Focus on crisis in coffee sector

For many years, Kenya has been famous for its coffee. Described as strong in body and intense in flavour, Kenyan coffee, which belongs to the Arabica variety, is considered one of the world's most consistent sources of high grade caffeine.

And because of its good cash returns to local farmers, coffee has traditionally occupied a large share of the country's most productive lands, grown mostly on rich, red volcanic soil in areas with high and well distributed rainfall.

However, the story has changed in the past decade. Like other nations, Kenya's coffee sector, which used to be the country's prime foreign exchange earner, has been badly affected by plummeting world prices and now trails behind horticulture, tea and tourism in the local economy.

With world prices falling by almost 70 percent since 1997, coffee farmers have complained they now get very little return for their hard work. Many now consider coffee to be a liability and, despite a law which prohibits farmers from uprooting their coffee plants, are clearing their land for other crops.

Boniface Kariuki is one such farmer, who has left his 105 acre land under coffee on the outskirts of Nairobi untended for months. He is planning to sell off most of his land and concentrate on his second-hand clothing business. "Coffee activity is very low right now. One can't depend solely on coffee. You have to have an alternative income," Kariuki told IRIN at his farm.

Other farmers like Patrick Ngugi are not as lucky to have alternative income to fall back on. "I have an acre under coffee, I don't get any money. My children are now being chased from school because of fees," he said.

To get enough food for his family, Ngugi has turned to cultivating maize, beans and vegetables in the spaces between his untended acre of coffee trees.

Experts have attributed the drastic fall in coffee prices on the international markets to the oversupply of beans, which has not been matched by demand. However, according to the British charity, Oxfam, the issue is more to do with fair global trade than just market demand and supply factors.

In a report it released in September, Oxfam stated that the deregulation of the coffee industry had pushed millions of coffee farmers in the developing world to destitution, while "the coffee companies are laughing all the way to the bank".

The report entitled: "Mugged: Poverty in Your Coffee Cup", said a drastic fall in world coffee prices was forcing small coffee farmers in developing countries to sell their beans for less than they cost to produce.

"The coffee market is failing. It is failing producers on small family farms for whom coffee used to make money," the report said.

Oxfam said it was concerned by the growing disparity in wealth between primary producers and large companies, especially following the drop in the value of the crop on the international market. It singled out the leading food multinational Nestle and the American coffee shop chain Starbucks as some of the obvious beneficiaries of falling coffee prices.

"Asking some of the poorest and most powerless people in the world to negotiate in an open market with some of the richest and most powerful results, unsurprisingly, in the rich getting richer and the poor getting poorer," it added.

Robert Nsivirwa, who runs the financial and economic division of the Ugandan-based Eastern African Fine Coffee also argues that there are double standards being applied in the international coffee market.

According to him, one metric tonne of coffee sold for about US $4,000 at the London Auction during the 1994/1995 coffee season. By 2001, the world price of coffee had plummeted to US $340 per tonne of beans at the same auction. However, this drastic price fall has not been translated to consumers, Nsivirwa told IRIN.

"There is a distortion somewhere, someone is eating the money in between. A cup of coffee still costs up to US $5 in many European and American restaurants," Nsivirwa said.

"Who is getting this money when people are going hungry, and children are out of school? If you are making profits and have no principles, then it becomes a moral problem," he added.

Nearly 90 percent of coffee earnings now goes to traders, leaving only about 10 percent for farmers, according to Nsivirwa. "Globalisation is survival for the fittest. When you don't have the muscle survival becomes very tough," Nsivirwa says.

"Globalisation does not recognise that people are at different levels of development. We are required to survive in that environment even though its tough," he adds.

To correct the surplus situation in the world coffee market, the International Coffee Organisation (ICO), the body which governs the global coffee trade, is working on measures that would ensure that producers do not sell low quality coffee beans on the international market.

Such measures, according to Nsivirwa, would boost the value of coffee and also ensure that production was more sustainable. There are also ongoing initiatives on promoting coffee consumption in Eastern European countries and China, he added. "We only hope the initiatives of holding stocks will solve the problem," she Nsivirwa aid.

Others like Harrison Njau, a manager of a tour company who also comes from the coffee growing highlands of Murang'a, Central Kenya, believe the solution to Kenya's coffee sector woes can only come about with a change of government.

Njau blames corruption in President Daniel arap Moi's 24-year rule for the problems facing the sector. "When we were young our parents got enough money from coffee to take us to good schools. These days there is no money. Now everything has been ruined by the Moi government. Children don't go to school anymore. Even coffee factories have closed down," Njau told IRIN.