Cabinet Secretary for Cooperatives and Micro, Small and Medium Enterprises (MSMEs) Wycliffe Oparanya has warned that Kenya will only settle audited and verified coffee cooperative loans.

Mr Oparanya says a comprehensive audit of coffee societies’ liabilities established that only Ksh6.8 billion out of the claimed debts was legitimate and eligible for settlement.

Speaking to hundreds of coffee farmers at Kairuri Grounds in Manyatta Constituency during a tour of Embu County this week, the cabinet secretary said any fictitious loans will not be covered and may even lead to legal action.

The minister said the government had put in place stringent verification mechanisms to ensure that only legitimate claims backed by supporting documents and minutes authorising borrowing will be paid.

“Any cooperative society whose debt is not reflected in the audited report will have to resolve those obligations internally through their management committees and farmers,” he directed.

Oparanya confirmed that the government has already begun settling the verified debts, with Ksh2 billion set aside in the initial phase of payments.

At the same time, Oparanya announced a policy shift that will bar cooperative societies from procuring their own milling machines. Instead, he said milling services will be centralised under the New Kenya Planters Cooperative Union (KPCU) that will act as the primary service provider for all coffee cooperatives requiring the services.

The move, he said, will save societies from incurring huge expenses of procuring them yet most of the time they remain idle as coffee harvesting and milling season is short as well as cut operation costs in terms of specialised staff, maintenance and security.

“We want a scenario where any society in need of milling services will engage the New KPCU to offer the services at a minimal fee,” he said, noting that sharing of the service will also help lower the processing cost for the farmers.

The minister also said the state had barred the societies from going for loans from commercial banks for inputs and cherry advances to prevent them from falling back to debt traps.

He said the Government had instituted measures to ensure farmers have cash in their pockets to support their farming through the Cherry Advance Revolving Fund (CCARF) and Direct Settlement System (DSS).

“We have ensured that farmers have access to cheap CCARF loans to purchase inputs and also meet immediate household needs as they wait for their harvest to be sold,” he said.

Similarly, the cabinet said that through the DSS mechanism, farmers are able to receive their pay directly to their accounts within five days once their coffee is sold at the Nairobi Stock Exchange.

“We these strategies in place, there would be no justification for any society to go for loans from commercial lenders,” he stated.

Meanwhile, the CS said the government was working towards tripling coffee production annually from 50, 000 metric tonnes to 155, 000 by the year 2028. He reported that some of the ways of doing so was by introducing the crop into new zones and increasing acreage under coffee.

• A Tell Media / KNA report / By Samuel Waititu