Kenya will license farmers’ coffee cooperative societies as agents to export coffee, an initiative likely to ignite a new business war with established local and international marketers.

Agriculture and Food Authority (AFA) chairman Cornelly Serem said as part of reforms in the coffee subsector, the societies will directly market their produce internationally.

“Having succeeded in licensing farmers associations as coffee brokers in the last few years, our next move is to register new agents to ship coffee overseas,” said Serem.

He said the national and county governments are working jointly with established coffee societies to ensure they meet all the required regulations before being granted export licences.

“ Licensing primary coffee cooperative societies will help in the reduction of cost of doing business and enhance income to farmers,” Serem said.

International coffee companies with locally established subsidiaries export most of Kenya’s coffee.

For the last two years, the government under a coffee reform agenda has been reorganising the milling and marketing of Kenya coffee as part of empowering local farmers.

In the development of the coffee industry in the country, Serem said that some farmers’ coffee cooperative societies have managed to integrate their business as part of reducing costs and thus boosting farmers’ income.

Serem made the remarks during the celebration of International Coffee Day held at Kirinyaga County Co-operative –Coffee Mill located in the Kiaga area. “We have coffee societies that have processing units, mills and brokerage companies.

Licensing agents to export the commodity will advance their profile both locally and internationally,” he added.

The government, Serem affirmed, is fast-tracking the reform agenda to ensure the industry is free of distortions by cartels and unscrupulous traders.

Kirinyaga County Co-operative Union Limited chairman Geoffrey Munyagia said the organisation has made strides in terms of selling farmer’s coffee through the Nairobi Coffee Exchange (NCE).

The union has been selling its coffee through Kirinyaga Slopes Coffee Brokerage Company Limited, one of the 16 coffee brokers registered by the Capital Markets Authority (CMA) to market Kenyan coffee at NCE.

Since it was established in October last year, the company has traded most of the coffee at NCE with the clean beans fetching some of the highest prices at the auction.

By establishing its own mill, Munyagia confirmed the union has reduced milling cost by five per cent from 22 per cent to 17 per cent in the last one year.

“We decided to adopt the integrated business model following frustrations in the coffee arena by other local and international companies which could charge us exorbitantly in terms of transport and milling costs," said Munyangia.

By mid-August this year, Kirinyaga Slopes had sold coffee worth $35.7 million (Sh4.6 billion) out of $167 million (Sh21.5 billion), representing 21.43 per cent.

The chairman confirmed that out of the total coffee sold through the auction out of 18 societies in the county paid over Sh100 with the highest paying almost Sh130.