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Gangsters conspire to fleece coffee farmers

Details

Published on Saturday, 18 September 2010 19:09

In cases reminiscent of the Chepkube coffee smuggling of the mid 1970s, coffee farmers in Nyanza are losing millions of shillings from the illegal trade.

Many theft cases have been reported recently where coffee is stolen from pulping plants at farmers’ co-operative societies and sold illegally in local and foreign markets. Despite the stringent rules governing production and sale of the crop in Kenya, criminal syndicates are raking in millions by smuggling the produce from farmers’ co-operative societies.

Investigations by CCI reveal much of the coffee is smuggled into neighbouring Uganda through Busia border and to Tanzania. Some of the coffee finds its way to private millers in Nairobi and other towns. Theft cases have been reported in Rachuonyo, Nyamira and Rongo but it is more pronounced in Gucha District.

"We have been forced to hire at least six watchmen to guard our co-operative society. Sometimes the whole village takes turns to guard the coffee because thieves have become ruthless and dangerous," says Mathias Oloo, a coffee farmer and member of Kabondo Co-operative Society in Rachuonyo District.

The people behind the business are bold, moneyed and willing to go to any lengths, including maiming individuals who stand in the way, to obtain the ‘gold’.

Gucha District Co-operatives Officer Samwel Nyakangi says the dealers in the black market hire youth to collect coffee from drying beds at factories in the dead of the night. "This is a big syndicate that uses proxies to achieve their ends. They appear to have a network within co-operatives that keeps them informed on the quantity of coffee in store," Nyakangi told CCI. The Coffee Board of Kenya advisory officer for Nyanza, Mr Javan Chemiat, says the Coffee Act number 9 of 2001 outlaws any transaction in coffee without a license from the board.

"Coffee is a protected crop in Kenya, but in some countries, legislation is not strict. We advise farmers’ co-operatives societies not to pile up stock so much as it makes them susceptible to attack," said Chemiat at a recent baraza. According to Chemiat, about 1,000 bags of coffee out of the 50,436 bags produced in Nyanza by July this year was stolen. Figures from the Coffee Board of Kenya indicate Nyanza farmers earned Sh403.5 million from the produce last season indicating the sector is picking up from a slump in the late 1990s.

Factory officials interviewed insist coffee theft involves insiders who leak information on the movement and quantity of coffee in the stores.

"These people plan for months before executing the theft. They have loads of money that they use to compromise Sacco committee members and staff at factories to get information," says Okiri Omwandho, the treasurer at Ayoro Co-operative Society in Rachuonyo District.

Presence of a ready market for the coffee in Uganda and the recent removal of roadblocks along major roads in Nyanza make the smuggling business easier. The situation is worsened by the high number of unlicensed dealers and hawkers operating in western Kenya. "The trade thrives due to a combination of factors ranging from wrangling in co-operative societies leading to sabotage and poverty that pushes farmers to sell their produce to hawkers," says Nyakangi. Eastern Nyanza Regional Commissioner Mrs Lydiah Muriuki acknowledges theft cases of coffee have been increasing in the past few months especially in Gucha District.

"Such cases have been reported in the region but we have intensified patrols and surveillance to forestall the crime. Of course some road blocks were removed but not all," says Mrs Muriuki.

Gucha DC Mathias Rioba observes that smuggling of coffee is an act of economic sabotage. "Stealing coffee from poor farmers can only be equated to economic sabotage. We shall do everything possible to stamp out the vice. Farmers should also avoid selling their coffee cheaply to hawkers as it is illegal," says Rioba. A kilogramme of parchment low-grade coffee fetches up to Sh260 in Uganda as opposed to the Sh25 to Sh40 farmers earn for the same amount in Kenya thus making the smuggling business lucrative.

Marketers say a 50 kilogramme bag of clean Kenyan coffee sells at $250 (Sh20,000) on average in the international market translating into Sh400 per kilo. Brokers and dealers in the black market fetch a higher price through smuggling the parchment coffee into Uganda before importing it into the country for milling and sale. A bulk of the coffee from the 44 co-operative societies in Nyanza is milled by Thika Coffee mills. The rest goes to other millers including Hema Coffee Mills in Kisii town.

Some prominent politicians from Kisii region have been accused of being behind the criminal syndicate.

In a recent incident, criminals attacked a watchman at a factory in Marani District and injured him seriously before stealing coffee from the drying beds. Last month, a lorry transporting 330 bags of coffee to a Kiambu-based miller allegedly disappeared at Mai Mahiu trading centre along with the loader and the driver. This incident jolted security agents into action due to the scale and unique nature of the heist. A co-operative society official who was escorting the consignment valued at Sh7 million claimed he was abandoned as he went to relieve himself at a fuel station in the township.

The lorry and the coffee are yet to be recovered in what police suspected to be ‘an inside job’. Investigations by the CID department in Gucha revealed the registration number of the vehicle did not match with the ownership records at the Kenya Revenue Authority.

The miller’s agent in Nyanza and the Sacco official have recorded statements with police.

However, the three were released and police say investigations are going on. Reliable sources indicated the truck carrying the coffee was diverted while in transit and hidden in a go down within Kisii town.

"This appears to be an organised scheme to defraud farmers of their coffee. We shall intensify our investigations to get to the bottom of this syndicate," says Gucha DCIO Hezron Mudho. Early this month, police in Gucha impounded a lorry carrying 120 bags of coffee valued at Sh1.5 million at Igare Market. Three people, including a Ugandan national, were arrested and charged in court. The lorry bore an expired insurance certificate issued by an insurance company registered in Uganda.

Another vehicle impounded by police last year illegally transporting coffee bore an insurance certificate issued in Southern Sudan. And in March, thieves broke into a store at Magena Pulping Station in Mogonga Farmers’ Co-operative Society and made away with 21 bags of coffee.

Farmers who spoke to CCI say it is hard to know who is behind the trade as they deal with brokers on the ground. "We sell mbuni (dried coffee) to brokers in the village who in turn sell it in bulk to people who come with big lorries," says Peter Osiemo, a farmer. At Igare area in Gucha where the crime is rife, farmers sell dry coffee berries to brokers who then smuggle it to Uganda. The brokers buy a two-kilogramme tin of dried coffee at Sh25 and sell it for up to Sh120 in Uganda meaning farmers lose up to Sh90 per kilogramme.

Trade Assistant Minister and Bomachoge MP Simon Ogari has asked security agencies to bust the syndicate as farmers are the ultimate losers. "These cases are systematic and well planned pointing to a possible syndicate. Security agencies should find out reasons for the sudden interest in coffee from the region. They should provide escort for coffee in transit," urges the assistant minister. In 2008, the coffee board warned that unscrupulous dealers were likely to take advantage of the premium price offers in international markets to make illegal shipments.

The board proposes a number of security measures to curb loss of coffee. "Co-operative society officials should not pack ready coffee into sacks for storage as it makes it easier to steal. They should instead pile it up on the floor," says Chemiat.