By IPS Correspondents
NAIROBI, Dec 2 2008 (IPS)

The Windsor Golf and Country Club is a swanky five-star hotel, widely believed to possess the best 18-hole golf course in the East and Central Africa region. Its origin, dating back to 1992, marked the death knell of a golden era when coffee as a cash crop stood out as the top foreign exchange earner in Kenya.

Beginning 1988, coffee’s reign took a nose dive and for the first time since independence in 1963 it was pushed to fourth place, trailing tourism, horticulture and tea. This change of fortunes invariably raised red flags for players in the coffee sector.

Unsurprisingly some coffee farmers, particularly investors of large estates, took the extreme option of uprooting the crop altogether, replacing it instead with concrete in the form of real estate, as a way of hedging their bets against further losses.

Today, the Windsor Golf and Country Club remains a remnant of the time before the annihilation that befell large tracts of coffee farms, paving the way for glitzy real estate projects.

The country’s clan of nouveau riche remains the core beneficiaries of this economic metamorphosis, gobbling pricy residential properties built on swathes of land that were once coffee farms. These include Ridgeways, Garden Estate, Runda and Thome, the conspicuously leafy and gated suburbs of Nairobi.

‘‘The returns you get from a hectare of coffee as compared to real estate are smaller. Coffee also takes a long time to realise returns,’’ expounds Isaac Muchomba, the executive secretary of the Kenya Coffee Traders Association (KCTA), a non-profit organisation that represents all players in the industry.

In addition the sector faces the daunting specter of scarcity of labour. According to the KCTA, a labour crisis is simmering in the coffee industry as young workers are leaving to take better jobs elsewhere. In the small-holder sub-sector, the average age of coffee farmers is currently estimated at 56.

‘‘This implies an empty nest scenario in set-ups that have traditionally relied on family labour for farming activities,’’ the association says in a report. ‘‘As a consequence there has been downscaling of the area under coffee. This has further been compounded by the general lack of interest among the younger population.’’

Industry estimates show that the area under coffee this year is 142,117 hectares, down from last year’s 149,218 hectares.

But the capriciousness of the sector could soon be checked, with the possibility of a return of the golden era for the beleaguered sector. A protracted struggle to brand local coffee is succeeding.

Under a project ran by the Kenya Planters Co-operative Union (KPCU), the country’s largest coffee marketing and processing firm whose membership comprises over 700,000 small scale farmers and about 2,000 estate farmers, coffee will be branded based on qualities that differentiate it because of place of origin.

Currently three brands have been identified, including Mt. Kenya, Aberdares and Kenyan Blue Mountain.

According to assistant minister for agriculture, Gideon Ndambuki, the Kenyan government has put aside 3,5 million dollars to market branded Kenyan coffee, beginning 2009.

In the past, efforts to market Kenya coffee in the international market failed due to conflict of interests amongst individual marketers.

In Africa, Kenya is a latecomer to branding since several Africa states have been on it for years, for example Africa’ s top producer Ethiopia has three specialty coffees namely Yirgacheffe, Sidamo and Harar.

Other African States which have also followed the path of branding their coffees, include Burundi, Rwanda, Uganda, and Tanzania.

The momentum to brand Kenyan coffee began in late May this year in London when the Kenyan government signed regulations governing the sector globally under the international coffee agreements. Kenya was recognized as a producer, unlike in the past when the country’s coffees were used only to blend others from other countries.

Unfortunately this deal, which would have seen Kenyan farmers rake in more from the cash crop, suffered a temporary glitch after some among the 77 member countries of the International Coffee Organisation (ICO) postponed ratifying the London agreement by a year.

‘‘They keep changing as the global trade evolves,’’ says Louise Njeru, managing director of the Coffee Board of Kenya (CBK) who led the Kenyan delegation to London.

‘‘Farmers will benefit from higher premiums on their coffee, especially Blue Mountain, so called because it has similar attributes to Jamaica’s Blue Mountain which is the most expensive and fetches 45 dollars per pound,’’ says Sylvester K’Okoth, value addition and marketing manager at KPCU.

However, the CBK says that insignificant quantities are preventing farmers from benefiting from the price increase associated with branded coffee. ‘‘Even if farmers are paid well, the quantities they produce are not substantial and they are not benefitting fully since the costs of production remains high,’’ Njeru pointed out.

The board’s technical services manager, Benard Gichovi, explained that farmers are producing an average of three kilograms per tree, which is very low compared to the potential.

‘‘If farmers can produce 15 kgs per tree, then they could feel the effect of the increased prices but currently they cannot see the changes yet,’’ according to Gichovi . Njeru agrees that increasing production is the only way to help farmers increase revenue.

As the coffee industry regulator, CBK is optimistic of higher crop volumes, with Njeru saying it could receive about 57,000 tons of coffee in the 2008 season due to favourable weather. The volume of coffee produced in the country has been on a decline from a high of 128,000 metric tones in 1997/98 to 42,000 produced in 2007/08.

But George Ooko, managing trustee of the Coffee Development Fund (CDF), a local statutory outfit that lends money to coffee farmers, says that by 2012 Kenya will see annual coffee production hit 100,000 metric tons if the current tempo of disbursing loans to farmers is maintained.

This October for example, the two-year-old CDF disbursed a total of 10.1 million dollars to farmers to rehabilitate coffee trees where production has declined. ‘‘We had 50,000 farmers benefiting from our funds. In the coming season we shall cover another 50,000 farmers to have at least 100,000 benefiting.

‘‘These loans go to buy fertiliser and agro-chemicals. The farmer gets the money to buy inputs. We are targeting productivity per tree. If we double our exports earnings, the country will earn an average of eight billion shillings (102,6 million dollars) annually.’’

First grown here in 1893, Kenya is presently ranked the 18th largest producer in the world and sixth in Africa. It grows high quality Arabica beans which are superior in taste compared to the Robusta variety.

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