farmers lament no lack of payment from cooperatives

The Great Theft;How cooperatives are failing to pay farmers

Coffee farmers are lamenting delayed payments dating back to December 2023. Most coffee cooperatives have farmers’ arrears since the government intervened and caused the di-licensing of most private coffee millers.

Though there was a gradual increase in coffee prices from January to May 2024, at the Nairobi coffee auction as seen in our latest coffee market prices analysis, the majority of farmers are yet to receive their payment.

Cooperatives’ managements are doing half payment, a psychological move to prevent farmer unrest.

Mr Kamau; not his real name, a coffee farmer in Gatundu North constituency delivered his coffee in December 2023 to his cooperative and has never received payment since then.

Have farmers who delivered at a similar period been paid? Yes, some have been paid while others have not. Sadly, the management cannot produce either the payment or the coffee.

Imagine going over 4 months without pay and having no hope of when it will be paid. This is not an exceptional case as most dairy farmers are suffering due to delayed payments mounting for months.

This is not an exception case. Most dairy farmers are suffering due to delayed payments mounting for months.

Very few farmers’ cooperatives give bonuses and dividends as what they announce is just losses. Most are bankrupt and run on overdrafts and loans that farmers pay with large interest. Cooperative assets are sold without the farmer’s approval and do not appear in their end-year financial accounts.

Cooperative assets are sold without the farmer’s approval and never appear in their end-year financial accounts.

I am aware of a dairy cooperative where farmers did not receive payment for their milk for three months. During a particular annual general meeting (AGM), the farmers were informed that their money had been used to purchase a delivery truck and a piece of land for growing hay during dry seasons. However, after the AGM, the farmers did not see the truck, nor did they receive any bales of hay.

After the AGM they never saw the truck nor received any bales of hay.

I know you may be wondering how annual audits are conducted. Unfortunately, there are structural loopholes in place that allow for the embezzlement of farmer’s funds. The budgets and financial accounts are often manipulated and supported by receipts that represent fictitious transactions.

The budgets and financial accounts are often “cooked” and backed with receipts that delivered only air.

Commotions are created on AGM Day to prevent elite farmers from asking questions. This is the main reason why most cooperatives exhibit chaos at AGM Day.

Farmers chaos
Chaos at coffee farmers AGM

Losses, how?

It is hard to understand how cooperatives can fail to make a profit. Imagine a farmer giving them raw material on a credit and allowing them to trade with their money for 30 days. Unfortunately, greed cannot allow them to make a profit. Even one shilling.

Currently, most farmers’ dairy and coffee cooperatives are closing up. Farmers are uprooting their coffee. Dairy farmers are turning to private companies and brokers to buy their milk.

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