You don’t have to be a caffeine connoisseur to know that specialty coffee from Kenya is amongst the most highly prized in the world, known for it’s sparkling grapefruit-like acidity and strong currant and wine-like flavor characteristics. Since the days of early colonization, coffee has been one of (if not the) leading export commodity for the East African nation. However, the industry has been plagued by corruption and poverty since its inception.Since 1935, farmers have been required to sell their beans at weekly government controlled auctions maintained by the Coffee Board of Kenya, a function of the Ministry of Agriculture. Even before the coffee industry suffered a severe price drop in the late 80’s (a result of an explosion of coffee on the world market), Kenyan farmers have contended that the cash for their crops were being lost in the process. Allegations of corruption have flooded the nation’s industry. The government on various occasions has cited transportation failures and theft as legitimate reasons to renege on their promised payments to farmers.

Even in favorable conditions, coffee prices are currently unsustainable for most farmers in Kenya. While the average pound of Kenyan coffee retails in the U.S. in the neighborhood of $15, farmers rarely receive more than 15% (and often much less) of the price at auction (approximately $3/kg). Calculate in the fact that more than 95% of Kenya coffee is wet processed (a labor and production intensive method requiring hand-picking/sorting and extensive equipment), and the result is labor expenses that are overwhelming for the farmers. Over 60% of coffee farms in Kenya are small (averaging around 3 acres), and there are few “estate” coffees. It’s no wonder that both growers unions (like the Kenya Planters Cooperative Union or KPCU) and the growers themselves have accrued excessive debts.

In an attempt to alleviate the problem, the government has attempted to boost the quantity of coffee being sold. However, this has only furthered the problem, flooding the market and dropping prices further.

Yet, there is hope. In November of 2006, the Kenyan government authorized new legislation known as “The Second Window,” making it legal for growers to pursue other marketing agents. There has been some misunderstanding of this new legislation, however. In the worldwide coffee industry, the laws have been perceived as allowing for direct access to farmers and their processed green beans by international coffee roasters. This unfortunately is not the case. The farmers are still required to operate through a marketing agent, who must be approved by the government. The illusion of control over the price of beans is undermined by the costs of the agencies.

While the marketing agent in some cases may be beneficial to farmers unfamiliar with the marketing aspect of their beans, in many cases farmers are content to maintain the status quo. The familiarity of the auction system, and the international exposure gained therein, are seen as outweighing the risk of trying the new method.

There are government imposed stipulations on the new coffee marketers; shortly after the legislation went into effect 32 agents were approved after allegedly establishing access to foreign markets and guaranteeing financial security for the farmers’ monies.

The KPCU has expressed frustration with the new laws, certainly in part because it will allow other agents to market beans providing stiffer competition. However, they also claim the purported financial transparency of the auction system will be undermined by the Second Window. Yet it may be the KPCU’s financial mismanagement and generally out-of-touch understanding of the country’s coffee industry that has in some ways instigated the reforms in legislation.

The government estimates that by 2008 some farmers will be ready to begin direct relationships with international coffee roasters, however there is no time table for such a procedure to become legal. Even so, all parties involved are required by law to come clean on their debts before attempting to utilize the Second Window, a prospect in the realm of impossibility for many impoverished farmers and cooperative unions.

Regardless of the debts, the presence of a third party is harmful for both the buyer and the grower, and there is little difference between an international organization like Fair Trade and the state approved marketing agents. The failure of Fair Trade is that its price guarantee (a little more than a dollar per pound of beans, and slightly higher for certified organically grown coffee — yet another process requiring an external agency with its own set of fees) only establishes provisions for the cooperative of farmers. As such, profits from a Fair Trade coffee from Kenya, like the Rumukia Farmers Cooperative Society (see articles here and here) will reach the organization, but there is no guarantee the money will trickle down to the actual farmers. This, in a nutshell, is the problem with the Kenyan coffee auction system in the first place, and Fair Trade cannot address the issue of sustainability for the growers.

Intelligentsia Coffee and Tea, under the leadership of owner Doug Zell and green coffee buyer Geoff Watts, has implemented a unique and beguilingly simple form of interaction with farmers which completely bypasses any third party certifier or marketing agent called Direct Trade which has garnered a fair amount of positive press regarding its environmental and humanitarian sustainability stipulations. However, without access to the farms directly, even this admirable relationship is impossible.

Hope is on the horizon, but it still remains distant for both the growers and the buyers in Kenya. While many of us have access to excellent Kenya coffee, the fact of the matter is that those responsible for its production are not being fairly compensated. Until further advances are made by the Kenyan government and by individuals who take it upon themselves to establish long-term relationships with the growers, poverty will continue to consume the growers of some of the finest coffee in the world.

I’ve personally sworn off drinking coffee from Kenya, until the situation improves. It’s difficult to turn down, but I’d rather not spend my money on products that only serve to profit greed and corruption.

For additional reading you might venture to:
Kenya Licenses New Players to Market its Coffee
Kenyan Coffee Farmers Ignorant of New Export System
Development-Kenya: Coffee Profits Not Percolating Down to Farmers
Kenya: Nothing to Show for Her 700 Trees
Voices of Kenya’s Voters
Ethiopia and Kenya: The World’s Most Distinctive Coffees
Kenya Coffee at Intelligentsia
Ministry of Agriculture
Kenya Publishes Rules on Direct Coffee Sales