The National Task force on Coffee Sub-Sector Reforms has made recommendations, that if implemented, could see the Nairobi Coffee Exchange (NCE) management transformed.
The proposal cites the Capital Markets Authority as the new regulator removing NCE’s mandate from the existing Kenya Coffee Producers and Traders Association (KCPTA).
The task force has also proposed major changes in NCE’s existing board of directors where the Principal Secretaries in the Ministries of Agriculture, Finance, and Cooperatives will be added to the board.
The existing board of directors comprises of traders, farmers, and processors who will be retained but on a diminished role. They will also be appointed to the board by the CS, Ministry of Agriculture.
The transformation of the NCE management aims to enhance transparency in coffee trading in the country after some stakeholders involved in trade were alleged of manipulating the prices.
Global traders have been blamed for marking down the coffee price at the NCE auction to get unfair profit margins at the global level.
The traders, who are currently sitting on the board, have been charged with exploiting market-price determination leading to an unfair share of decision making at the exchange.
The proposed changes at NCE are part of the government’s efforts to assess the challenges affecting the coffee industry in the country.
Over the last decade, the coffee industry has nearly consistently deteriorated compared to the days it was a profitable sector. Unfortunately, coffee farmers have borne the largest share of suffering from this decline as they continue to grapple with theft of coffee produce, mismanagement of cooperatives, delayed payments, and poor marketing strategies.
As a result, many coffee processing factories have closed down as farmers move to more high-paying sources of income such as real estate.
In April 2018, President Uhuru initiated the creation of the Coffee-Sub-Sector Implementation Committee (CSIC) to direct and coordinate the successful application of the recommendations given in the National Task Force on Coffee Sub-Sector Reforms’ report.
The committee’s immediate role is to promote the revival of the coffee industry in Kenya.