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August 07, 2008

Kenya to boost support for coffee, tea growing sectors

Kenya is boosting the budgets of its tea and coffee boards to help them compete more effectively in the global marketplace, a senior official said on August 5.


The tea board will get an additional 62 million shillings ($930,000) from state coffers this financial year, an increase of about a third on what it got last year.The coffee board, which only received 8 million shillings from the government last year, will get 110 million shillings.


"It will greatly help the farmers' earnings because they will be able to get good markets, therefore prices will be good," said the permanent secretary at Kenya's Agriculture Ministry, Romano Kiome. "We expect the farmers to get much higher margins than they are earning now."


Kiome said the tea board will market branded Kenyan tea while the coffee board is expected to carry out reforms to strengthen the farming and marketing of Kenyan beans.


The east African country is a small coffee producer by global standards, but its high quality beans are widely used to blend with coffees from other regions.


Kiome said a coffee bill which is making its way through parliament would be amended to address concerns among coffee traders that a proposed levy would hurt the industry. The bill proposes a one percent levy towards the Coffee Development Fund. "There are some suggestions that the levy may be too high, but we will look into it," the official said. "We may revise the figure after consultations with everybody."


Other recent coffee sector reforms have included opening up the market to let farmers deal directly with buyers. Kiome said this had improved earnings, but he cautioned that it would take time for more farmers to benefit.


"It requires a lot of knowledge and contacts for someone to sell directly, but there are a few people who are benefiting now," he said. "We would like to see more farmers do it because we believe the only way one can do good business is when you can negotiate your price."


Coffee and tea farmers in Kenya have complained that the high cost of inputs had eaten into already meagre earnings.

Reuters

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