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4 The COFFEE QUARTERLY | Issue No. 21 promoting productivity, efficiency and transparency 5

ContentsIn the News ....................................................................7

Let the farmers have choice ...........................................10

Circular No. 1 of 2014 from CBK ..................................14

The EU-CRF Coffee Productivity Project ..........................16

Lessons learned from the US$ 47M Coffee Initiative ........22

Pruning and rejuvenation - a coffee farmer’s experience ..26

Soil nutrition - a necessity that cannot wait ......................28

The case for a regional coffee auction ............................34

Promoting Kenya Coffee in 1936 ...................................40

The Cabrio Ruiru Coffee Fair 2014 ................................42

Cover picture: Mrs. Isabella G. Nkonge, Acting MD, Coffee Board of Kenya. Picture courtesy of IEC Strategy Ltd.

Published by:The Kenya Coffee Traders Association (KCTA)PO Box 646 – 00100 GPO Nairobi, KenyaTel: (+254 20) 2712875Email: [email protected] Website: www.kenyacoffee.or.ke

The Coffee Research Foundation (CRF)PO Box 4 – 00232 Ruiru, KenyaTel: (+254 067) 250 82Email: [email protected] Website: www.crf.co.ke

Production, Marketing and Distribution:IEC Strategy LtdPO Box 13109, 00100-NairobiTel: (+254 0) 721 696 698Email: [email protected] Website: www.iecstrategy.org

Printed at: Majestic Printing Works Limited

For Advertising enquiries, contact:The Project CoordinatorIEC Strategy LtdPO Box 13109, 00100-NairobiTel: (+254 0) 721 696 698Email: [email protected] Website: www.iecstrategy.org OrThe Executive SecretaryThe Kenya Coffee Traders Association (KCTA)PO Box 646 – 00100 GPO Nairobi, KenyaTel: (+254 20) 2712875Email: [email protected] Website: www.kenyacoffee.or.ke

The Publishers invite views and comments from our readers on subjects that will promote the profitable and sustainable production of coffee. Please address your letters to:

The EditorThe Coffee QuarterlyPO Box 646 – 00100 GPO Nairobi, Kenya

LEADER

“Siri ya kahawa ni kilo”

In 2008, then Senator Barrack Obama promised to close the Guantanamo Bay Detention Camp within one year, if he was elected President of the USA. On that memorable night of November 4th 2008, Obama won.

But while still President-elect, Obama was given a full briefing on the threats facing the USA today by the CIA and the FBI. Word has it that one of his first responses to the briefing was: “Why did I want this job?” Perhaps, it had begun to dawn on him that some of his pre-election promises were based on lack of full information.

Why are the pre-election promises of “Cousin Barry” of relevance to us in Kenya, and more so those of us in coffee today? Well in the 2013 election, a team of new leaders were voted into office. Under our new 2010 constitution, these leaders were given a decent level of executive influence in dockets like agriculture. But unlike in the USA, some were not given an in-depth off-camera full briefing on the threats facing agriculture – and in our case, coffee – in Kenya today. This could be contributing to the turmoil in the subsector as newly elected leaders may not have full information on the factors driving the production and sale of coffee in Kenya and the world.

Inadequate information on coffee returnsThe first misdiagnosis may be on how a coffee farmer’s income is arrived at, namely, what it constitutes of. In this debate, the discussion has focused primarily on the price of coffee cherry without anywhere near the same emphasis on factors like volume. Yet, a coffee farmer’s returns are an output of several factors such as: price,

volume, quality, global supply and demand, and market timing. All play a role in what goes into the envelope.

This is clearly illustrated in the case of the tea subsector. In 2012/13, Kenya Tea Development Agency (KTDA) paid KSH.51.3billion to its 530,000 or so farmers. A 13% increase on the KSH.45.31 billion KTDA paid out in 2011/12. Yet, as KTDA (Holdings) chief executive officer Lerionka Tiampati pointed out, the average net selling price per kilo decreased to Sh272.08 from Sh278.08 last year, a 2% dip in price from the previous year. A dip which he attributed to global factors such oversupply of the market, and volatility in tea destinations1.

So why did tea farmers still end up with a 13% pay rise despite a 2% dip in tea prices? Speaking in Nairobi when he released the results, Tiampati attributed the increased income to increased yields due to favourable weather, improved crop husbandry through the farmers field schools programme, and enhanced factory capacities2. So, it was from KTDA focusing on the factors within its control namely: volumes, quality and efficiency.

Another probable misdiagnosis is that Kenya coffee is under-priced. This is a statement that has been repeated so often, it has taken a life of its own. Yet a comparative price analysis of Kenya versus comprador countries compiled by ED & F Man shows that in 2013 Kenya’s AB coffee, which comprised 50% of production, was paid at a similar rate to its comparative Arabica in Ethiopia, Sidamo 2; but at a higher rate than comparative Arabica from Colombia and Honduras, and way higher than Brazil Arabica. The fact is, Kenya gets some of the best coffee prices in the world. So this being the case, what ought we to do to truly boost farmer incomes?

A KTDA factory such as Iriaini Tea Factory in Nyeri can achieve up to 40% average yield potential, or 1.2-1.3kg per tea bush against a yield potential of 2.5-3kg per bush. But a typical coffee society achieves less than 10% average yield potential, or less than 2kg per coffee tree against a yield potential of 30-40kg. We have some of the lowest productivity around: Kenya does 5.4bags per hectare (ha), as Ethiopia does 6.5bags/ha, Colombia 10.7bags/ha, Honduras 11.2bags/ha and Brazil (Arabica) 22.4bags/ha. Rwanda’s total yield is inching ever closer to Kenya’s yet it’s the size of

1 http://www.ktdateas.com/index.php/press-releases/390-small-scale-tea-farmers-earn-sh69-billion-in-revenue

2 http://www.thepeople.co.ke/21301/tea-farmers-receive-sh35-billion-bonus/

– Leonard Muriithi, 70 years, 10kg per tree coffee farmer, Baragwi FCS, Kirinyaga (CQ-19 Page 23)

The views in this publication do not necessarily reflect those of the Publishers. While the Publishers have taken care to ensure accuracy in editing and publishing, neither the Publishers nor KCTA will take any responsibility for any errors. The Publishers reserve the right to edit and publish any sent material.

10

34 40

42

16 22

These are the fundamentals.


Star letter “I write this note to thank you for your quarterly pamphlet. I’m a serious coffee farmer from Kapkolei Multi-Cooperative Society in Nandi South District, and your last issue of the 42kg man, Chief Njue, has changed my attitude positively on coffee farming. Kindly consider sending me a copy of your magazine.”

- John Cheruiyot Yego, Hon. Secretary, Kapkolei Multi-Cooperative Society, Nandi South District

(Ed. Dear John, We are glad Chief Njue’s story had such a positive impact. We have happily included you in our distribution list. Keep reading The Coffee Quarterly for more inspiring articles.1)

1 Are you a serious coffee farmer? If so, to receive your free copy of The Coffee Quarterly, SMS your full names, the name of your coffee society/estate, and your full postal address including postal code number, to: 0721 69 66 98, or email it to [email protected]

IN THE NEWSLEADER

Meet the new Executive Secretary, KCTAJames Michuki Muriuki is the new executive secretary of the Kenya Coffee Traders Association (KCTA). KCTA brings together the buyers of over 80% of Kenya’s total coffee output, and are co-publishers of The Coffee Quarterly together with the Coffee Research Foundation (CRF) and IEC Strategy Ltd.

James, who has a Degree in Agribusiness Management plus a Diploma in Horticulture, both from Egerton University, brings a wealth of training and experience in agriculture and coffee to the job. He was previously at Kofinaf Coffee Mills, Oaklands Marketing Ltd (OCML) and Oakland Estate. He has also served as Executive Secretary, Undugu SACCO Ltd, Nakuru; as a Field Technical officer at Quest Laboratories Ltd, Nairobi; and as an Environmental Auditor at Kenface Enconsults (K) Ltd, Nairobi.

Central Province. If Kenya’s coffee cooperative societies had a yield similar to Iriani Tea Factory of 40%, then at last year’s prices coffee farmers would have earned KSH.49.6billion rather than KSH.12.4billion.

Inadequate use of lessons learned?Is it possible to increase coffee yields to these levels? Yes. And there are people growing coffee yields and quality in Kenya today. Through a program that focused on providing soils proper nutrition, as well as providing regular decentralized on-site crop husbandry training to farmers, TechnoServe Inc. saw average yields go up by 40% and quality improve significantly in two years (see page 20). The Coffee Research Foundation (CRF) has launched an EU-sponsored productivity programme that is providing subsidized training to coffee societies and counties on soil nutrition and coffee crop husbandry (see page 14). The question is, why is our conversation silent on the value of us engaging with such organizations?

The Kenya Institute for Public Policy Research and Analysis (KIPPRA) states that growth in agriculture has a far greater knock-on effect on poverty than growth in industry. For example, the “Chinese miracle” that saw millions lifted from poverty in a generation was mostly powered by agricultural regeneration. A 2009 study prepared for the African Agricultural Technology Foundation on what Africa can pick from China to fuel its own agricultural revolution, notes how China put in work to ensure its markets were opened in ways that promoted exports over imports, provided a stable government that inspired investment and secured property rights, and developed physical infrastructure.

Nevertheless, even with due note of China’s work on its political economy, the study concludes the following: “the study team considers that water and soil related technologies offer the best Chinese examples to export to Africa. Africa is generally a water-challenged land and soil degradation is a problem”. The report also observes how part of China’s secret was to invest in “an extension service of over one million dedicated to getting technology right through to virtually the last farmer”3.

As a result of such steps, the report estimates that China’s largely smallholder-driven agricultural sector is now achieving yields of up to 70% yield potential.

If Kenya used lessons learned from organizations on the ground such as TechnoServe and CRF, and countries such as China, and target the achievable goal of 70% of yield potential on its coffee trees, national yield would rise from 45,000 MT to 350,000 MT. The figure which the Principal Secretary Ministry of Agriculture, Ms. Sicily

3 The Relevance of Chinese Agricultural Technologies for African Smallholder Farmers: Agricultural Technology Research in China, by Ron Sandrey and Hannah Edinger, Centre for Chinese Studies, University of Stellenbosh, April 2009, pg ii-iv

Kariuki, speaking at the Cabrio Ruiru Coffee Fair on Feb 7th 2014, said ought to be our target. Picture the effect this would have on coffee farmer incomes, rural poverty, not to mention Kenya’s current account deficit?

Inadequate information on global trendsNote also that according to the International Coffee Organisation, total global consumption in 2012 was 142million bags while yield was around 145.2million bags.4 And comprador countries such as Colombia, which together with Brazil accounts for 40% of global coffee supply, are already recovering from the leaf rust outbreak of Central America and may hit their highest yield since 2007 (Colombia’s yield in the first 10 months of 2013 of 8.6million bags was higher than its total yield in 2012 of 7.7million bags). And according to the Columbia Coffee Growers Federation, by last year half of that country’s yield comprised specialty coffee, a fast increase from 19% in 2006.5

In such context, do we think the global coffee market will wait on Kenya which produces just 0.5% of global coffee supply; yet now goes around breaking international rules of certification or trade, and ignoring signed contracts?

4 https://globalcoffeereview.com/news/article/coffee-prices-hit-30-month-low-ico5 https://globalcoffeereview.com/news/article/colombian-production-to-october-highest-since-2007

Or would it be easier for the global coffee market to shift to comprador countries like Colombia or Rwanda which are increasing yield and quality, and also uphold international agreements? How does capital behave: is it brave and patient, or cowardly and fleet of foot? When Kenya lost its EU beef export market – which in the 1970s was about 66% of the canned beef consumed in Europe – to countries like Botswana, the world did not stop6.

This is why The Coffee Quarterly supports the call by the PS Agriculture for a stakeholders meeting between National and Devolved Government, and bona fide representation of the entire coffee value chain, on the factors that spur production and sale of coffee, the second most traded commodity in the world after oil.

Such an in-depth off-camera meeting could, in some strange way, give some sort of window into why five years after he first walked into the Oval Office, President Obama still keeps the Guantanamo Bay Detention Camp open.

6 http://www.kenyalondonnews.org/?p=4994

“It can be argued that the primary business of democratic government is the development and implementation of good policy and the optimal allocation of resources to support those policy decisions…

A key factor in making good policy is the use of high-quality evidence about the issues in question so as to define or resolve the range of options available to the policy maker. Bad policy can emerge when the evidence is ignored or compromised…

Thus governments can become constrained by earlier policy decisions that are not easily reversible because there may be a popular or political perception that they are effective when in fact they are not.”

- Sir Peter Gluckman, chief science advisor to the Prime Minister, New Zealand”

(http://www.stuff.co.nz/national/politics/4904120/How-to-make-good-government-policy)


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8 The COFFEE QUARTERLY

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Being customer focused, Kofinaf coffee mill has established timely delivery of services as key to customer satisfaction.

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• Coffee is received and accepted in the mill the same day it is delivered, it is milled within 7 days.

• The processed and graded clean coffee is dispatched to marketers’ warehouse within 7 days from milling.

Farmers receive their milling statement 7 days after the milled coffee is dispatched to a warehouse.

This swift system ensure the farmers’ coffee reaches the market within the shortest time to take advantage of the

best price offers at the coffee auction and eliminates unnecessary delays that amount to surcharges that eat into

farmers profit.

The management system has established a traceable document system that accounts for every bean delivered to our

mill and the farmer is kept abreast on this vide a timely milling statement.

The certificate was issued by SGS the world recognized and accredited certification body and is valid for three

years till 2015 when it shall be continuously renewed, while other organizations take years to put up a functional

management system, it took Kofinaf a record 18 months from inception to certification banking on other certification

standards that the management has embraced

Kofinaf Coffee Mill boasts to have the best milling line for processing and grading coffee in the country, the most

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COVER STORY COVER STORY

Let the farmers have choiceMrs. Isabella G. Nkonge is an agronomist by training and the acting managing director of the Coffee Board of Kenya, the Regulator of the Kenyan coffee industry. Despite a rather intense start to the year, Mrs. Nkonge set aside time from her busy schedule to speak with The Coffee Quarterly on emerging issues in the subsector. She was joined for the interview by the Board’s legal officer, Ms. Frankie Welikhe.

CQ: Thank you for making the time. Coffee issues are all over the general media, who is supposed to be solving them?

Mrs. Nkonge: It’s not one person who will solve all the issues in coffee; it’s all of us. There are issues or gaps that need to be addressed, but what needs to happen is for all stakeholders from the value chain to

discuss and agree. This is why its’ called “a chain”, it’s because we are all connected. We all need each other.

What is your position on counties milling and marketing coffee?

What we are interested in is a level playing field for all. When Cap.333 was repealed, the sole exclusivity of milling by KPCU (Kenya Planters Co-operative Union) and marketing by CBK was removed and competition came in. So we are saying, let’s have competition and let it be open. This is what the Coffee Act of 2001 brought on board and we are under it. So if a person or an entity wants to acquire coffee, let that person or entity acquire that coffee following the laid down legal framework. Note also that the Crops Act of 2013 has as its one of its objects to, “promote

competiveness in the crops subsector and to develop diversified crop products and market outlets” (3 (e)). So let us have more players on board so that farmers have a choice.

So, the general coffee rules and regulations that were drawn from the Coffee Act of 2001 still apply?

Exactly. These rules shall continue to apply until the Cabinet Secretary for Agriculture, Livestock and Fisheries gazettes the Crops Act of 2013. Under the existing coffee rules, growers sign contracts with millers and marketing agents for services rendered. If either party wishes to exit from that contract, they have to give notice of at least three months during which if one party had an obligation to the other, like an advance payment, it should be met. If you break that contract, what you are doing is exposing coffee farmers to the potential suffering of legal suits.

Let us also keep in mind that some international buyers have already financed certification of Kenyan coffee. The industry needs to take cognizance of these facts and respect international standards.

Can a farmer take coffee to the auction directly, say through his society?

Under the current coffee rules, coffee growers cannot auction their coffee directly. However, there is a proposal to allow growers to offer coffee to the auction directly so long as they meet the minimum threshold of 2,400 metric tons (MT) of clean coffee. This option is therefore anticipated in future. Growers can also sell coffee via direct sale (second window) because that option currently exists. Just follow the right procedure and the laid out regulations.

What are some of the changes we can expect in coffee based on the new agriculture laws?

According to the Agriculture, Fisheries and Food Authority (AFFA) Act of 2013, the Authority shall be headed by a Director-General with eight Directors, one for each of the eight regulatory crops. These crops are: coffee, tea, horticulture, cotton, coconut, pyrethrum, sisal and sugar. CBK shall become part of this Authority under the Director General, and headed by a Director. This Authority, once fully in place, shall operationalise the Crops Act of 2013.

As for the Coffee Research Foundation (CRF), it shall come under the Kenya Agricultural Research and Livestock Organisation (KARLO) and shall be headed by a Director reporting to the Director-General of KARLO. The Director-General of KARLO shall be in charge of all research institutions in Kenya including Kenya Agricultural Research Institute (KARI), CRF, Tea Research Foundation, among others.

Some of the aims of the new agricultural laws and the Parastatal reforms include harmonizing the sector so that it achieves the objectives of higher productivity and value for Kenya, as well as reducing costs.

What is the current status of the draft Coffee National Strategic Plan?

The draft National Strategic Plan is continuing to be worked on and, I may be biased but, what the draft Strategy proposes to do for coffee is really good. The draft Strategy has about six thematic areas:

1. Policy and legislative framework2. Research and development3. Production enhancement and diversification 4. Manufacturing capacity enhancement5. Trade, investment and services deepening6. Welfare and social issues in the coffee industry

Each of these thematic areas has under them goals from which programmes and activities shall be drawn. From April last year however, the draft Strategy has been on hold due to devolution, planned changes in the agricultural sector and Parastatal reforms. The draft Strategy’s roadmap includes getting a buy-in from stakeholders in the subsector, the Principal Secretary responsible for the State Department of Agriculture, the Vision 2030 Secretariat, because it is only when it is fine-tuned that the draft Strategy is presented to the Cabinet Secretary for Agriculture, Livestock and Fisheries for consideration.

The unpredictability of coffee prices is causing some farmers to uproot their trees to plant other crops or invest in real estate. What can be done to make prices more predictable for farmers, a minimum cherry price perhaps?

To mitigate risks of market dips, there are two aspects that in my opinion ought to be focused on:

12 The COFFEE QUARTERLY | Issue No. 21

allows uprooting of coffee. If you tax idle coffee estates, the estate owners will just uproot the coffee! Can we instead encourage productive estate management by professional estate managers for example? Where the owner retains ownership of the estate but the manager runs the estate professionally, earns a return and brings a fair share of that return to the owner every year? Our youth can also become professional estate managers and look for such contracts with estates as this also creates youth employment. These are the sort of approaches I would rather go for.

What can be done to curb subdivision of coffee farm land? For example,

do you think requests to transfer use of land from agricultural land to commercial plot should be suspended or even banned in coffee counties?

If someone is offering a farmer KSH.2million for his coffee farm, will he get that from growing coffee? If the answer is yes, fine. But if the farm can’t give him that currently, then can we provide that grower an economic alternative that makes it financially sensible for him to keep growing coffee? The reality is we are now living under the Coffee Act of 2001 where you cannot ban somebody from uprooting coffee. Now, it is true that we need to harmonize agriculture and land laws in order to enhance productivity and reduce sub-division of farm land. This however is a national issue that requires all relevant stakeholders to brainstorm and suggest options that provide real alternatives to the coffee farmer.

The goal is to put the coffee farmer in a position where producing high quality and quantity cherry is the best socioeconomic decision he can make for his own future, because, the future of coffee is bright. And we want the coffee farmer to benefit from that bright future. Therefore, as the Board together with all stakeholders continues to focus on improving coffee development; I urge all coffee growers to remain focused. I have no doubt that with effort, sound agricultural practice, and the spirit of cooperation; Kenya Coffee growers shall fairly soon reap sweet rewards from their trees.


Mrs Isabella G. Nkonge, Ag Managing Director, Coffee Board of Kenya, and the Board’s legal officer, Ms. Frankie Welikhe reviewing Circular No. 1 of 2014 on coffee marketing.

1. Coffee marketing and marketing systems: there is a need to review coffee marketing systems to accommodate issues emerging from the current situation. Every system can improve – even good ones. I will not say I have the solution that it is a minimum cherry price or something, but if we discuss as stakeholders, all links in the value chain, we shall find the best solution for the industry.

2. Coffee productivity: the average yield at the society level is below 2kg per coffee tree per year, on a coffee tree that can produce 30 to 40kg. The coffee subsector must increase productivity. Even if average yield was to go up to just to 10kg, can you imagine the difference that would make? Kenya can do above 300,000 MT per year instead of the 45,000 MT currently produced. Some of this increase should come from expansion into new coffee growing areas in Western Kenya and North Rift, but the most important thing is to increase productivity per coffee tree.

Coffee prices are determined by the forces of supply and demand, quality, and timing of the market. If a grower neglects his coffee than asks for a minimum cherry price, isn’t he being unfair to other farmers in his society who are taking good care of their coffee but being paid the same? So even minimum cherry price, unless you say it’s based on grade and class, needs to be discussed by the value chain. And I say discussed honestly because the role of the

Regulator is also to try to reconcile the industry players when differing viewpoints arise among them.

One of the instruments that coffee cooperative societies put in place to stabilize farmer income is enterprise diversification where during good years, investment was made in society assets like real estate,

dairy among others. The goal was that during low coffee price years, the returns from these assets’ would come in to cushion farmers. Currently however, it’s not clear how many coffee societies are passing returns from these assets to their farmers. Is there a plan to address this, such as enforcement of audits of society assets and returns?

Coffee cooperative societies have their books audited by the Ministry of Industrialization and Enterprise Development, as that is where cooperatives fall under. The Commissioner of Cooperatives sits there, and DCOs (District Cooperative Officers) report to him. It is their responsibility to ensure good governance in cooperatives. But in the event that we observe something wrong, we raise it with our colleagues at Industry. As harmonization between National and Devolved Government continues, especially with performance contracting, I believe such issues shall be addressed.

One of the rules that is said to have helped stabilize the tea subsector was the adoption of weighted voting based on productivity i.e. shares. Do

you think coffee would benefit from a similar policy?

Yes. The concept has worked. The Exchange Committee appointed to run the Nairobi Coffee Auction is working to ensure members of the management committees are people with a stake in coffee. The Second Schedule of the (Nairobi) Coffee (Exchange Trading) Rules (2012) states a certain minimum productivity for coffee growers to qualify to be members of the Exchange Committee. And this requirement is at every level: society, society representative, estate, estate representative, all the way to dealers and marketing agents (or millers or licensed warehousemen) representatives. The reason for this is because when somebody has a stake in an industry, they are more concerned for its growth and development. So the overall direction of having industries driven by people with a stake in it is a good one.

In Kenya, there are calls for a tax on idle land to be levied to curb speculation and maximize return on our limited high potential land. Do you think such a tax should also be levied on idle coffee estates?

I wouldn’t go for a tax on idle coffee estates in our context; I would rather go for an incentive to reward productive coffee estates. You know in the days of Cap.333, uprooting of coffee trees was banned. But we are now under the Coffee Act of 2001 which



COFFEE BOARD OF KENYACOFFEE PLAZAEXCHANGE LANEOFF HAILE SELASSIE AVENUEP.O. BOX 30566-00100NAIROBI, KENYA

CIRCULAR NO.1/1/2014

30th January, 2014To: County Executive Members – Agriculture (Coffee Growing Areas) Kenya Coffee Producers and Traders Association Kenya Coffee Traders Association Kenya Coffee Producers Association Coffee Dealers of Kenya Association Commercial Coffee Millers and Marketers Agents Association

STATUS UPDATE ON THE COFFEE ACT AND THE DEVOLVED GOVERNMENT

1.0. THE OPERATIONALISATION OF THE AGRICULTURE, FISHERIES & FOOD AUTHORITY ACT (AFFA ACT)

As you may all be aware, on 14th January 2013 the AFFA Act was assented to by the President and was given a commencement date of 25th January, 2013.

Section 1 of the AFFA Act provides that the Act would come into operation on a date to be appointed by the Cabinet Secretary in the Kenya Gazette. On 17th January 2014, the Cabinet Secretary via Legal Notice No. 4 of 2014 appointed 17th January 2014 as the operational date.

1.1. EFFECT OF THE OPERATIONALISATION OF THE AFFA ACT

The First Schedule of the AFFA Act at Paragraph 3 defines the term “Former institution” as any institution established by a repealed Ac. It is noteworthy however that the Coffee Act is supposed to be repealed by the Crops Act (Act No.16 of 2013). The Crops Act is not yet operational as the Cabinet Secretary is yet to gazette it. Therefore, the implication of the non-operationalisation of the Crops Act is that:

i) The Coffee Act has not yet been repealed and therefore the Coffee Board of Kenya is still in existence.

ii) The provisions of the Coffee Act and the Coffee Regulations are still in operation and are to be adhered to.

iii) All players in the Coffee Industry are expected to adhere to the provisions of the Coffee Act and the Coffee Regulations thereunder.

iv) The Board specifically draws the attention of the County Governments and all industry players to the following:a. Section 24 of the Coffee Act 2001 requires the Board to license various activities in the

trade-chain and specifically provides that no person shall conduct any coffee business (milling, marketing, warehousing) unless licensed and registered by the Board.

b. The Coffee Act requires that growers secure annual milling and marketing contracts which protect both the growers and millers. Specifically the Coffee (General) Rules, 2002, Rule 22 require that the terms of the milling contract between a grower and a miller be reduced into writing and registered with the Board.

c. No party should induce any person to breach contractual obligations existing in Milling or other contracts and due process should be observed in terminating such contracts by giving requisite notice and clearing outstanding debts or other obligations prior to such termination.

d. Parties are reminded that such breach may render the culprit or the party inducing the breach to unnecessary legal consequence with serious financial loss.

2.0. THE DEVOLVED GOVERNMENT UNDER THE CONSTITUTION OF KENYA, 2010

At the inauguration of the Constitution, certain changes were envisioned in Government, one of the major changes was the two systems of Government, that is the National and Devolved Government, which essentially led to the creation of the County Governments (the devolved Government system).

The Fourth Schedule of the Constitution sets out the distribution of functions between the National Government and the County Governments. One of the functions that have been devolved is Agriculture; including crop and animal husbandry.

The Board relies on Article 191(2) (b) of the Constitution which provides that where there is a dispute between the National and County legislation then the National Legislation prevails if the national legislation is aimed at preventing unreasonable action by a County that is prejudicial to the economic, health or security interests of Kenya or another country. The Board also supports the farmers’ constitutional right of freedom of association.

3.0. CONCLUSION

i) The Board welcomes and indeed encourages views on reforming the coffee industry but cautions against any unilateral action that disregards existing law and contractual obligations.

ii) Harmony and consensus ought to be sought amongst the various coffee growing counties, relevant Central Government Ministries and the various stakeholders in coming up with Legislation, Rules and Regulations as well as policies affecting the Coffee Trade-chain.

The Board looks forward to working with all industry stakeholders in the coffee industry to ensure a prosperous industry.

ISABELLA NKONGE (MRS)Ag. MANAGING DIRECTOR

CC: Sicily K. Kariuki (Mrs.), MBS Principal Secretary State Department of Agriculture

Ministry of Agriculture, Livestock & Fisheries Kilimo House NAIROBI

Kimamo Kuria Board Chairman NAIROBI

The Executive Officer Nairobi Coffee Exchange NAIROBI

All Coffee Advisory Officers – Coffee Board of Kenya


FEATURE

1. BackgroundThe profitability of coffee farming is reduced partly by the rising costs of production which in turn is affected by the cost of chemicals (fungicides) for control of fungal diseases such as Coffee Berry Diseases (CBD) and Coffee Leaf Rust (CLR).

Coffee Research Foundation (CRF) has developed and released two coffee varieties (Ruiru 11 and Batian) that are resistant to CBD and CLR, thereby eliminating the need for intensive fungicide spraying regimes. Access and availability of the planting material of these coffee varieties need to be improved to enhance their adoption (see CRF advert on facing page). The uptake of the varieties can be via replacement and conversion of the susceptible varieties that are already in place, coupled with establishments of coffee into new areas. The ultimate objective is to increase both coffee production and productivity in line with Kenya Vision 2030.

The European Union has granted 2.0 Million Euros to support the enhancement of coffee production and productivity in Kenya through the Coffee Productivity Project (CPP), which is being implemented by CRF. The Government of Kenya will contribute 652,800 Euros in provision of structures to facilitate the implementation of this project, which started in July 2013 and will end in June 2017.

2. Expected ResultsThe project has three key result areas:

Result 1: Supply of planting materials of Ruiru 11 and Batian varieties from CRF increased.

CRF is the primary source of clean coffee seed and tissue cultured plantlets. It also supplies the seed to other coffee nurseries in the country, especially cooperatives and estates. The renewed increase in demand for planting materials therefore requires that CRF produces increased quantities of seed of the

disease resistant varieties and also produces coffee plantlets from its tissue culture facility. The primary role of CRF will therefore be to produce the seed for propagation in its nurseries and by other nursery operators in different regions in the country. The capacity of CRF regional centres in Meru, Kericho, Bungoma and Trans Nzioia Counties will also be expanded to produce more planting materials nearer the farmers.

Result 2: Capacity of cooperative societies and private nurseries to raise coffee seedlings expanded.

Cooperative societies are currently licensed to produce coffee seedlings in their farms or near the coffee factories. They obtain coffee seed from CRF and sell the seedlings to their farmers under appropriate arrangements. The expansion of their capacity to produce seedlings at their nurseries will complement the production of coffee seedlings at the CRF nurseries and in the long run takeover the larger responsibility for seedlings production. This will leave CRF with the responsibility of production of seeds, production of clonal materials to establish gardens to produce scions for grafting, and production of planting materials by tissue culture. The capacities of the cooperatives and private nursery operators shall be increased through training in nursery management, grafting techniques, quality control and inspection for compliance with quality standards. Some beneficiary coffee nurseries will be selected through a call for proposals for a grant within the project in order to improve their nursery facilities.

Youth and women will be trained to provide grafting services to farmers based at the local cooperatives level with scions provided by CRF stations or approved nurseries and clonal gardens. The nurseries will be inspected to determine their capacity, adequacy of plant hygiene, water supply and management capacity. They will receive regular inspection and technical support from CRF.

Coffee Productivity Project (CPP) in support of increased coffee production and profitability in Kenya

Elijah K Gichuru, PhDAg. Director of Research

Coffee Research FoundationPO Box 4-00232, Ruiru


FEATURE

Result 3: Area under coffee production increased

There is need to disseminate information about the improved coffee varieties, as well as coffee production and processing techniques to the emerging coffee growing areas. This will ensure the national area planted under coffee increases and the quality of coffee is maintained. This result area will be supported by the following activities:

i. Dissemination of information on the improved coffee varieties through broadcasts, production and distribution of training materials and conduction of farmer/stakeholder meetings with particular focus on North Rift, Western, Coast and Nyanza regions.

ii. Establishment of coffee production demonstration/adaptability trials and Farmers Field Schools within the catchment of partners engaged in the multiplication and distribution of planting materials. Preference will be given to the new coffee growing areas because they will be doing both adoption and up-scaling.

iii. Training of Trainers, who will then train farmers.

iv. Expansion of coffee production to new areas will require soil suitability surveys and capacity building of the farmers and their institutions. County Governments are expected to uptake this activity.

v. Undertake baseline and end of project socio-economic and adoption studies in coffee growing areas.

3. Target beneficiariesi. Existing coffee farmers who will access coffee

materials such as seedlings and scions of improved coffee varieties for top working.

ii. The rural youth and women who will take up roles in coffee nurseries, coffee grafting and in the increased rural agricultural labour demand.

iii. Service providers will benefit from the increased service delivery opportunities emerging from the increased coffee production.

4. Government inputsGovernment inputs will include maintenance of appropriate legal and policy framework, and physical infrastructure that will enable uninterrupted operation of the project. The National and County Governments

will be involved in extension services, mobilization and promotional activities. The Government of Kenya through CRF and other agencies will contribute technical skills and facilities for various activities of the project.

5. How to get involved with the EU-CRF Coffee Productivity Project (CPP)

County governments, cooperative societies and interested partners such as private nurseries are hereby invited to contact CRF on the same. Kindly note that proposals seeking engagement with the project need to be supported by some needs-analysis showing the viability of the activities they wish to engage the Project in, and, where possible, accompanied with a business plan. For example, an owner of a private nursery can show in her proposal how her coffee nursery can combine other crops (fruit trees, bananas etc) to enhance its sustainability. This is because entrepreneurs who are targeting direct monetary gains for example, the demand for coffee seedlings or scions in their catchment area will need to be substantial for it to be a sustainable stand-alone business activity. For cooperative societies and county governments however, other options exist because they can afford to subsidize the activities and benefit indirectly through increased coffee production in their respective societies or counties over time. If a society or county wants to promote the Project’s activities in its catchment area, the most advisable method is to first of all identify people who have the capacity to be trained as Master Trainers. These

Youth and women learning top working (Field grafting) technique to convert susceptible coffee varieties to disease resistant ones.


all depends on local conditions because this is an interactive process. Locations to establish the Project’s overall activities, such as demo-plots, are currently also being scouted for. Please note that the detailed calendar of activities spelling out when the project shall be in which society or county shall be developed as the Project rolls out as it shall be done in partnership with implementers and beneficiaries. Keep in mind that the Project is a complement to ongoing CRF and coffee stakeholders’ activities, and runs alongside them. Stakeholders including CRF will continue to spend on current activities identical to those of the Project, as they have always done. To find out how your cooperative society or county can engage with this Project, contact:

Director of ResearchCoffee Research FoundationPO Box 4 - 00232, RuiruLand line telephone: 020 217 6420Mobile telephone: 0700 756 753 / 0724 527 611 0733 333 060Email: [email protected] or [email protected]

FEATURE

people can then be trained by CRF experts in grafting and nursery operations and thereafter, be given back-up as they then go out and train other farmers in their catchment area on the same. This approach also enhances sustainability of the training, and

widens reach. Societies and counties could thereafter, for example, consider meeting the labour costs of their grafting teams.

Land to establish the activities can belong to any entity as long as it is adequately accessible to the general public. For example, a women’s/youth group wishing to operate a nursery or clonal garden can use a member’s farm or any other host like a nearby church etc. Several demo plots can also be in one area. It

The Kenya Coffee College Training Programme 2013/2014

Course Title Date ExpectedCoffee Factory Management 14th July – 27th July 2013Coffee Farm Management 4th August – 17th August 2013Coffee Factory Management 1st September – 14th September 2013Coffee Nursery Management (Top Working / Grafting) 22nd September – 28th September 2013Youth in Coffee 6th October – 12th October 2013 Coffee Factory Management 27th October – 9th November 2013Coffee Stakeholders Seminars December 2013 Coffee Pest Management 19th January – 25th January 2014 Coffee Farm Management 2nd February – 15th February 2014 Coffee Quality Assessment 16th February – 22nd February 2014 Women in Coffee 2nd March – 8th March 2014 Coffee Factory Management 16th March – 29th March 2014 Coffee Nursery Management (Top Working / Grafting) 13th April – 19th April 2014 Coffee Farm Management 4th May – 17th May 2014Coffee Factory Management 1st June – 14th June 2014Coffee Stakeholders Seminars June 2014

The CRF’s Kenya Coffee College offers tailor made programmes and seminars for coffee farmers, staff, managers, stakeholders, foreigners and others who want to update their skills in coffee management, processing, marketing and leadership. The College’s training and hospitality facilities can also be hired for non-coffee related activities for specified duration on request.

Interested persons should apply to:The Director of Research, Coffee Research Foundation, P.O. Box 4, 00232 Ruiru, KenyaTel: +254 (020) 210 0972, +254 (0) 724 527 611, +254 (0) 0733 333 060, Fax: +254 (020) 204 4923Email: [email protected] / [email protected] , Website: crf.co.ke

Send applications and/or nominations to the address above a month before the start of the course.

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A spot of coffee?With a print calendar that stretches back to 2006, and a distribution that ranges from coffee researchers, farmers, societies, estates, inputs suppliers, extension officers, farm managers, millers, transporters, warehousemen, tasters, certifiers, marketers, traders, insurers, financiers, industry policy makers and oversight officers, The Coffee Quarterly© is the sweetest way for you to reach all the movers and shakers behind Kenya’s world renown beverage – at one spot.

To book your ad, call or email Pauline or Ian at (+254) (0) 20 250 4856, or (+254) (0)721 696 698, or [email protected]


SPECIAL FEATURE SPECIAL FEATURE

Lessons learned from the 4-year US$ 47 million coffee initiative

Transparency

Agronomy Information

BackgroundThere are over four million coffee farmers in East Africa (Kenya, Uganda, Rwanda, Burundi, Tanzania, as well as Ethiopia), and together they export US$9 billion worth of coffee every year.

While East Africa does not currently produce the volumes necessary to compete with the powerhouses of Brazil and Colombia, which together account for nearly 40% of global Arabica coffee production, the region has a distinct advantage when it comes to producing premium coffee for the specialty market. In fact, very few places in the world can match the ideal growing conditions that exist in East Africa’s highlands: a combination of the right temperatures and rainfall patterns, as well as the very specific altitudes necessary for Arabica coffee to thrive – between 1,200 and 2,000 meters above sea level.

Therefore improving coffee’s quality and yields, and reducing its operational costs, can substantially grow household incomes in a large section of East Africa’s rural economy. And there is room for growth. In Kenya for example, the average smallholder farmer produces about one third of what the average commercial estate produces, yet commercial estates are producing below their own yield potential.

TechnoServe’s coffee sector development work in Africa first began in Tanzania in 1998 and later expanded into Rwanda. In 2008, with the support of a four-year US$47million grant from the Bill & Melinda Gates Foundation, TechnoServe was able to draw on

its experience in Tanzania and Rwanda and scale its model to Ethiopia and Kenya. The aim of the Coffee Initiative was to help smallholder farmers benefit from rising global demand for specialty coffee. Its first phase had three key features:

I) Improving the business viability, governance and quality management systems of wet mills,

II) Increasing productivity through field-based agronomy training, and,

III) Optimizing the overall farm-to-market value chain.

Working hand-in-hand with farmer cooperatives, the Coffee Initiative supported farmers to install 145 new wet mills and improve 140 existing wet mills, which created over 1,500 new rural jobs and provided 195,000 farmers with access to wet mills. The Coffee Initiative also designed and launched a two-year agronomy training program called the “Coffee Farm College” in 2009. Guided by regional agronomy and training experts and the results of farmer needs assessments, the Initiative provided intensive agronomy training to 36,033 smallholder coffee farmers by the end of phase one, exceeding the original target of 20,000 farmers.

In order to reach this number of farmers, it was necessary to establish a decentralized network of 130 full-time field staff, or Farmer Trainers. Farmer Trainers were each responsible for training nine to thirteen farmer groups of approximately 30 farmers, with each group trained once a month. This was found to be the ideal number for trainers to manage as it left adequate time for visits and follow-up with individual farmers. The program had 13 modules that covered all aspects of good agricultural practice, from mulching to integrated pest management to the right techniques for applying lime required on acidic soils.

The Coffee Initiative also learned the importance of participatory, activity-based learning models. It was crucial to directly engage farmers rather than lecture them; hands-on activities, role playing and group discussions formed the basis of each month’s lesson. Additionally, since farmers typically needed to “see it to believe it”, each farmer group elected a “Focal Farmer” who provided a venue for trainings

and a 40-tree demonstration plot. This approach proved to be very effective as farmers practiced the techniques they learned at the training and quickly saw the impact of the training, the Demo plots offering “best case scenarios” of what is possible after implementation of sustainable agricultural practices.

The Coffee Initiative in KenyaThe agronomy training saw over 85% of the farmers trained adopting more than half of the good agricultural practices taught. A randomized survey of trained farmers found that yields had increased by an average of 40%. A simple yet vital step like demonstrating to farmers how to reduce the stems of the coffee tree from the 5-6 average that predated training, to the recommended two or three stems per tree saw yields rapidly rise. Some farmers saw their yields double while demonstration plots, where training was based, saw yields of over 5kg cherry per tree over consecutive years.

A soil mapping and nutritional survey for all Counties growing coffee in Kenya was also carried out. It yielded insightful data that is now being used to inform soil nutrition practices for higher yield (see next but one article).

The Coffee Initiative also developed a sustainability scorecard to help factories assess their sustainability in the areas of economic sustainability, social responsibility, occupational health and safety and environmental sustainability. In 2011, 98% of

the factories assessed for the first time with the sustainability scorecard failed this test; but one and a half years later, only 17% of these factories failed. This also proved to the Coffee Initiative that societies do care about the social and environmental sustainability of their businesses, they just need support to identify any sustainability weaknesses.

The Coffee Initiative also met some challenges. In some areas, NGO traditions of paying farmers to attend trainings and providing free transportation and meals inflated farmer expectations, triggered dependency, and in some cases hindered farmer recruitment. The Coffee Initiative did find that if the training’s benefits are clear and tangible, farmers will come; but could farmers be motivated in the future to pay for training as household incomes increase?

Key Lessons Learned from East Africa

Achieving impact at scale: challenge and opportunitiesTo achieve maximum impact, all areas of the value chain must be addressed. It is necessary to not only improve coffee processing methods and create market linkages; but also to increase production at the farm level and address issues like access to finance. Building human capacity at the local level is vital for development. In Kenya, the locally-sourced trainers who were equipped by master-trainers through training of trainers (TOTs) number about 100. As the Coffee Initiative wound down, many

“Very few places in the world can match the ideal growing conditions that exist in East Africa’s highlands: a combination of the right temperatures and rainfall patterns, as well as the very specific altitudes necessary for Arabica coffee to thrive – between 1,200 and 2,000 meters above sea level.”-Lessons Learned in the Coffee Initiative, 2008-11, TechnoServe © 2013, pg 7


“We have seen yields go from 132,000kg cherry per year to 400,000kg cherry per year – from the same trees and number of farmers. Some farms moved from 40kg of cherry per year to 1,000kg.

Quality has also improved. Now, AA and AB make about 60% of the whole cherry yield. As a factory, we have also invested in income generating activities such as planting 1,000 coffee trees at the factory, macadamia and banana trees, and trees around the fence to act as windbreakers and for environmental reasons. We pay KSH.200 per day to our casual workers, and now we are paying on time.

We also improved our relationship with farmers by having more regular meetings. We serve them tea at 10am in a big pot and each can have 2-3 cups, tea unfortunately, not coffee. We tell them, ‘what you want to discuss about coffee, discuss here; don’t take it to the market’. We are also paying farmers on time. We have also signed MOU’s with financiers like banks and SACCOs to serve our farmers financially.

One thing we have seen that has helped us and we would like to share is, we have built a watchtower about 40feet above the ground. Then 1-2 watchmen are up there with a bright light, and 2-3 watchmen patrol the factory. Now, when thieves strike, even if they catch the 2-3 on patrol, the ones up see them. Even if one is sleeping, the other is awake, and raises the alarm before the thieves can climb the tower. Then everyone responds and thieves run away. This has really helped us reduce theft of factory coffee.

Now, our society is getting new applicants. New farmers want to join us. We want to see all farmers trained.”

To find out how your cooperative society or county can engage with this training program, contact:

Post: TechnoServe Inc., Sclater’s House, Parklands Road, P.O. Box 14821 – 00800, Westlands, NairobiTel: +254 (0)20 374 3389/92, email: [email protected],website: www.technoserve.org


“Don’t sit and wait for partnerships to come, go out and look for them.”– Wycliffe Murywai, SMS Ltd.

“We need quality and volumes because giants like Brazil and Colombia are modernizing, and coffee is competitive. So if we don’t also modernize and improve our quality and volumes, we will not survive.” – Marcos Brandalise, Brazafric Enterprises Ltd.

of them have now found jobs in the coffee private sector. One society has hired some to continue training its farmers.

The project’s scale allowed the Coffee Initiative to take a long-term view and make strategic investments early that laid the foundation for later effectiveness. The scale also attracted private sector investment, which helped to build sustainability and ensure that market demand drove the work. Scale also permitted the Coffee Initiative to initiate dialogue with government stakeholders and help inform national policy.

Strengthening cooperative governance, transparency and accountabilityFarmers’ informed participation is essential for building cooperative accountability and transparency. Successful cooperatives elect leaders who are knowledgeable, committed and have positive ethical values. Transparency and accountability can be encouraged by building easy-to-use tools, systems and processes.

Increasing the participation of women farmersIt is essential to mainstream gender perspectives early and to sensitize community leaders as well as male farmers on the importance of women’s participation. For example, setting meeting times and venues that made it easier for women to attend saw women attendance in some areas rise from as low as 1% to as high as 35%.

One should not also view the household as a single monolithic unit but instead understand, implement and measure impact on the individuals within the household. There is a need and an opportunity to introduce gender awareness among cooperatives. The gender composition of agricultural extension staff should also reflect the gender make-up of those they seek to reach.

Building human capacity for industry developmentTo get effective farmer trainers, recruit locally. Go beyond interviews. Observe candidates’ interactions with people and situations in trainings so that you hire the top performers. Invest in high-quality training and professional development to support the project as well as to supply the industry with skilled talent.

Testimonials

Bernard Mwaniki,Kibugu Farmers Cooperative Society, Embu

“Before the project came, we used to farm coffee using what I can call orthodox methods.

Coffee trees had up to six stems, which resulted in wastage of spray and low production. Some stems were as old as 15 years on some farms. They were prone to disease. We used to apply fertilizer by jembe (hoe) which harmed he roots of the coffee tree, and wasted fertilizer. When spraying for CBD, we were not targeting the berry, we were targeting leaves. We had poor and sometimes no record keeping at all.

To be honest, it took me three months to sign the MOU with TechnoServe for the training to start. You see, we are scared of people who bring political agitation that causes farmers to stop working. Not only that, the trainers they brought were very young. We underrated them. ‘Do these boys (we were calling them boys) know anything’, we said to ourselves. But they surprised us.

TechnoServe linked 36 farmer groups with 3-4 trainers, and at first we doubted. It was important that they showed us by way of the small demo plots. The training revolved around the four areas: pruning and rejuvenation, fertilizer application and mulching, record keeping, and the safe use of chemicals and disposal of containers. They also taught us how to make compost, the importance of dolomitic lime, how to have three stems per coffee tree, and how to record expenses including hidden ones like labour.

Before the training, our society’s yield had dropped and was in the 600,000kg to 900,000kg of cherry per year. This coming year, we are expecting 1.8million kg. We have so far collected about 10% of the crop and it is 175,000kg this far. We have realized it is better to capitalize on yield and quality per tree.”

Paul Chumba,Kapkulumben Farmers Cooperative Society, Koru

“We started in year 2000 with 31 farmers.

At first we used to wash the coffee in the river then we realized that we would be closed for polluting. Polluted water can give you diseases like kipindupindu (Cholera). So we bought a pulping machine after TechnoServe linked us to SMEP and we borrowed KSH.1.5million. It was able to pulp 1,500kg per hour.

When we started, we used to do 116,000kg per year. Now, we are at 643,000kg per year. Cherry to parchment ratio when we begun was 7:1, now it is 5:1. We have bought two Eco-pulper machines for pulping and now we have three factories. At first it was hard because I am young, and in my community people don’t believe a young person can be a leader. But when I approach them now, it is different.”

E. Karingu Wanyeki,Gathaithi Farmers Cooperative Society, Nyeri


Within one year of adopting all best practices trained, Ephantus harvested 1,800kg of cherry. This was more than double his previous production. Two years down the line, Ephantus’ farm has a heavy crop with a conservative estimate of 3,000kg. This is from the same farm which produced 400kg of cherry three years earlier.

Soon many farmers were visiting Ephantus’ farm to see for themselves. Some remained skeptical about the value of pruning and rejuvenation, but others learned from what they saw.

Ebenezer Micheni is a farmer from Muiru Farmers Cooperative Society in Chuka, Tharaka Nithi County, another cooperative in the Coffee Farm College. He was amongst a group of farmers from the cooperative who visited Ephantus Ndwiga in Kithungururu in August 2013, through an exchange visit organized by TechnoServe. This visit was an eye opener for the visiting farmers, a number of whom had not adopted pruning and rejuvenation in spite of having attended training.

When Ebenezer returned home, he decided to put into practice what he had seen and been trained on. He stumped half of his farm of 360 trees and now advises every farmer whose farm is due for rejuvenation to rejuvenate. He also advises farmers to keep a maximum of 2 or 3 main stems, on all coffee trees in order to optimize their production. This is quite a change for Ebenezer who has maintained an average of 8-10 stems per tree in the 35 years he has been farming coffee.

angle so that the rain water runs off away from the trunk. A pruning saw is used to give a clean cut and reduce the chance of infection.

In continuous rejuvenation, all old main stems are removed except for one which maintains production. Any branches that block the light from reaching the stump are removed in order to initiate growth of strong suckers. Once the suckers have developed and are about 20–30 cm high, the best three are selected to become the new main stems and the rest are removed.

After 1 year when the crop has been harvested, the remaining old main stem is removed leaving three young main stems in full production.

Pruning and rejuvenation ensures that the entire coffee field is kept young and makes subsequent activities like fertilizer application more efficient and cost effective. The activity is usually done in the months of January and February when harvest is complete in most coffee growing areas.

During the Coffee Farm College training, farmers’ adoption of pruning and rejuvenation was variable. Some farmers reduced the number of main stems to 2 or 3, other farmers also stumped a small section of their farms, and some farmers did nothing at all.

But for Ephantus Ndwiga, a member of Kithungururu Farmers Cooperative Society in Embu County, it was time to make a big decision on his farm. He stumped 150 trees accounting for half of his farm, and reduced the main stems on the remaining half of his coffee to only 2 or 3, which he then stumped the following year. This is the first time that Ephantus had rejuvenated since he planted his coffee in 1989.


How pruning and rejuvenation changed a coffee farmer’s fortunes By Dominic Ogut, TechnoServe Kenya

Ephantus farm before rejuvenation

Young tree on Ephantus farm in the second year after rejuvenation.

One of the trees at Ebenezer’s farm with multiple stems One of the trees at Ebenezer’s farm pruned to two stems

In November 2011, 593 farmers from Kithungururu Farmers Cooperative Society in Embu County signed up for the 2-year TechnoServe Coffee Farm College Training.

The purpose of the training was to enable farmers to increase both their coffee yields and quality through adoption of Good Agricultural Practices (GAP) such as pruning and rejuvenation, nutrition, composting, and integrated pest management.

The training program began with lessons on pruning and rejuvenation, a key practice required to increase yields. Too often farmers in Kenya grow their coffee on multiple stems of various ages. Good pruning and rejuvenation recommends the number of main stems per tree be kept to 2 or 3, and those main stems above eight years be stumped to grow new and vigorous main stems that will be more productive

Pruning is the process of removing unwanted branches in order to concentrate the plants energy to productive branches, therefore optimizing yield, quality and the overall management of the tree. Pruning brings fresh vigor to the trees, maintains suitable crop leaf ratio and also assists in insect pest and disease management. It also saves on chemical use during spraying, should this be required, and opens up the tree to light and air circulation for better flowering and fruiting.

Rejuvenation is the removal of old stems to grow completely new vigorous main stems that produce more flowers and coffee. When rejuvenation is done frequently, pruning becomes very simple and CBD infections are reduced. Most coffee trees in smallholder farms in Kenya have not been rejuvenated properly. They have many stems of mixed ages. This reduces light penetration and leads to weak growth, poor flowering and low production; whilst also providing ideal conditions for pests and diseases.

Rejuvenation is done in two ways, either by stumping or through continuous rejuvenation. Stumping involves removal of all main stems at once. New suckers develop from the stump and once they are about 20–30 cm high, the best three are selected to become the main stems while the rest are removed. The stems are cut 25–30 cm from the ground at 45°


SPECIAL FEATURE

Coffee prices have, despite a recent rally, been rather low for a while.

The question however is: is this price depression temporary, or is it a sign of a seemingly oversupplied market meaning that lower prices may be our new normal for the short-to medium term? And if it is true that it may take some years before the good 2009-11 prices return, what should the coffee industry do to survive now, and be ready for prosperity when the market cycle returns back up in the future?

World coffee output statusAccording to ABN AMRO, big crops that the market will have to absorb are due from Brazil and Vietnam - where an increase of at least 10 per cent is expected. And that although the ICO says that over 20 per cent of the crop in Central America has been lost to the leaf rust outbreak, and over half infected, over supply still dominates the market. 1 According to ICO, total global consumption in 2012 was 142million bags while production - despite lower yields due to e.g. leaf rust - was estimated at 145.2million bags.2

On its part, Colombia is already recovering from the leaf rust outbreak of Central America and may hit its highest yield since 2007. Colombia’s yield in the first 10 months of 2013 of 8.6million bags was higher than its total yield of 2012 of 7.7million bags. According to the Colombia Coffee Growers Federation, by 2013 half of the country’s yield will comprise specialty coffee, a major increase from 19 per cent in 2006.3 What does this suggest for the Kenyan, and indeed the East African, coffee industry?

Several things: it may suggest that for coffee farmers in East Africa to survive, let alone thrive, in the short to medium term, they will have to both increase their volumes to thresholds that make economic sense and increase cherry quality. Why? Because, in both the Robusta and Arabica / specialty coffee markets, the giants are increasing quality and quantity of their coffee. Coffee is becoming a numbers game, a game where if a country is not producing an optimal yield

1 http://www.siemex.biz/coffee/Display.asp?iArticleId=13612 https://globalcoffeereview.com/news/article/coffee-prices-hit-30-month-low-ico3 https://globalcoffeereview.com/news/article/colombian-production-to-october-highest-since-2007

at a minimum quality, they are in danger of being pushed from the market by the giants.

For farmers in this region, improving yields and quality is not an issue that can wait for “Vision 2030”. It is one that must be addressed today. It is only by increasing our yields and quality that we shall be able to safeguard our survival as an industry today, and be ready for our prosperity when it comes tomorrow.

And to increase yields and quality, there are a number of key practices that a farmer should focus on: firstly rejuvenate and prune your coffee so you have young and productive trees. Secondly look after the health of your soils, know what your soils contain and what your coffee needs and fertilize accordingly. Thirdly apply other good agricultural practices such as mulching and integrated pest management – and if you can, take part in one of the agronomy training programs available.

Kenyan Coffee soils have been neglected for many years, effectively nutrient “mining” has been taking place. Each successive coffee crop has been removing nutrients from the soil, and these nutrients are not being replaced through a balanced fertilizer regime. This has resulted in the soil in many coffee farms becoming degraded and short of key nutrients, so essential for high coffee production and quality. Coffee needs a balanced nutritional program in the same way humans need a balanced diet. If we eat ugali every day without adding sukuma wiki or meat, we become sick and develop diseases like Kwashiakor. But if we eat a balanced diet, we become healthy and strong. Coffee is the same. If you do not feed your coffee a balanced diet, it will suffer. Giving your coffee a balanced diet will increase its yields and quality and also reduce its susceptibility to diseases such as Coffee Leaf Rust.

Any nutritional program should be determined from the nutritional needs of the coffee plant, the yield expectation, and the availability of nutrients in the soil. The best way to determine the nutrient status of the soil is to take a soil sample and send to an accredited laboratory for recommendations. Modern fertilizer chemistry has made it possible to

Soil Nutrition - a necessity that cannot wait any longer


SPECIAL FEATURESPECIAL FEATURE

develop crop specific fertilizers with variable ratios of Nitrogen: Phosphorus: Potassium (NPK) plus micronutrients such as Sulphur, Zinc and Boron . These fertilizers are much better able to meet the needs of the coffee plant than traditional products such as Urea and CAN, which supply limited nutrients.

Kenya soil nutrition statusIn 2010, the TechnoServe Coffee Initiative funded by the Bill and Melinda Gates Foundation, in collaboration with the Coffee Research Foundation contracted Crop Nutrition Services to carry out a Kenyan coffee soil and leaf survey.

The aim of this survey was to establish basic fertilizer recommendations for coffee farmers in all coffee districts of Kenya. The major findings of the survey were as follows:

1. Most soils found East of the Rift Valley are very acidic. Acidic soils lock-up nutrients and prevent them from being available to the coffee plant.

2. Most soils were low in Sulphur, essential for the utilization of Nitrogen. Note that excess nitrogen can increase pest and disease attacks.

3. Many soils were low in Phosphorus, important for flowering and coffee quality.

4. All leaf samples showed plants were deficient in the micronutrients Boron and Zinc, which are important for fruit set, flowering and growth of new shoots.

5. Soil organic matter, critical in storing moisture, nutrients and as a food source for microbial activity within soils, was generally good in most areas.

From these findings, Crop Nutrition Services developed a nutrition program for each coffee district as a guideline to farmers who don’t have the opportunity to have their own soils tested. They were as follows:

• Lime: To address soil acidity farms in the East of the Rift Valley should implement a 6 year liming program, alternating between Agricultural lime and Dolomitic lime to maintain a balance of Calcium and

Magnesium. Specific rates vary according to District. Lime is a naturally occurring material readily available from a number of sources in Kenya and isn’t an expensive product.

• Organic matter: To improve soil health; the moisture and nutritional holding properties of the soil and microbial activity, farmers should produce compost from organic matter such as manure, coffee pulp and crop residues, used together with a soil mulching and erosion control program

• NPK + S: To address the nutritional requirements of the plant and low Sulphur levels a coffee specific NPK fertilizer should be used, all Districts need at least 1 application of NPK 22:6:12 + S. Some districts with lower potassium require 1 application of NPK 17:17:17 a year. The rates of NPK depend on yield expectation and use of compost, starting around 100g/tree per application.

• Zinc and Boron Foliar feed: To address plant deficiencies of zinc and boron specific foliar feeds with high levels of these micronutrients are required. General NPK foliar feeds do not supply high enough levels of these micronutrients, so farmers should use products such as Zinc Oxide and Solubor.

TechnoServe has been training farmers how to use these inputs correctly, applying in the right place and at the correct rate. Farmers apply the products during monthly hands on training sessions and soon see the

impact of the program on the coffee trees used for training. Adoption of the new products has been high with participating cooperative societies purchasing in bulk and supplying to farmers.

Farmers using this nutritional program, together with other good agricultural practices, have after a couple of years have seen an average yield increase of over 76%4 compared to control farmers living in the same area but not in the 2 year training program.

Wanjohi Ngaire, a member of the Karithathi Cooperative, Kabingara Factory, has been using the new nutrition program for the last couple of years; he is seeing consistently high yields on his trees and expecting more than 10kg of cherry per tree this year. For Wanjohi the future of coffee looks bright.

In conclusion, for Kenyan farmers to compete in the world market it all starts with building soil health, good nutrition, and carrying out the right crop husbandry.

By Carole Hemmings, Regional Agronomist East Africa, TechnoServe Inc., and Ian Gatere, Project Coordinator, IEC Strategy Ltd.

4 *TechnoServe data from 2012/13 harvest season 601 randomly selected farmers from the trained and control group farmers, trained farmers completed training in 2012


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Get total yields with Tomek from Topserve East Africa Ltd!

All foliar feeds listed here have been tested and approved by the Kenya Bureau of Standards and the Government Chemist. Topserve East Africa Limited is a member of the Agricultural Association of Kenya (AAK), and has been manufacturing and distributing vital farm inputs in East Africa for over 10 years.

What is Tomek?Tomek is a balanced foliar feed containing major macro and micro nutrients essential for plant growth and high yields, or as we call it, a highly enriched plant soup.

We call it Tomek because it contains all the nutrients that the crop needs, Nitrogen, Phosphorous and Potassium

or NPK in a 24-24-18 ratio respectively. Tomek also contains amino acids and bio stimulants essential for plant growth.

What support does Tomek give your crop?Because it is easily absorbed by the plant, when you apply Tomek you virtually see an immediate boost.

On which crops should Tomek be applied?Tomek has a wide range of application because its nutrients are needed by all plants. It can be applied in coffee, macadamia, wheat, maize, beans, tomato, vegetable crops and napier grass.

Maize and napier grass are often forgotten when it comes to feeding leading to low yields. But if you apply Tomek you shall get good maize yield, and heavy volume of napier grass that you can harvest every two or so months. A small shamba with maize and napier grass fed with Tomek shall give you yields that boost your home consumption and dairy animals. Every time you remove a crop from the ground, no matter which, you are removing nutrients from the ground. If you want to keep getting good harvests, you must return those nutrients. We have to develop a culture of feeding our crops including crops like maize and napier grass.

BorotBorot contains Boron which is the most often deficient micro-nutrient in coffee cultivation. Boron is necessary for root growth and water uptake, growth of internodes, fruit setting and fruit size, drought and disease resistance. Borot is best applied after harvest and during the blooming stages as its micro-nutrients enable well-formed flowers which lead to productive fruiting. Borot halts flower abortion.

T-CopT-Cop is a nutrient copper. Many coffee farmers are aware of the use of copper as a fungicide; however, not many are aware that for healthy crop development, coffee also needs copper as a nutrient. T-Cop should in fact be applied as regularly as every month or so on the crop.

T-ZinkT-Zink enables branches to tip, giving you good branch formation. T-Zink has 70% of the micro-nutrient zinc. T-Zink is a liquid formulation which gives it a quicker and fuller absorption by the crop, compared for example to zinc oxide. This makes T-Zink easy to apply and readily available to your crop. T-Zink should be applied twice a year just before each of the two flowering stages when berries are growing.

Mr. Mbiu Kimani, Director, Topserve East Africa Ltd

How should Tomek be applied?Tomek is a foliar feed, so it should be applied on the leaves which make up the foliage. Because Tomek is a highly enriched plant soup, you don’t need to apply a high amount. The recommended rate is 1litre of Tomek per hectare, or 20-40ml of Tomek per 20litres of water. Remember to calibrate your knapsack properly before spraying. And to also check your nozzles regularly, and change them as recommended.

When should Tomek be applied?As a farmer you don’t have to worry about what stage you should apply Tomek because your crop needs

its three main ingredients all year round. Tomek has Nitrogen (N) which is required when the crop in the phase of rapid growth so as to boost vegetative growth; Tomek has Phosphorous (P) which is required for root development; and Tomek has Potassium (K) which helps the plant develop proper fruits.

In what quantities is Tomek available?Tomek is available in quantities ranging from 250ml, to 500ml, 1litre, 5litres and 10litres. It is also widely available at agrovets and stockists across East Africa, and is available at cost-effective prices.

ADVERTORIAL


The largest tea export auction in the world is a regional tea auction based in Mombasa, Kenya.

This is the East African Tea Trade Association’s (EATTA) Tea Auction, more widely known as the Mombasa Tea Auction. This auction sells about 70% of Kenya’s tea production as well as the regional teas produced in Uganda, Tanzania, Rwanda, Burundi, and Malawi. In 2013, Kenya’s tea production alone eclipsed 420,000 metric tons (MT).

What is not widely known in this much-told story of teas’ success in Kenya is that it was coffee export companies which handled the first tea auction purchases and exports at the Mombasa Tea Auction.

When tea held its first auction in 1956 it was to its “bigger brother”, coffee, which had been running an auction since 1935, that tea turned. Through that support and an approach to its market development

that put the greater common good above short-term interests, the Mombasa Tea Auction steadily grew and eventually surpassed traditionally larger global tea auctions in India and London to become the world’s no.1 tea export auction. Meanwhile, the Nairobi Coffee Exchange continued to serve just Kenya.

What the regional tea auction clearly shows is the great opportunity that coffee is losing, an opportunity that has been sitting there literally for decades just waiting to be seized. An opportunity neglected that arguably has cost the coffee value chain income in missed earnings, from the farm all the way to export.

In 2012/13, KTDA earned KSH.69billion from tea sales sold primarily through the Mombasa Tea Auction, out of which a total of KSH.51.3billion was paid out to its over 530,000 tea farmers1. This sum is over four times higher than what coffee managed to pay its 600,000 or so farmers in the 2012/13 year, which was KSH.12.4billion2. Yet pound-for-pound the value of tea cannot begin to compete with that of coffee.

An opportunity that can still be seized is not all lost. But as the Mombasa Tea Auction also shows in the way in which it supplanted bigger auctions elsewhere in the world, the window of opportunity does not stay open forever. If you do not seize the opportunity in its time; it passes by and is forever lost to you.

For as President Uhuru Kenyatta recently said in reference to the building of the standard gauge railway, “There comes an hour when the noise must stop, and the work must begin. We are at that hour.”3

Why a regional coffee auctionProbably the single largest benefit of a regional coffee auction is that it concentrates demand.

1 Small Scale Tea Farmers Earn SH.69 Billion in Revenue (http://www.ktdateas.com/index.php/press-releases/390-small-scale-tea-farmers-earn-sh69-billion-in-revenue) 2 “Farmers to lose billions following governors disruption of coffee marketing”, Release by the Commercial Coffee Millers and Marketing Agents Association, Dated 21st January 2012, pg 13 “Grand railway project to power ahead, says Uhuru”, by Lucas Barasa, Daily Nation, Tuesday January 28th, 2014.

New buyers would be attracted to it as a central hub that gives access to coffees from the whole region, much in the same way the world’s biggest tea buyers are drawn to the regional tea auction in Mombasa. For as Daniel Mbithi, CEO of the Nairobi Coffee Exchange said in a recent interview, “An international buyer I met once told me how difficult budgeting for Kenya coffee is because its quantities are small and they vary.” This inconsistency of supply which Mbithi refers to increases purchase costs for big buyers.

In a regional coffee auction however, there would be an increase of volumes on offer. An increase that would be enhanced by East Africa’s unique harvesting calendar that spreads throughout the year. Larger more regular volumes would reduce seasonality and variability, which is very attractive to global buyers because these buyers are keen to secure steady supplies for roasters. Thus a regional coffee auction would reduce purchase costs for big buyers, which would in turn enable them to offer better prices. A regional auction would also enable the collation of mixed containers of various origins to serve micro

coffee roasters in consuming nations, which includes emerging nations such as Egypt and South Africa.

“What Kenya, what East Africa needs to do is make itself the best source of high quality washed coffee in the world. The good thing with East Africa is that as a region, it harvests coffee all year round. Buyers can get supply all year round. Central America all harvest over the same time period.”4

- Chris Jordan, director, Coffee Operations,Dormans Coffee, and 14-year Starbucks staff veteran.

Part of the challenge would be to agree within East Africa if, how and where a regional auction would be best placed. Tanzania has its auction, Ethiopia has the Ethiopia Commodity Exchange (ECX), and Uganda and Burundi have farm gate sales. There is definitely need to harmonize policy.

Yet, truth is, if East Africa was to turn one of its’ member auctions, say purely for discussion purposes the Nairobi Coffee Exchange (NCE), into a regional coffee auction selling for example coffees from Uganda, Rwanda, Burundi, Eastern DRC and Kenya, the NCE would become a key point on the global coffee map. Farmers and exporters in East Africa would also reap the benefit of cheaper access to more buyers and ultimately a higher price.

Transparency and traceabilityAn auction is a highly transparent system. It enables price discovery in a transparent way. It provides traceability because it enables buyers to track where each lot of coffee has come from. The consumer of today increasingly wants to know where the consumable they buy comes from, how it was grown and prepared. An auction system provides this, further enabling it to win and secure better paying markets.

With an auction system, it is also easier to tell what proportion of the final market price a commodity earned at the auction ends up with the farmer. We in Kenya coffee are all aware of the government policy introduced a few years back that sought to ensure 80% of the final market price a commodity earned at the auction ended up with the farmer, and only 20% went to overheads that for example societies incur in the process of collating, semi-processing and storing coffee on behalf of their farmers.

4 “Conversations with Chris”, The Coffee Quarterly, Issue No.18, page 26.

FEATURE FEATURE

The case for a regional coffee auction By Jay C. Sondhi

The Nairobi Coffee Exchange. (Source, Cetco Ltd.)


Because of the transparent nature of the auction system, one can clearly tell how much money actually ends with the farmer. In the tea industry for example, the amount of money the KTDA is paid for teas it sells on behalf of its member tea farmers via the regional tea auction in Mombasa is publicly known. Likewise the proportion of this money that is transferred to farmers via the 66 KTDA managed factories, versus the amount retained for admin, is also publicly known. For example, the percentage of income out of the total earned that was transferred to farmers for their teas sold by the KTDA via the Mombasa Tea Auction in year 2012/13 was 74.35%5. This is public knowledge that can be investigated and audited.

An auction may even be preferable to a commodity exchange because though the latter system is said to be more efficient, it is also starting to face some criticism. As a recent report carried in the Financial Times in its “This is Africa” series developed in partnership with the Rockefeller Foundation and the Skoll World Forum, stated, “careful analysis shows that even the ECX’s (Ethiopia Commodity Exchange’s) success may have been more tempered than its advocates suggest… data from the ICO contest claims that farmers are receiving a higher proportion of the final price of their commodity in the market. In fact, farmers took home 51.6% of the export price of their product for the year ended September 2012,

5 http://www.ktdateas.com/index.php/press-releases/390-small-scale-tea-farmers-earn-sh69-billion-in-revenue

down from 57.1% in the year ended September 2007, before the exchange was established”6.

Also, commodity exchanges do not provide the sort of differentiation and traceability of coffees offered that auctions provide; factors which as we saw earlier are of growing concern to today’s consumer. For instance, a Financial Times report states how, “In London, the high-end coffee company Monmouth Coffee last year flagged up a concern with its Ethiopian offering: “As this coffee was bought and sold through the ECX, its traceability is limited… and full credit for the growing and preparation of the coffee cannot be given,” it said in a promotional

flyer. “We hope that at some stage in the future the Ethiopian coffee board will reconsider its current strategy and permit all coffees in Ethiopia to be traded directly.”

Infrastructure and policyLogistics’ service providers and shipping lines also increase their efficiency and reduce their costs when they are able to concentrate their services and resources around one major hub. This enables them to provide better service at cheaper cost, which again results in higher returns for those they are serving.

Now it’s important to note that as Eleanor Whitehead, a reporter with the “This is Africa” series of the Financial Times, points out, regional structured

6 http://www.forbes.com/sites/skollworldforum/2013/08/15/africas-agriculture-commodity-exchanges-take-root/

FEATURE

The Nairobi Coffee Exchange sample room. (Source, IEC Strategy Ltd.)


Indeed, it’s not entirely inconceivable that at some point in the future, the top coffee producing country in our region could join the EAC. The late Meles Zenawi, former prime minister of Ethiopia once said to a Kenyan delegation that visited his country in early 2011, “Our joining the East African Community is long overdue.”9 If this happens, that would be the game changer for the region. And I’m not talking about LAPSSET here (see Fact Box 1).

“We need to move our teamwork from just political interests and regional security to include improving inter-country trade to benefit the over 130 million people living in both countries.”

- Ethiopian Prime Minister Hailemariam Dessalegn, after the signing of the Special Status Agreement between Ethiopia and Kenya to open investment and improve trade between the two countries10

Now there is no doubt that there is still a lot of work that needs to be done on harmonization of policies before we can say East Africa is a fully functional trading block, with little to no non-tariff barriers. As much as the EAC is widely recognized as Africa’s best-integrated region, this acknowledgement comes with the caveat that this ranking is within a continent that is quite economically fragmented11.

And as Mrs. Isabella Nkonge, Ag. Managing Director, Coffee Board of Kenya said in a recent interview, a regional coffee auction would also require astute political and economic diplomacy as it may need to be negotiated as an “East African protocol” in the same way the Customs Union and Common Market were. Nevertheless, on a rough scorecard gleaned from the earlier quote by Eleanor Whitehead of the Financial Times, emerging trends in East Africa seem to suggest that the hour has come for our good national auctions to give way to a great regional one.

In conclusionThe founder of the Ethiopian Commodities Exchange, Dr. Eleni Gabre-Madhin says that as Malaysia’s exchange sets the reference price for rubber, India’s commercial-dialogue-signing- 9 http://www.nation.co.ke/oped/Opinion/Why-the-region-will-miss-Meles-Zenawis-brand-of-leadership/-/440808/1487200/-/defsk5z/-/index.html10 http://www.nation.co.ke/lifestyle/smartcompany/Kenya-plans-road-show-to-Ethiopia-capital/-/1226/1665184/-/mu7meg/-/index.html 11 http://www.thisisafricaonline.com/News/Lagarde-warns-on-east-Africa-single-currency

for silver and China’s Dalian exchange for soybeans, reference prices for some commodities should come from Africa rather than New York or London12. “If we get it right and set up exchanges across the continent we can link them up to create a solid, critical world reference price, especially for commodities where there are common interests like cotton or cocoa in west Africa, or coffee in east Africa,” the Nairobi-based Dr. Gabre-Madhin asserts13.

A well-run regional coffee auction would create a synergy in the coffee sector where regional coffee suppliers and regional coffee buyers would benefit mutually. This has been well-proven by the shining example of the Mombasa Tea Auction.

But positive opportunities do not stand still forever. If Kenya does not lead East Africa into developing a regional coffee auction; other regions such as Central America, Brazil or Vietnam which are expanding quantity and quality of output shall become the reference price point for the world’s second most traded commodity pulling the international market with them.

Yet, if East Africa builds on its advantages, including the natural advantage of being the origin of some of the world’s finest washed Arabica coffee; with focused coordinated effort, our regional coffee auction can become the number one origin of fine coffee in the world: in quality, reliability and returns – for us all.

Jay C. Sondhi is the Managing Director of Sondhi Trading Limited (STL) and Mbaraki Port Warehouses (K) Ltd. A graduate of the University of Hartford, Connecticut; Jay has six years experience in commodity trading in New York where he was a registered Coffee Futures Broker at the National Futures Association of America. At the 9th East Africa Fine Coffees Association (EAFCA) Conference and Exhibition held in Addis Ababa, Ethiopia in February 2012, Jay was the key speaker at the Annual Policy Brunch time slot where he discussed how consolidating the coffee auctions in Addis Ababa, Nairobi and Dar es Salaam among other member countries would stir better demand from buyers – to the benefit of all in coffee in East Africa. The speech was well received and there was a lot of support for regional trade among representatives from the region as well as from international companies.

12 Eleni bets future beyond Ethiopian commodities exchange | East & Horn Africa|www.theafricareport.com

13 http://www.forbes.com/sites/skollworldforum/2013/08/15/africas-agriculture-commodity-exchanges-take-root/2/

FEATURE

trade is a “political as well as commercial endeavour, and poor infrastructure and political bickering are likely (to) hamper imminent efforts.” In other words, the development of a regional coffee auction requires enablers like the right regional infrastructure, the alignment of regional agricultural and trade policies, and last but by no means least, sheer political will.

So key infrastructure investments taking place in Kenya and in the region such as, the recent opening of a new berth at the Mombasa Port and the construction of the Second Mombasa Container Terminal,

the construction of the Standard Gauge Railway from Mombasa to Nairobi which includes improvement and expansion of the Nairobi inland container depot, the planned construction of the Dongo Kundu by-pass, the planned construction of the Mombasa-Nakuru dual carriageway, the ongoing LAPSSET project, the ongoing increase in electricity generation, the construction of the Greenfield Terminal at the Jomo Kenyatta International Airport, would feed and facilitate the crowding-in of buyers and service providers at the regional coffee auction.

It’s also vital to note how East Africa is starting to tag team. In 1999, the Treaty for Establishment of the East African Community (EAC) was signed by Kenya, Uganda, Tanzania, Burundi and Rwanda. It aims at “widening and deepening co-operation among the Partner States in, among others, political, economic and social fields for their mutual benefit”7. Likewise, the East African Customs Union was signed in 2004 and a Common Market agreement was signed in 2010. The world is starting to notice. Current trade discussions between the European Union and African, Caribbean and Pacific group of states on the Economic Partnership Agreements (EPAs) are in Kenya’s case, being negotiated from a joint EAC basis as opposed to a bilateral basis. And in July 2012, the USA signed a Trade and Investment Partnership with the East African Community, which at the time was the first Commercial Dialogue the USA established in Africa as well as the only one the USA had pursued on a regional, as opposed to bilateral, basis8.

7 http://www.au.int/en/recs/eac 8 http://www.commerce.gov/news/acting-secretary-speeches/2012/11/30/remarks-eac-summit-and-eac-us-

FEATURE

Fact Box 1

According to the widely respected Coffee Review website, 11 of the 30 best coffees in the world in 2013, and about 50 of the 84 coffees with an overall ranking of 94 and above, were sourced from East Africa.

Six of the top 30 coffees of 2013 were from Ethiopia, four from Kenya and one from Rwanda. Ethiopia had the single highest ranking coffee, and Rwanda the second highest, in the world. Kenya’s highest ranked coffee came in at no.5, Kirinyaga Karimukui Peaberry; with Kikai FCS in Bungoma a worthy no.13. So, according to the respected website, East Africa originated about 37% of the 30 best coffees in 2013.1

The website goes on to detail how from assessments carried out between Dec 2012 and Jan 2014, which included a blind test, 84 coffees or so had an overall ranking of 94 and above. From these 84 coffees, about 31 were from Ethiopia, 16 from Kenya, two Rwanda and one Burundi. Coffee Review holds it that about 50 out of 84, or approximately 60%, of the top ranked coffees of 2013 were from East Africa.2

1 http://blog.coffeereview.com/industry-issues-and-news/best-coffees-of-2013/2 http://www.coffeereview.com/allreviews.cfm?search=1

Coffee liquoring at the Nairobi Coffee Exchange sample room. (Source, Cetco Ltd.)


In order to sustain and enlarge the market for Kenya Coffee, various actions have been proposed or undertaken in the past targeting both local and international markets.

Some of these strategies go all the way to the British Colonial Government which used a variety of ways to promote consumption of Kenya Coffee in the United Kingdom and in Kenya itself. Kenya, formally the Colony and Protectorate of Kenya, was part of the British Empire. The colony was established when the former East Africa Protectorate was transformed into a British crown colony in 1920.

Coffee was first planted in Kenya at Bura in Taita Hills in 1893 and thereafter, grown at Kibwezi, under irrigation in 1900, and at Kikuyu near Nairobi in 1904. Commercial coffee growing in the Colony of Kenya however, started in 1908.

The Snowball CampaignThe Snowball Campaign was initiated in 1936 to promote Kenya coffee in the United Kingdom. The campaign was based on the idea that planters and

others interested in the welfare of the coffee industry in the Colony of Kenya should send in a list of their friends in the British Isles to whom a Kenya coffee sample could be sent. Suggestion for this form of publicity was put forward by Mr. Joelson (Editor of East Africa newspaper) and “once funds were available”, the idea was acted on by the Coffee Board of Kenya (CBK).

CBK was also charged with providing distinctive display materials on the coffee that grocery owners could use to display in the windows of their shops. The displays marketed not only Kenya coffee but the rich diversity of the country (Plate 1).

Kenya Coffee televised in LondonFrom 7th to 24th October 1936, the National Milk Publicity and Exhibition took place at the Alexandra Palace in North London. The National Milk Publicity Council permitted the Coffee Board of Kenya to use a generous proportion of available counter space for serving of Kenya Coffee, and to display materials advertising the coffee (Plate 2). The exhibition attracted 233,397 people. Fifteen hundred (1,500)

cups of pure Kenya coffee were sold at the Royal show and a large number of Coffee Board booklets on Kenya Coffee and how to brew it were distributed. Alexandra Palace was the headquarters of the British Broadcasting Corporation (BBC) television section. It aired television broadcasts on the various stands. The National Milk Publicity Council milk bar showing the serving of Kenya Coffee was aired on the programme, and was the first of its kind.

Coffee brand for native consumption Natives were allowed to grow Arabica coffee in the Colony of Kenya in 1936. However, coffee was permitted to be grown only in two regions, Meru and South Kavirondo districts (now Kisii) to a maximum of 100 acres each. Being of the opinion that a large and hitherto untouched field of coffee consumption existed among the natives of Kenya colony, experiments were started in 1937 in order to come up with a packaged coffee brand suitable for native consumption.

With the cooperation of local roasting firms and a local trader, arrangements were made accordingly for the supply and distribution of such coffee in 0.4.oz cellophane packets with a Swahili slogan thereon. However, consistent provision of the coffee proved difficult due to strikes in France where the cellophane paper for these packets was obtained.

Competitions to describe Kenya Coffee Prize essay competitions describing Kenya Coffee were organized by the Board in 1938. The competitors were required to write an essay on coffee under the

main headings; characteristics, preparation for sale, salesmanship, display and publicity.

The Board started this competition to stimulate interest in Kenya coffee and with an aim of making it an annual event. In addition to cash awards, beautifully designed certificates were awarded. The competition was classified as Class I and Class II. Class I was open to all, while Class II was restricted to assistants and apprentices not exceeding 22 years of age.

The prizes and winners of the Class I category were:

1st prize; 15 pounds (Cash) and a certificate: William J. Cox Esq. MGI of Swansea.

2nd prize; 10 pounds (Cash) and a certificate: J.E Yarnall Esq. of Yarnall bros Ltd Leicester.

3rd prize; 5 pounds (Cash) and a certificate: J. E Riyden Esq. of Warens stores Stevenage.

The prizes and winners of Class II category were: 1st prize; 10 pounds and a certificate: Albert Edward Eastwood Esq. of Huddersfield Ind Society Ltd Huddersfield.

2nd prize; 5 pounds and a certificate: J.C Lochhead Esq. of Huddersfield.

3rd prize; 2pounds and10 cents and a certificate: Ronald J. Davis Esq. AGI of United Countries Stores.

FEATURE FEATURE

Promoting Kenya Coffee: A walk down memory laneCecilia W. Kathurima, Coffee Quality Manager, Coffee Research FoundationPO Box 4 - 00232, Ruiru, [email protected]

Plate 1. A grocers window in London displaying Kenya Coffee and Kenya Sceneries (Source: Kenya Coffee Bulletin, 1936)

Plate 2: National Milk Publicity Stand at the Alexandra Palace, North London, in 1936 where Coffee Board of Kenya was housed to serve Kenya Coffee (source: Kenya Coffee Bulletin, 1936)


Supervising brands for local hotels and outletsIn conjunction with the East African Hotel Keepers Association and in pursuance of the Boards drive for better coffee in hotels in Kenya, C R Devonshire (the then Chief Liquorer at CBK) visited five principal hotels in Nairobi, eleven hotels upcountry and three clubs in July 1937.

What he found was that the general standard of the coffee served was poor, and even if the recommendations regarding brewing were put in place very little change could be expected. Where faults were found in the coffee purchased, all hotels agreed to protest to their respective suppliers.

In this regard, CBK approved the recommendations from a meeting held between coffee roasters, the Hotel Keepers Association and CBK in 1938:

• Hotels should be asked to agree to only use blends of coffee approved by the Board.

• Roasters should submit their blends for the approval of the Board in consultation with experts.

• Hotels and cafes using the approved blends should be supplied with a sign for use on their menu stating that the quality of coffee served has been approved by the Board.

• In order to maintain the standard of the approved

blends and coffee sold to the public, the Board should make periodic tests of blends used and report thereon to the establishments concerned.

All this was done with the aim of serving better coffee to the Kenya public. It was hoped that future visitors to the colony would be given an opportunity of drinking good quality Kenya Coffee that is brewed properly.

The status of domestic coffee consumption in Kenya in 1939 was captured in the following quote:

‘’Kenya supplies the world with the finest coffees that are produced. There is no reason why she should not also supply her own residents and visitors with fine coffee in the cup’’ (CBK Monthly bulletin Vol 5 Feb 1939 No. 50).

74 years later however, the very same observation remains as pertinent. Today, few Kenyans have any idea of just how good Kenya Coffee is, nor where to get it. Indeed, were the CBK Chief Liquorer today to visit local hotels and sale outlets in Nairobi and upcountry, to taste the quality of coffee served; would he find things much different from when his predecessor, C R Devonshire, did the same in 1937?

FEATURE

The 9th Cabrio Ruiru Coffee Fair held at the Coffee Research Foundation (CRF) headquarters near Ruiru town on February 7th to 8th 2014, saw thousands of farmers challenged to increase their coffee yields.

“Our production volumes should be beyond a threshold that assures uninterrupted supply to new and captive markets and viability to investors in value chain logistics,” said the Chief Guest, the Agriculture Principal Secretary Ms Sicily Kariuki.

The Fair, which is the biggest event in the coffee calendar, was sponsored by the chemical company, BASF. At the Fair, the PS noted how Kenya has the potential to produce 350,000 metric tons (MT) of coffee, but instead national output has dropped to 45,000MT per year as yields per tree have sunk to 2kg against a possible 30-40kg per tree per year.

Ms Kariuki also asked the Coffee Board of Kenya to undertake a study to profile value addition opportunities in the sector.

“We would like to appeal to all stakeholders to ensure that their actions do not disrupt the coffee trade or diminish market confidence,” she added.

The over 2,000 farmers who attended the event were thoroughly enthused by the exhibitions of various coffee suppliers and service providers, with the presentation on the well-formulated CABRIO – famous for its containment of the dreaded Coffee Berry Disease – proving to be a real crowd-puller.

It’s time to boost production

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