of Kenya’s coffee. Other important marketing destinations are Germany and Scandinavian countries – Sweden, Norway, Denmark.

New customers are coming from Asia, Njeru said, including China, Japan, India and Iran. Other markets include Russia and the Middle East.

Initially, the Coffee Board as the main body in the industry was charged with regulatory and marketing obligations. It was also responsible for coffee auctioning. From time to time, however, amendments to the law have seen some roles shift from the Coffee Board to other bodies.

The Coffee Board still remains at the apex of the industry, but its mandate is limited to regulation, research and development.

The Coffee Research Foundation is now responsible for research services and is financed by the Coffee Board through a levy on coffee proceeds.

The Kenya Planters Co-operative Union (KPCU) dominates the industry as the issuer of most licenses. It accounts for about 70 percent of Kenya’s coffee trade. It issues licenses for trade, roasters, packers, warehouses and auctioneers. Management agent certificates and coffee milling licenses are also obtained from KPCU.

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