Government to Clear KSh 6.8 Billion Coffee Cooperative Debts

The Kenyan government will clear KSh 6.8 billion in verified debts owed by coffee farmers’ cooperative societies, Cabinet Secretary for Cooperatives and MSME Development Wycliffe Oparanya announced Thursday. The move is part of broader efforts to revive coffee production and improve farmers’ earnings.

Oparanya said the verified debts are part of a total KSh 10 billion owed by growers nationwide. The remaining KSh 2.2 billion will be recovered from cooperative officials accused of misappropriating funds. KSh 2 billion has been allocated in the 2025/2026 budget to begin repayments.

The initiative will be supported by sector reforms, including the Direct Settlement System (DSS), which channels 80% of coffee sale proceeds directly to farmers and 20% to cooperatives. The DSS aims to reduce delays, curb exploitation by middlemen, and promote transparency.

Farmers have also been urged to tap into the Coffee Cherry Advance Revolving Fund (CCARF) for low-cost credit to boost productivity. The government has set aside KSh 500 million for quality seedlings and modern pulping equipment, working in partnership with county governments.

In Kisii County, Agriculture CEC Elijah Obwori said the county is modernising equipment in 22 cooperative societies and has distributed 25,000 coffee seedlings over the past two years. Plans are underway to launch an e-voucher system to give farmers access to subsidised inputs.

The announcement was made during a sensitisation meeting on coffee revival at Kisii School, attended by the Principal Secretary for Cooperatives Patrick Kilemi, KPCU Chairperson Daniel Chemno, and Managing Director Timothy Mirugi.