Coffee Farmers Reap Benefits from Enhanced Cherry Fund

Kiambu coffee farmers are among the many beneficiaries of the Coffee Cherry Advance Revolving Fund (CCARF), a significant government initiative aimed at supporting smallholder coffee farmers across Kenya. The fund, which was established to provide affordable and accessible advances to farmers with up to 20 acres of coffee land, has seen remarkable success in recent months, particularly with the enhanced financial support from the Kenya Kwanza Government.

Since its inception, the CCARF has made a substantial impact on the coffee farming community. The New Kenya Planters Cooperative Union (New KPCU) has disbursed a staggering Sh5 billion in cherry fund loans to 371,242 farmers. This impressive figure highlights the fund’s role in revitalizing the coffee sector, once a major foreign exchange earner for Kenya.

Kiambu, a prominent coffee-growing region, has borrowed Sh557.9 million, demonstrating a strong uptake of the fund in the area. Other notable counties benefiting from the fund include Murang’a, Embu, Meru, and Tharaka Nithi, which have collectively borrowed over Sh1 billion. This financial support is part of a broader effort to bolster coffee production and ensure that farmers receive the necessary capital to enhance their yields and overall profitability.

The success of the fund can be attributed to several factors. The New KPCU management has pointed to the low interest rates and improved governance as key drivers behind the increased loan uptake. Timothy Mirugi, Managing Director of New KPCU, emphasized that the lack of cumbersome paperwork and the minimal collateral requirements have made the fund more accessible to farmers. This has led to a 354.5 percent increase in loan advancements from mid-November 2023 to early August 2024.

Kiambu’s prominence as one of the largest beneficiaries in the first tranche of Sh2.9 billion disbursements underscores its significant role in the coffee sector. Additionally, Nyeri County has emerged as the top beneficiary, with 70,660 farmers borrowing Sh701.1 million. Kirinyaga follows closely, with 70,353 farmers accessing Sh566.7 million. These figures highlight the critical role of Mount Kenya counties in driving the success of the cherry fund.

The fund’s impact extends beyond traditional coffee-growing regions. Emerging coffee counties such as Trans Nzoia, Uasin Gishu, and Migori have also seen substantial disbursements. As of the latest report, Sh582.7 million has been advanced to 19,963 farmers in these areas, reflecting the fund’s growing reach across the country.

Recent data reveals that between July 29 and August 5, 2024, the New KPCU disbursed Sh69.2 million to 5,370 farmers across 14 counties. Machakos County received the highest disbursement of Sh45.98 million, benefiting 4,915 coffee farmers. This support comes at a crucial time for Machakos, which is currently experiencing its peak coffee-picking season.

The Cherry Revolving Fund was initially established in 2019 with Sh3 billion during the 124th Session of the International Coffee Organization (ICO) by former President Uhuru Kenyatta. The fund received a significant boost in December 2023 with an additional Sh4 billion from the Kenya Kwanza Government. This injection of funds is part of a broader strategy to rejuvenate Kenya’s coffee industry and ensure farmers receive fair compensation for their produce.

The government has also introduced a Guaranteed Minimum Return (GMR) of Sh80 per kilogram of coffee cherry, up from the previous Sh20. This new policy is expected to further support farmers by providing a more stable and predictable income, reinforcing the commitment to revitalizing Kenya’s coffee sector.

In conclusion, the enhanced Coffee Cherry Advance Revolving Fund has proven to be a vital resource for coffee farmers across Kenya. With continued support and improvements, the fund promises to sustain the growth and development of the coffee industry, ensuring that farmers remain at the forefront of this crucial agricultural sector.