A KSh163 million debt burden could be the reason eight coffee factories affiliated to Rumukia Cooperative Society in Nyeri inch closer to being auctioned.
In the 2013/14 financial year, a miller owed the society more than KSh74 million for cherry and mbuni (unwashed produce) while the cooperative owed farmers more than KSh85 million.
However, instead of remitting the money to the society for payments, Kenya Cooperative Coffee Exporters (KCCE) paid creditors (Sasini) KSh48 million and Kenya Cooperative Coffee Mills (KCCM) KSh25 million, leaving the farmers with nothing.
In the 2016/17 financial year, Cooperative Bank recovered KSh34 million Stabex funds from the society, pushing it further into borrowing.
Therefore, to pay farmers for their produce, the society was forced to borrow money from Taifa Sacco year after year, which has accumulated to millions of shillings.
Taifa Sacco, through Green Bell Auctioneers, seeks to reclaim farmers’ assets in all the factories under the cooperative to offset the debts that have pushed it to its knees. Consequently, the auctioneers have been instructed to cart away parchment worth KSh16 million, a KSh400, 000 weighing machine, a pulping machine and other office equipment that cost about KSh1.2 million.
Meanwhile, the Capital Markets Authority(CMA) is in the process of taking over and fully automating all marketing and auction processes at the Nairobi Coffee Exchange(NCE). The spot market should be in place by April 2021. Figures indicate that Kenya sells a large bulk of its coffee or 95% to overseas buyers through the NCE. The remaining portion is sold to foreign buyers through a direct market.
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