There is no doubt that the coffee sector in Kenya is facing a dip both in terms of prices and crop production.
To put this into perspective, some statistical references on the coffee sector will be important to help understand the current situation.
Since its introduction in the 1980s, Kenya’s annual coffee production volumes were in excess of 150,000 tonnes.
This has since reduced to a meager 50,000 tonnes current annual average production.
Consequently, the coffee global market prices have been on a downward trend where the average prices have drastically dropped from highs of $3 a pound to lows of $1.2 a pound.
According to the coffee directorate, (formerly Coffee Board of Kenya), there were about 700,000 small scale farmers and about 3,800 private estates involved in coffee production in Kenya.
These numbers have since dropped significantly as more and more farmers are choosing to uproot their coffee trees in favour of other hot selling cash crops such as avocado and macadamia nuts.
Who to Blame?
A sneak peek into the coffee sector and one is able to see the never ending blame game that has characterized the once leading country’s export earner.
The farmer will throw the blame either to the government for its failure to support the industry or blame global warming, or even the industry so called “cartels” for bringing down the coffee business.
The government on the other hand will blame the global coffee regulators such as the ICO, poor management of cooperatives or even the collapse of the International Coffee Agreement (ICA) in the 80s.
The international regulators will also point fingers to political interferences, poor coffee quality in the market or unfair competition by the multinationals.
All these are vital factors to be considered as contributors to the dwindling fortunes of the coffee sector in Kenya but as industry players, we need to look more into some intrinsic factors that most outsiders tend not to focus on.
A keen look into the coffee sector trend and one cannot help but uncover the fact that every price boom season is conversely followed by a subsequent bigger price dip season.
This is because there is a correlation between prices and production quality in such a way that higher market prices tend to negatively affect the production quality.
As weird as this sounds, the drop in prices currently being experienced in Kenya is a testimony to this little overlooked fact.
Take for example a farmer who went out of their way last season to employ the best farming practices and produce coffee that fetched above average prices in the market that was extremely competitive due to the previous season shortage.
The same farmer may not feel compelled to put in more effort in the current season to produce a better quality.
Since the same buyers would want to compensate for their previous “loss,” they will not offer similar prices for a lower quality coffee again.
This cycle will keep impeding an exponential growth that the coffee farmers ideally hope for and the result is frustrations on the grower’s side that makes them lose faith in the industry.
There is no doubt that the coffee farmer is facing a myriad of challenges that need a multi-sectoral approach to address but as we stand, facing this little known agricultural paradox could be the missing link between the coffee farmer and better future prices.
By making the farmers aware of this factor, there will be increased caution which will result in consistent production of quality beans thus benefiting everyone in the coffee value chain.