Leaders of coffee cooperative societies in Murang’a County have raised strong objections to the government’s Direct Settlement System (DSS), a recently introduced model that facilitates direct payment to coffee farmers.
While acknowledging and supporting ongoing reforms in the coffee sector, the leaders argue that DSS undermines the critical role played by cooperative societies and threatens their financial sustainability.
In a recent consultative meeting between officials from the State Department for Cooperatives — led by Principal Secretary Patrick Kilemi — and Murang’a coffee farmers, society leaders expressed mixed reactions to the DSS initiative.
While they welcomed broader reforms meant to revitalize the sector, they voiced concern over the direct payment model, warning it could render cooperative societies irrelevant.
Under the DSS model, farmers are paid directly within five days after their coffee is traded at the Nairobi Coffee Exchange (NCE), bypassing the traditional channel of cooperative societies.
The system is designed to reduce delays and enhance transparency in coffee payments. However, cooperative leaders argue that this seemingly farmer-friendly approach could have unintended consequences.
Godfrey Kanyiri, Chairman of Kahuhia Cooperative Society, warned that bypassing cooperatives during payment transactions could destabilize the entire coffee value chain at the grassroots level.
Speaking to Kenya News Agency (KNA) by phone, Kanyiri underscored the critical functions cooperatives serve — from cherry collection and weighing to processing and marketing.
“Our societies are the backbone of the coffee value chain at the local level,” said Kanyiri. “They are entrusted with weighing and processing cherries before marketing them through brokers. Most farmers don’t even have dollar accounts, yet coffee at the NCE is traded in USD. Channeling payments through societies remains the most efficient and farmer-friendly approach.”
Kanyiri further cautioned that DSS could disrupt financial obligations tied to cooperative operations, including servicing debts and meeting operational costs.
Many societies rely on deductions from payments to cover administrative expenses and service loans, he noted.
“The cooperatives are already burdened by significant debts, which are repaid through farmers’ earnings. DSS introduces uncertainty into this process and risks delaying or defaulting on these obligations,” he said.
He also called on the government to prioritize increasing production and supporting farmers with resources rather than introducing divisive payment models.
“Let’s not mislead the growers. What farmers need most is improved extension services and subsidized inputs — not disruption of a system that supports them,” Kanyiri emphasized.
Despite his reservations, Kanyiri acknowledged that Kahuhia Cooperative Society had received Sh130 million through DSS in the 2024/2025 coffee year, with Wanjengi factory recording the highest payout at Sh141.55 per kilogram.
However, he reiterated that such successes should not eclipse the underlying structural risks of bypassing cooperatives.
Similarly, Murang’a Cooperative Union Chairman Francis Ngone emphasized that cooperative societies are best positioned to spearhead efforts to boost coffee production.
“These societies help farmers access subsidized fertilizers, pesticides, and agronomic training. Removing them from the financial equation is akin to leaving farmers to fend for themselves,” he said.
Ngone maintained that cooperative societies are uniquely equipped to provide services, aggregate produce, and promote economies of scale — all of which are critical to reviving Kenya’s once-thriving coffee industry.
In response to the concerns raised, PS Kilemi affirmed that the government will continue engaging stakeholders before making any final decisions on the DSS rollout.
He reiterated that the system was introduced with the intention of ensuring timely payments to farmers, which has historically been a major challenge in the sector.
“The government is committed to increasing coffee production and improving farmer livelihoods. We will continue to listen to all stakeholders and adopt a model that supports the long-term interests of our farmers,” said Kilemi.
As the debate continues, it remains clear that while the DSS offers promise in improving efficiency and accountability, its implementation must be carefully managed to avoid destabilizing institutions that have long supported the country’s coffee farmers.
The government now faces the delicate task of balancing modernization with sustainability in one of Kenya’s most vital agricultural sectors.
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