Nairobi – Kenya’s largest coffee farmers’ union is urging the government to delay a key reform aimed at streamlining payments to growers, citing slow implementation and rural access barriers.
In a formal appeal to the government, the National Coffee Cooperative Union (NCCU) has asked for a one-year extension of the Direct Settlement System (DSS), a scheme introduced in 2023 requiring all proceeds from coffee sales to be deposited directly into individual farmers’ bank accounts.
The union says the plan, while well-intentioned, is proving difficult to implement in many rural and marginalized areas where farmers still lack access to formal banking services.
“We’re asking for more time—not to resist the system, but to make it work for every farmer,” said Francis Ngone, the NCCU chairperson, in a statement issued Monday. “Many of our members still don’t have bank or SACCO accounts. Others need help with financial literacy.”
Ngone has submitted a memorandum to Co-operatives Cabinet Secretary Wycliffe Oparanya, asking that the deadline for full compliance be extended to June 2026. The extra time, he said, would allow cooperatives to complete data clean-ups and assist farmers in opening the necessary financial accounts.
The DSS was rolled out in August 2023 as part of the government’s broader push to reduce corruption and improve transparency in the coffee sector—a long-troubled industry that has suffered from mismanagement, poor returns, and growing farmer frustration.
While many have praised the system’s aim of cutting out middlemen and guaranteeing prompt payments to growers, challenges remain. In areas without easy access to banks or digital platforms, some farmers are still paid through cooperative societies or third parties.
Ngone also warned against what he called “politicization” of the payment system by players with vested interests.
“We need safeguards to keep the DSS focused on farmers not on politics,” he said.
Beyond the payment issue, the NCCU is also pushing for a review of the current levy structure applied across the coffee value chain. Under the existing framework, funds are allocated to a range of bodies including brokers, the Capital Markets Authority, the Nairobi Coffee Exchange, and the DSS itself.
Ngone argues that unless these charges are carefully reviewed, they could eat into farmers’ already narrow margins.
“The system should be transparent, and any levies must directly support services that benefit the farmer,” he said.
The government has yet to respond publicly to the NCCU’s appeal, though officials have previously defended the DSS as a step towards long-overdue reform in a sector that contributes billions to the economy but often leaves smallholder farmers struggling.
As the next harvest season approaches, farmers and cooperatives alike are waiting to see whether the Ministry of Co-operatives will allow more time to get the system right or hold the line on reform deadlines.
