Kenya has said it will make prompt payment from July to coffee farmers for cherries delivered to factories, once an industry report presented to President Uhuru Kenyatta on Thursday is implemented.
The report tabled by the Presidential National Task Force on Coffee Sub-Sector Reforms has recommended that coffee farmers be paid at least 40 percent of the prevailing price on the spot for cherries they deliver.
Depending on the market prices, the minimum advance payments farmer will get for a kilo of cherries will be 0.15 U.S. dollars, the report, whose implementation will start in the next few weeks, recommends.
Speaking after receiving the report, President Kenyatta said he wants to see a revived coffee sub-sector, where it is the farmer who benefits and not the broker alone.
"We are keen to see coffee come back and that will be through restoring the trust of farmers in coffee," Kenyatta said.
Kenya has traditionally exported semi-processed coffee as little value addition is carried out in the country. Coffee contributes one percent of the East African nation's Gross Domestic Product.
Official data indicates that Germany is the largest market for Kenyan coffee at 25 percent of all exports.
Other key markets are U.S. and Canada which jointly consume 16 percent while Belgium absorbs six percent of Kenya's coffee. Kenya is also eyeing China as a potential market for the country's coffee.
In order to boost the industry earnings, the government has also liberalized the milling and marketing of coffee.
Besides the rule on prompt payments, the report recommends a subsidy program to cater for smallholders and small estate coffee farmers.
The subsidy will be offered as a package including fertilizer, planting materials for new varieties, capacity building and training farmers and rehabilitation of at least 500 coffee pulping stations.
The report also recommends a subsidy program for the sector that will cost 12.1 million U.S. dollars in 2016/2017 financial year and 24.7 million dollars in the next two financial years.
The task force has recommended immediate steps should be undertaken to make coffee farming attractive to the youth since the average coffee farmer now is 60 years.
"One other way of increasing the involvement of the youth in the coffee sub sector is to support value addition initiatives such as street coffee vending, coffee cafes and youth-owned coffee house start-ups," says the report