Government-Appointed Watchdog Group to Look Into Kenya Coffee Sector

Competition Authority members at the launch of the group’s 2013-2017 strategic plan. Facebook photo by CAT.

A government-appointed watchdog group in Kenya says it is looking into allegations of unethical and illegal trading in the coffee sector. It is the latest in a complicated series of political maneuvers that began with this past season’s milling centralization in the county of Nyeri.

The Competition Authority of Kenya, which was created in 2010 during constitutional revisions that gave the country’s Minister of Finance rule-making authority, said in public letters last week that it intends to “get the evidence and prosecute whoever is involved” in practices that violate national and international trade laws, according to multiple local reports from local sources including Standard Digital and The Daily Nation.

(more: Kenya’s Mount Elgon Coffee Producers to Get New Processing Plant)

The group says it plans to look into allegations levied by Governors in Nyeri, Kiambu, Murang’a, Kirinyaga and Meru who say that cartels are violating trade laws through marketing collusion and extortion. In public letters, the group also instructed those very governors not to establish any new trade models that may also negatively affect the coffee trade.

Nyeri Gov. Nderitu Gachagua made waves this past season when he ordered that all coffees in the county be processed at a central mill in Sagana. He said the one-time-only mandate was a response to a small number of cartels that were controlling the coffee trade, resulting in approximately 30 percent losses at local mills and a “hostage” situation among aging smallholder farmers.

(more: U.S. Senate Passes 2014 Farm Bill, Including Provisions for Coffee Farmers)

In April, Gachagua told Daily Coffee News that Governors in the five counties were moving forward with an oversight plan that would require price verification for all coffee sold, although the government would assist in facilitating direct relationships with individual mills and farmers.

The move angered many buyers who missed opportunities from this past harvest, and many have been skeptical of any government-led oversight plan in Nyeri and beyond.

For more on the situation in Kenya, read: Nyeri is Just the Beginning: Some Clarification on the Controversy in Kenya