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By Mercy Kachenge
Nairobi, Kenya: A storm is brewing in Kenya’s coffee sector as farmers, cooperatives, and lawmakers clash with the Ministry of Cooperatives over the controversial Direct Settlement System (DSS), a payment platform they say threatens to dismantle the decades-old cooperative system.
Gathoni Wamuchomba, Founder and Chairperson of Coffee Caucus, and a coffee farmer, has emerged as a vocal critic of the DSS. She convened farmers and union representatives from across the country to voice collective opposition to the system’s implementation without proper parliamentary engagement.
“I am a coffee farmer. I have been receiving distress calls from farmers all over Kenya. The DSS was nullified by Parliament in 2022 after uproar from stakeholders. Yet now, the Ministry is reviving it through a circular, bypassing parliamentary oversight. That’s unconstitutional, ’said Wamuchomba. “
The DSS, first proposed under the 2019 regulations and later reviewed in 2021, was intended to streamline payments directly from buyers to farmers, thereby eliminating intermediaries and enhancing transparency. But stakeholders argue that it is doing the opposite, stripping cooperatives of their central role and undermining the very structure that sustains coffee production.
Felix Mureithi Mwai, the National chairman of the National Coffee Cooperative Union (NACCU), said farmers are united in their opposition.
“This is a national issue. These leaders behind me represent over 70 percent of Kenya’s coffee production. The November 18 circular directing payment to individual farmers threatens to kill our cooperatives, destroy farmer support systems, and collapse production entirely,” said Mwai
He added that coffee production is a year-long process that depends heavily on cooperative support. “From flowering to harvesting, processing, milling, and marketing, it’s a long chain. Cooperatives support farmers throughout. Without them, farmers can’t manage.”
The DSS, he warned, is already financially crippling cooperatives. “We are being branded thieves. Yet that coffee hasn’t even reached the market. Who’s paying the costs in the meantime?”
Wamuchomba said some societies attempted to use DSS last season, but payments were still routed through cooperatives, not directly to individual farmers as the new circular demands. Farmers now fear the shift could expose them to transactional costs and cut off critical services offered by cooperatives.
“What’s being proposed is that 20 percent of a farmer’s earnings be withheld for expenses, but that amount isn’t even enough to sustain cherry production,” said Mwai. “If you eliminate the cooperative, you eliminate the structure. That’s 70 percent of production at risk.”
The stakeholders also took issue with the alleged monopolization of coffee payments through one commercial bank under DSS. Originally, three banks were to facilitate transactions. Farmers claim the single bank now handling payments has become uncooperative.
“They’ve turned into competitors in court instead of partners in progress,” Wamuchomba said. “How do you sue your customer? This bank has gone against the spirit and letter of the regulation.”
The group(cooperatives) has prepared a memorandum to present to President William Ruto, urging the government to suspend the current rollout of DSS and consult widely with farmers and cooperatives. They are asking for coffee to be treated not as a political tool, but as a national heritage crop that must be protected.
‘’If the DSS continues in its current form, societies will collapse, factories will close, and coffee will be over for Kenya,” Wamuchomba emphasized
As they await a meeting with the President at Harambee House, their message is clear: return the money to the societies, and let the people who grow the coffee have a say in how it’s managed.
