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MBATARU: Why Kenyan coffee farmers wallow in poverty as dealers make a killing

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By PATRICK MBATARU
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The International Coffee Organisation (ICO) council is in Nairobi to talk about how to improve standards and shorten the distance between farmer, roaster, barista and consumer; and so on.

The council has been talking about these issues since the coffee crisis began 30 years ago. These worthies will be staying in some refined hotels to the west of Tom Mboya Street.

Yet thousands of coffee farmers cannot afford food and school fees for their families.

Here are some truths about coffee that the council might want to ponder. Coffee is the second most traded commodity globally after oil.

Over 2.8 billion cups of coffee are consumed daily, mostly in developed countries.

Globally, about 250 million people depend on the coffee economy, among them about 20 million producers.

Most coffee growers are poor small-scale farmers in developing countries spread across Africa, Southern America and Asia.

The global coffee business is worth anything from $50 billion to $100 billion (Sh500 billion to Sh1 trillion), but less than one sixteenth of this reaches farmers.

Typically, coffee farmers are a hungry, angry, shoeless lot of peasants, unable to take their children to school. It has been getting worse in the past three decades.

Currently, Kenyan small-scale coffee farmers earn about $100 (Sh10,000) annually for their effort.

However, a family of six in coffee growing areas needs a minimum of Sh150,000 annually to survive.

And while the coffee farmer has been impoverished, profits for multinational coffee dealers have tripled and in some cases quadrupled.

Small-scale producers have endured slave prices for too long. “Coffee growers received the equivalent of six cents per cup in 1983 even if the cup was sold at anything from $1 to $5. Today, they receive less than two cents (about three shillings),” Mr Fernando Morales de la Cruz, the CEO of Coffee for Change, a pressure group that fights for better treatment of producers, said.

So, what happened? A deeper understanding of the coffee market chain is important to avoid false hopes. First, coffee is a highly internationalised commodity.

It was long globalised before the internet. Local cartels are just the tip of the iceberg, being an extension of an intricate maze that is the international coffee trade.

About seven multinationals control most of this trade in a system Mr Morales de la Cruz plainly calls typical neocolonialism.

In 1988, the International Coffee Agreement (ICA) collapsed. During coffee’s heyday, this protocol assigned market quotas to members.

For example, Kenya produced about 140,000 metric tonnes in the 1980s but could only sell about 50,000.

However, due to the popularity of its coffee, the country could easily sell the remainder to non-members of the ICO.

In fact, Kenyan coffee still enjoys a unique position in the world because of its unique taste. This system ensured that producers got some fair prices.

In fact, big producers like Brazil would even dump excess coffee into the sea just to stabilise the market.

After the collapse of the quota system, it was free for all: Blood-sucking intermediaries and traders captured the market.

There are three coffee marketing systems: The traditional market, fair trade and direct coffee trading.

Kenya uses the traditional system. After the auction in Nairobi, the coffee ends up in the New York Coffee, Sugar and Cocoa Exchange, where most Arabica coffee is offered.

Here, Kenya’s coffee is identified as Colombia Mild (C) type and fetches a premium price.

Most Robusta coffee, the kind grown in Uganda, called Brazilian Naturals, is traded at the London International Financial Futures and Options and earns less.

Now, the traditional coffee market trade is over 100 years old. Kenya is a critical source of high-grade coffee for blending other coffees.

The largest roasters do not deal with farmers directly but rely on traders for supply.

In Kenya, large trading companies are the likes of Neumann Gruppe (Germany), Volcafé (Switzerland) and ECOM (Switzerland). These three multinationals trade 50 per cent of the world’s green coffee.

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The traditional system has attracted much criticism in the past 20 years.

It is seen as detached and a classic example of the heartless international trade, with little interest in the welfare of the farmer.

Analysts say the main problem is that farmers lack the social, cultural and economic capital to influence the system, and being from poor countries they will remain price receivers.

NGOs such as Coffee for Change are calling for a parallel system that does not answer to the dictates of the New York and London exchanges. However, this is a gamble because consumer economies are in charge.

Frustrations with the traditional system inspired organisations such as Oxfam and human rights groups to wage a campaign for an alternative trade based on values.

This gave birth to the fair trade system that attempts to force multinationals to take more interest in the plight of poor farmers.

Under this system, farmers are required to meet certain conditions like being in a cooperative society.

Cooperatives have to meet quality standards and labour conditions as outlined by the International Labour Organisation.

Once done, the cooperative invites a certification agency for approval.

Driving this trend are highly informed consumers in the West, who increasingly demand to know how the coffee they drink is produced.

This is all in the spirit of sustainable development. Consumers are ready to pay more for coffee.

This extra pay is supposed to be channelled back to fair trade-compliant farmers.

Fearing the wrath of consumers, most global coffee companies quickly complied with fair trade rules. Inevitably, questions have emerged. How fair is ‘fair trade’?

International trade is structured around profit, and only profit. Ethics and fairness are in the religious department.

“Consumers are unaware that less than a third of the so-called fair trade premium reaches the farmer. People must know that this ‘ethical’, ‘sustainable’, and ‘fair’ certifications perpetuate poverty, which is unacceptable …” Morales de la Cruz says.

Frustrated by the capture of the fair trade initiative by big multinationals, some roasters started looking for ways of contacting producers directly. This gave birth to the third trading system — direct trade.

The best known companies in the direct trade system are in the US and sell to specialty and high-end niche markets, where a kilo of coffee could cost a bit more than a small saloon car.

The three pioneer companies in this system are Intelligentsia Coffee and Tea, Counter Culture Coffee and Stumptown Coffee Roasters.

“Direct trade is about relationships. A method of sourcing coffee based on its quality. It is about respect. Buyers travel the world to find the best coffee from the best farms. When they find it, they work directly with the farmer,” Direct Trade Coffee Club says on its website.

Little can be done in the short term about international trade systems. Unless the gods strike Brazil’s, Colombia’s and Vietnam’s coffee with eternal frost, Kenyan growers will remain poor if they depend on the traditional market alone.

Innovation is necessary. Unlike Ethiopia where half of its coffee is sold in the country, we don’t have a coffee drinking culture.

Despite the issues facing the sector, Kenyan coffee still stands a good chance in niche markets.

The most important thing for Kenyan farmers is the high quality of their coffee.

Our cooperatives have a comparative advantage over other producers around the world because of well-established quality assurance practices.

Extension services are mostly dead but they can be reactivated.

Direct trade presents a distinctive chance for producers to receive better prices and establish a direct relationship with roasters, but cooperatives should be professionally managed for this to work.

The government should actively support the system.

Dr Mbataru teaches at Kenyatta University and is the author of The Coffee Crisis, Old Interests, New Interests and the Illusions of Development



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Public officers above 58 years and with pre-existing conditions told to work from home: The Standard

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Head of Public Service Joseph Kinyua. [File, Standard]
In a document from Head of Public Service, Joseph Kinyua new measure have been outlined to curb the bulging spread of covid-19. Public officers with underlying health conditions and those who are over 58 years -a group that experts have classified as most vulnerable to the virus will be required to execute their duties from home.

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However, the new rule excluded personnel in the security sector and other critical and essential services.
“All State and public officers with pre-existing medical conditions and/or aged 58 years and above serving in CSG5 (job group ‘S’) and below or their equivalents should forthwith work from home,” read the document,” read the document.
To ensure that those working from home deliver, the Public Service directs that there be clear assignments and targets tasked for the period designated and a clear reporting line to monitor and review work done.
SEE ALSO: Thinking inside the cardboard box for post-lockdown work stations
Others measures outlined in the document include the provision of personal protective equipment to staff, provision of sanitizers and access to washing facilities fitted with soap and water, temperature checks for all staff and clients entering public offices regular fumigation of office premises and vehicles and minimizing of visitors except by prior appointments.
Officers who contract the virus and come back to work after quarantine or isolation period will be required to follow specific directives such as obtaining clearance from the isolation facility certified by the designated persons indicating that the public officer is free and safe from Covid-19. The officer will also be required to stay away from duty station for a period of seven days after the date of medical certification.
“The period a public officer spends in quarantine or isolation due to Covid-19, shall be treated as sick leave and shall be subject to the Provisions of the Human Resource Policy and procedures Manual for the Public Service(May,2016),” read the document.
The service has also made discrimination and stigmatization an offence and has guaranteed those affected with the virus to receive adequate access to mental health and psychosocial supported offered by the government.
The new directives targeting the Public Services come at a time when Kenyans have increasingly shown lack of strict observance of the issued guidelines even as the number of positive Covid-19 cases skyrocket to 13,771 and leaving 238 dead as of today.
SEE ALSO: Working from home could be blessing in disguise for persons with disabilities
Principal Secretaries/ Accounting Officers will be personally responsible for effective enforcement and compliance of the current guidelines and any future directives issued to mitigate the spread of Covid-19.

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Uhuru convenes summit to review rising Covid-19 cases: The Standard

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President Uhuru Kenyatta (pictured) will on Friday, July 24, meet governors following the ballooning Covid-19 infections in recent days.
The session will among other things review the efficacy of the containment measures in place and review the impact of the phased easing of the restrictions, State House said in a statement.
This story is being updated.
SEE ALSO: Sakaja resigns from Covid-19 Senate committee, in court tomorrow

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Drastic life changes affecting mental health

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Kenya has been ranked 6th among African countries with the highest cases of depression, this has triggered anxiety by the World Health Organization (WHO), with 1.9 million people suffering from a form of mental conditions such as depression, substance abuse.

KBC Radio_KICD Timetable

Globally, one in four people is affected by mental or neurological disorders at some point in their lives, this is according to the WHO.

Currently, around 450 million people suffer from such conditions, placing mental disorders among the leading causes of ill-health and disability worldwide.

The pandemic has also been known to cause significant distress, mostly affecting the state of one’s mental well-being.

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With the spread of the COVID-19 pandemic attributed to the novel Coronavirus disease, millions have been affected globally with over 14 million infections and half a million deaths as to date. This has brought about uncertainty coupled with difficult situations, including job loss and the risk of contracting the deadly virus.

In Kenya the first Coronavirus case was reported in Nairobi by the Ministry of Health on the 12th March 2020.  It was not until the government put in place precautionary measures including a curfew and lockdown (the latter having being lifted) due to an increase in the number of infections that people began feeling its effect both economically and socially.

A study by Dr. Habil Otanga,  a Lecturer at the University of Nairobi, Department of Psychology says  that such measures can in turn lead to surge in mental related illnesses including depression, feelings of confusion, anger and fear, and even substance abuse. It also brings with it a sense of boredom, loneliness, anger, isolation and frustration. In the post-quarantine/isolation period, loss of employment due to the depressed economy and the stigma around the disease are also likely to lead to mental health problems.

The Kenya National Bureau of Statistics (KNBS) states that at least 300,000 Kenyans have lost their jobs due to the Coronavirus pandemic between the period of January and March this year.

KNBC noted that the number of employed Kenyans plunged to 17.8 million as of March from 18.1 million people as compared to last year in December. The Report states that the unemployment rate in Kenya stands at 13.7 per cent as of March this year while it stood 12.4 per cent in December 2019.

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Mama T (not her real name) is among millions of Kenyans who have been affected by containment measures put in place to curb the spread of the virus, either by losing their source of income or having to work under tough guidelines put in place by the MOH.

As young mother and an event organizer, she has found it hard to explain to her children why they cannot go to school or socialize freely with their peers as before.

“Sometimes it gets difficult as they do not understand what is happening due to their age, this at times becomes hard on me as they often think I am punishing them,”

Her contract was put on hold as no event or public gatherings can take place due to the pandemic. This has brought other challenges along with it, as she has to find means of fending for her family expenditures that including rent and food.

“I often wake up in the middle of the night with worries about my next move as the pandemic does not exhibit any signs of easing up,” she says. She adds that she has been forced to sort for manual jobs to keep her family afloat.

Ms. Mary Wahome, a Counseling Psychologist and Programs Director at ‘The Reason to Hope,’ in Karen, Nairobi says that such kind of drastic life changes have an adverse effect on one’s mental status including their family members and if not addressed early can lead to depression among other issues.

“We have had cases of people indulging in substance abuse to deal with the uncertainty and stress brought about by the pandemic, this in turn leads to dependence and also domestic abuse,”

Sam Njoroge , a waiter at a local hotel in Kiambu, has found himself indulging in substance abuse due to challenges he is facing after the hotel he was working in was closed down as it has not yet met the standards required by the MOH to open.

“My day starts at 6am where I go to a local pub, here I can get a drink for as little as Sh30, It makes me suppress the frustration I feel.” he says.

Sam is among the many who have found themselves in the same predicament and resulted to substance abuse finding ways to beat strict measures put in place by the government on the sale of alcohol so as to cope.

Mary says, situations like Sam’s are dangerous and if not addressed early can lead to serious complications, including addiction and dependency, violent behavior and also early death due to health complications.

She has, however, lauded the government for encouraging mental wellness and also launching the Psychological First Aid (PFA) guide in the wake of the virus putting emphasis on the three action principal of look, listen and link. “When we follow this it will be easy to identify an individual in distress and also offer assistance”.

Mary has urged anyone feeling the weight of the virus taking a toll on them not to hesitate but look for someone to talk to.

“You should not only seek help from a specialist but also talk to a friend, let them know what you are undergoing and how you feel, this will help ease their emotional stress and also find ways of dealing with the situation they are facing,” She added

Mary continued to stress on the need to perform frequent body exercises as a form of stress relief, reading and also taking advantage of this unfortunate COVID-19 period to engage in hobbies and talent development.

“Let people take this as an opportunity to kip fit, get in touch with one’s inner self and  also engage in   reading that would  help expand their knowledge.

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