Earlier this month, coffee farmers from the Mount Kenya region came out in the hundreds to protest against the market exploitation they say they have faced for years. This was not the first protest by Kenya’s coffee farmers, nor is it likely to be the last.
Still, farmer frustrations seem to have peaked recently, following a flurry of news reports at the end of 2015 that exposed widespread corruption in the industry. The protests also come on the heels of Kenya’s National Coffee Conference, during which the Ministry of Agriculture re-emphasized its plans to expand coffee farming beyond traditional coffee growing regions of the country; a tall order, given that production this year was only about 40 percent of what it was 30 years ago.
In the heyday of Kenyan coffee in the late 1980s, the country’s farmers produced almost 120,000 tonnes of the cash crop each year. A decade later, despite the government’s efforts to encourage production, output had dropped by more than 50 percent.
There were several reasons behind this precipitous drop. During the 1960s, 70s, and 80s, Kenyan coffee benefited from the International Coffee Agreements (ICAs) that were in place, which helped keep prices stable, in part by keeping supply steady through a system of export quotas. According to experts, the ICAs was in some ways beneficial to developing countries, giving them the ability to organize collectively and shielding their vulnerable smallholders from market volatility; though some smaller producers were dissatisfied with their smaller market shares. The end of the 1983 ICA in 1989 suspended the export quota system, enabling countries like Brazil and Vietnam to produce more coffee, forcing global prices down, and making it more difficult for Kenyan coffee to compete.
Although the 1990s ushered in a period of productivity for the industry, the effects of disease and pests, along with the steady decline in coffee prices between 1998 and 2002, caused both production and yields to plummet in the early 2000s. In 2009, following a prolonged drought, output fell to its lowest since 1961—34,000 tonnes—almost a quarter of peak production levels. In the following years, numerous initiatives designed to increase cultivated area and yields helped buoy production, and output rose by about 14 percent annually between 2009 and 2013.
Several of these production-boosting initiatives have come out of the nation’s Coffee Research Institute (CRI), a division of Kenya’s Agricultural & Livestock Research Organization (KALRO) which gets funding through special taxes levied on farmers, the Kenyan government, and donations from the international community. The EU, the largest market for Kenyan coffee, has invested millions into the CRI over the last decade, which has helped the CRI develop disease-resistant coffee varieties, and in more recent years, funds have been directed towards training and greenhouse construction. Despite these efforts, however, production continued to falter.
Coffee yields suffered significantly in 2011 thanks to erratic rainfall which allowed disease and pests to thrive. And unfortunately, experts fear that yields may only continue to suffer into the future, thanks in part to climate change. A recent study, published in the journal of Agricultural and Forest Meteorology, found that in Tanzania, where temperature trends are very similar to those in Kenya, a 1°C increase in nighttime temperatures can cause crop yields to decrease between 14 and 27 percent per hectare; and Tanzania is expected to experience nighttime temperature increases of between 2-4°C by 2100.
Yields have also been dampened by farmers’ lack of access to financing and their resultant inability to afford high-quality fertilizers and pesticides. Their inability to afford such products is in part due to the fact that Kenyan coffee farmers, like many smallholders across developing countries, receive very little money for their product. Farmers report being paid as little as 30 KSH ($0.30 USD) per kilogram for their raw coffee. That same Kenyan coffee can eventually retail at major western chains for more than 100 times that. Even with the introduction of new seed varieties like the Ruiru 11 and Batian, whose disease resistance inexpensively increases yields; farmers estimate that they would need to be paid between 152-203 KSH ($1.50-$2.00) per kilogram to break even.
On the Nairobi Coffee Exchange, where about 85 percent of Kenya’s coffee is sold, beans often fetch more than double that. Over the 2014/2015 season, prices for Kenyan beans averaged $227 per 50kg bag (454 KSH/kg). Prices reached a market year peak in February 2015, when 50kg bags sold for an average of $267 (490 KSH/kg). Throughout the market year, higher grades sold for as much as $335 (616 KSH/kg). Even the lowest grades of Kenyan beans averaged $123 per bag (246 KSH/kg), and these made up less than 5 percent of all beans sold on the exchange.
Although farmers technically retain ownership of their crop until final sale at the exchange, this has not prevented them from being taken advantage of by middlemen. Some farmers sell their unprocessed coffee cherries at the farm gate to brokers when they need immediate payment. Although this is often far less lucrative, farmers using marketers and the Nairobi Coffee Exchange may have to wait up to six months to receive payment. Though this system is supposed to pay farmers within 14 days, the sheer number of hands that the beans and money have to pass through and the consistency with which delays occur along the way means that farmers cannot rely on timely payment.
Those who have the luxury of waiting for payment typically join cooperatives, but these organizations are not immune to corruption or price exploitation either, as cited in a report by the European Commission and explained by insiders to Kenya’s Daily Nation. They must work with millers and marketers to get the crop processed, listed, and sold on the exchange. Both parties have been repeatedly accused of various types of fraud by Kenyan governors and local news outlets such as the Daily Nation and The Standard. Millers report high milling losses and marketers report erroneous fees and lower coffee grades (all of which are close to impossible to verify) in order to pass back less of their eventual sales revenue to cooperatives. What’s more, there are only 9 licensed coffee mills and 8 marketers in the country, leaving competitive options limited. Even more troubling, more than half of these marketers own one of the commercial mills, making it even easier for bean theft and the fraudulent reporting of losses, grading, and fees.
Barriers to entry, both legal and illicit, make it difficult for new competitors to emerge or for cooperatives themselves to mill and market their own product. Licensing fees are high and infrastructure investment is expensive. Most prohibitively, a bank guarantee of $1 million is required to sell on the Nairobi Coffee Exchange. When these hurdles have been overcome or farmers have tried to engage in direct sales, there have been reports of intimidation by existing players and thefts of coffee that authorities believe to be coordinated.
As farmers face pressure to sell their crop for a tenth of the average going rate on the exchange, their plight is finally garnering attention from the government. Kenya’s parliament is currently considering a bill that would implement a minimum price guarantee for coffee and tea. The new legislation would also grant farmers payment upon delivery. Irungu Kang'ata, the author of the bill, is an MP from Murang’a County, where 60 percent of small-scale farmers grow cash crops of tea or coffee. Kang'ata remarked that the policy forces “the government [to] shoulder all market inefficiencies and the attendant corruption in the value chain as exposed by the Nation newspaper."
Other initiatives have been introduced at the county level but the results have been mixed. For instance, in 2013, the Governor of Nyeri county, another major coffee producer in the Mount Kenya region, attempted to reform the local coffee industry and help farmers get better prices by bypassing traditional miller and marketer relationships and selling directly to international players. This meant mandating that all coffee in the county be milled through specified factories, in order to increase accountability and facilitate direct sales to the global market. Most notably, the governor, Nderitu Gachagua, promised a price guarantee of 130 KSH/kg ($1.30/kg) to farmers. The policy quickly backfired as the local government struggled to find international buyers. This meant that the coffee sat unsold and farmers were not paid for over a year.
Gachagua has not given up on reforming the industry. This past October, he announced a shift in policy, insisting that “as a county government we are not interested in marketing the county’s coffee, but to ensure that our farmers gets what they deserve from what they produce.” He is now pushing a law that would ensure the county’s coffee farmers are paid on time, limit cooperative fees paid by farmers, and ban multiple licensing so that millers and marketers cannot be owned by the same entity. He has also worked to provide coffee farmers with subsidized fertilizer and implemented a partnership with the local university to have students audit losses and grading efforts at the county’s mills.
But most of these reform policies have yet to be implemented, and coffee farmers in Nyeri and surrounding counties are threatening to boycott harvesting more than 60 million kilograms of raw coffee cherries and quit cultivating the crop altogether.
Given the meager returns coffee farmers have been forced to accept over the years, it should come as no surprise that farmers are uprooting their coffee in favor of more profitable crops. If Kenya wants to expand production of its world-renowned coffee, it must first address the widespread concerns and grievances of the country’s coffee farmers.
What Information Do We Collect?
The information we gather enables us to personalize, improve and continue to operate the Services. We collect the following types of information from our users.
IP Address Information and Other Information Collected Automatically:
· We automatically receive and record information from your web browser when you interact with the Services, including your IP address and cookie information. This information is used for fighting spam/malware and also to facilitate collection of data concerning your interaction with the Services (e.g., what links you have clicked on).
· Generally, the Services automatically collect usage information, such as the number and frequency of visitors to the Site. We may use this data in aggregate form, that is, as a statistical measure, but not in a manner that would identify you personally. This type of aggregate data enables us and third parties authorized by us to figure out how often individuals use parts of the Services so that we can analyze and improve them.
Information Collected Using Cookies:
· Most browsers have an option for turning off the cookie feature, which will prevent your browser from accepting new cookies, as well as (depending on the sophistication of your browser software) allowing you to decide on acceptance of each new cookie in a variety of ways.
We collect statistical information about how users collectively use the Services (“Aggregate Information”). Some of this information may be derived from Personal Information. This statistical information is not Personal Information and cannot be tied back to you or your web browser.
How, and With Whom, Is My Information Shared?
IP Address Information:
Information You Elect to Share:
We share Aggregate Information with our partners, service providers and other persons with whom we conduct business. We share this type of statistical data so that our partners can understand how and how often people use our Services and their services or websites, which facilitates improving both their services and how our Services interface with them. In addition, these third parties may share with us non-private, aggregated or otherwise non Personal Information about you that they have independently developed or acquired.
Information Shared with Our Agents:
We employ and contract with people and other entities that perform certain tasks on our behalf and who are under our control (our “Agents”). We may need to share Personal Information with our Agents in order to provide products or services to you. Unless we tell you differently, our Agents do not have any right to use Personal Information or other information we share with them beyond what is necessary to assist us. You hereby consent to our sharing of Personal Information with our Agents.
Information Disclosed Pursuant to Business Transfers:
In some cases, we may choose to buy or sell assets. In these types of transactions, user information is typically one of the transferred business assets. Moreover, if we, or substantially all of our assets, were acquired, or if we go out of business or enter bankruptcy, user information would be one of the assets that is transferred or acquired by a third party. You acknowledge that such transfers may occur, and that any acquirer of us or our assets may continue to use your Personal Information as set forth in this policy.
Information Disclosed for Our Protection and the Protection of Others:
Information We Share With Your Consent:
Except as set forth above, you will be notified when your Personal Information may be shared with third parties, and will be able to prevent the sharing of this information.
Is Information About Me Secure?
We store all of our information, including your IP address information, using industry-standard techniques. We do not guarantee or warrant that such techniques will prevent unauthorized access to information about you that we store, Personal Information or otherwise.
What Information of Mine Can I Access?
You can access and delete cookies through your web browser settings.
California Privacy Rights: Under California Civil Code sections 1798.83-1798.84, California residents are entitled to ask us for a notice identifying the categories of personal customer information which we share with our affiliates and/or third parties for marketing purposes, and providing contact information for such affiliates and/or third parties. If you are a California resident and would like a copy of this notice, please submit a written request to the following address: 12 E 49th Street, 11th Floor, New York, NY 10017
What If I Have Questions or Concerns?
If you have any questions or concerns regarding privacy using the Services, please send us a detailed message to email@example.com. We will make every effort to resolve your concerns.
Effective Date: March 11, 2014
b. You shall not (directly or indirectly):i. take any action that imposes or may impose (as determined by us in our sole discretion) an unreasonable or disproportionately large load on our (or our third party providers’) infrastructure; ii. interfere or attempt to interfere with the proper working of the Services or any activities conducted on the Services; iii. bypass, circumvent or attempt to bypass or circumvent any measures we may use to prevent or restrict access to the Services (or other accounts, computer systems or networks connected to the Services); iv. use manual or automated software, devices, or other processes to “crawl” or “spider” any page of the Site;
v. harvest or scrape any Content from the Services;
vi. otherwise take any action in violation of our guidelines and policies;vii. decipher, decompile, disassemble, reverse engineer or otherwise attempt to derive any source code or underlying ideas or algorithms of any part of the Services (including without limitation any application), except to the limited extent applicable laws specifically prohibit such restriction; viii. modify, translate, or otherwise create derivative works of any part of the Services; or ix. copy, rent, lease, distribute, or otherwise transfer any of the rights that you receive hereunder. c. We also reserve the right to access, read, preserve, and disclose any information as we reasonably believe is necessary to: i. satisfy any applicable law, regulation, legal process or governmental request; ii. enforce these Terms of Service, including investigation of potential violations hereof;
iii. detect, prevent, or otherwise address fraud, security or technical issues;
iv. respond to user support requests; or
v. protect the rights, property or safety of us, our users and the public.4. Third Party Services. The Services may permit you to link to other websites, services or resources on the Internet, and other websites, services or resources may contain links to the Services. When you access third party resources on the Internet, you do so at your own risk. These other resources are not under our control, and you acknowledge that we are not responsible or liable for the content, functions, accuracy, legality, appropriateness or any other aspect of such websites or resources. The inclusion of any such link does not imply our endorsement or any association between us and their operators. You further acknowledge and agree that we shall not be responsible or liable, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any such content, goods or services available on or through any such website or resource. 5. Termination. We may terminate your access to all or any part of the Services at any time, with or without cause, with or without notice, effective immediately. All provisions of these Terms of Service which by their nature should survive termination shall survive termination, including, without limitation, ownership provisions, warranty disclaimers, indemnity and limitations of liability. 6. Warranty Disclaimer. a. You release us from all liability for you having acquired or not acquired Content through the Services. We make no representations concerning any Content contained in or accessed through the Services, and we will not be responsible or liable for the accuracy, copyright compliance, or legality of material or Content contained in or accessed through the Services. b. THE SERVICES AND CONTENT ARE PROVIDED “AS IS”, “AS AVAILABLE” AND WITHOUT WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF TITLE, NON-INFRINGEMENT, MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, AND ANY WARRANTIES IMPLIED BY ANY COURSE OF PERFORMANCE OR USAGE OF TRADE, ALL OF WHICH ARE EXPRESSLY DISCLAIMED. WE, AND OUR DIRECTORS, EMPLOYEES, AGENTS, SUPPLIERS, PARTNERS AND CONTENT PROVIDERS DO NOT WARRANT THAT: (I) THE SERVICES WILL BE SECURE OR AVAILABLE AT ANY PARTICULAR TIME OR LOCATION; (II) ANY DEFECTS OR ERRORS WILL BE CORRECTED; (III) ANY CONTENT AVAILABLE AT OR THROUGH THE SERVICES IS FREE OF VIRUSES OR OTHER HARMFUL COMPONENTS; OR (IV) THE RESULTS OF USING THE SERVICES WILL MEET YOUR REQUIREMENTS. 7. Limitation of Liability. IN NO EVENT SHALL WE, NOR OUR DIRECTORS, EMPLOYEES, AGENTS, PARTNERS, SUPPLIERS OR CONTENT PROVIDERS, BE LIABLE UNDER CONTRACT, TORT, STRICT LIABILITY, NEGLIGENCE OR ANY OTHER LEGAL OR EQUITABLE THEORY WITH RESPECT TO THE SERVICES FOR ANY (I) LOST PROFITS, DATA LOSS, COST OF PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES, OR SPECIAL, INDIRECT, INCIDENTAL, PUNITIVE, COMPENSATORY OR CONSEQUENTIAL DAMAGES OF ANY KIND WHATSOEVER, SUBSTITUTE GOODS OR SERVICES (HOWEVER ARISING), (II) BUGS, VIRUSES, TROJAN HORSES, OR THE LIKE (REGARDLESS OF THE SOURCE OF ORIGINATION), OR (III) DIRECT DAMAGES IN EXCESS OF $50.00. 8. Governing Law and Jurisdiction. These Terms of Service shall be governed by and construed in accordance with the laws of the State of New York, including its conflicts of law rules, and the United States of America. You agree that any dispute arising from or relating to the subject matter of these Terms of Service shall be governed by the exclusive jurisdiction and venue of the state and Federal courts of New York County, New York. 9. Miscellaneous. a. Modification. We reserve the right, in our sole discretion, to modify or replace any of these Terms of Service, or change, suspend, or discontinue the Services at any time. Your continued use of the Services following notification of any changes to these Terms of Service constitutes acceptance of those changes. b. Entire Agreement and Severability. These Terms of Service are the entire agreement between you and us with respect to the Services, including use of the Site, and supersede all prior or contemporaneous communications and proposals (whether oral, written or electronic) between you and us with respect to the Services. If any provision of these Terms of Service is found to be unenforceable or invalid, that provision will be limited or eliminated to the minimum extent necessary so that these Terms of Service will otherwise remain in full force and effect and enforceable. The failure of either party to exercise in any respect any right provided for herein shall not be deemed a waiver of any further rights hereunder c. Force Majeure. We shall not be liable for any failure to perform our obligations hereunder where such failure results from any cause beyond our reasonable control, including, without limitation, mechanical, electronic or communications failure or degradation. d. Assignment. These Terms of Service are personal to you, and are not assignable, transferable or sublicensable by you except with our prior written consent. We may assign, transfer or delegate any of our rights and obligations hereunder without consent. e. Agency. No agency, partnership, joint venture, or employment relationship is created as a result of these Terms of Service and neither party has any authority of any kind to bind the other in any respect. f. Notices. Unless otherwise specified in these Term of Service, all notices under these Terms of Service will be in writing and will be deemed to have been duly given when received, if personally delivered or sent by certified or registered mail, return receipt requested; when receipt is electronically confirmed, if transmitted by facsimile or e-mail; or the day after it is sent, if sent for next day delivery by recognized overnight delivery service. Electronic notices should be sent to firstname.lastname@example.org g. No Waiver. Our failure to enforce any part of these Terms of Service shall not constitute a waiver of our right to later enforce that or any other part of these Terms of Service. Waiver of compliance in any particular instance does not mean that we will waive compliance in the future. In order for any waiver of compliance with these Terms of Service to be binding, we must provide you with written notice of such waiver through one of our authorized representatives. h. Headings. The section and paragraph headings in these Terms of Service are for convenience only and shall not affect their interpretation. Contact. You may contact us at the following address: 12 E 49th Street, 11th Floor, New York, NY 10017.