[News] KPCU wants direct sales of coffee bl …
KPCU wants direct sales of coffee blocked
Story by: GEOFFREY IRUNGU
Publication Date: 03/31/2006
Kenya Planters Cooperative Union wants the idea of a second
window for coffee sales to remainjust that: an idea.
The union would be among the losers in the event of a complete
liberalisation of the coffee industry to allow direct marketing,
or second window.
The late chairman of Kenya Planters Cooperative Union (KPCU),
Stephen Kirubi, had warned farmers about the dangers of direct
coffee marketing method before he died, deputy chairman
Kasembeli Makokha said.
He said that the changes introduced at KPCU have created efficiency
and generated considerable gains that have been extended to farmers
through reduced tariffs for services offered to them –
milling, marketing and even credit for farming related activities.
He noted that proper liberalisation must take into account farmers'
interests and that KPCU was realising benefits from the changes in
restructuring which initiated by Mr Kirubi. The restructuring
involved technological improvements for the coffee processing and
IT facilities. New workers were hired and other shifted to areas where
they performed better.
However, the biggest threat to KPCU's financial health would come
from direct marketing off coffee.
For now, the much-talked-about second window is yet to become a reality.
Some players in the subsector, including KPCU, supports the central
auction system for marketing coffee.
There are fears that those who hold loans with some marketers could
deliver their produce to promoters of the second window.
There would be no practical way of recovering the debt, because the
coffee delivered to marketers was the security given for the loans:
if they were to take their coffee elsewhere, then they would not
pay the loans.
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