The National Coffee Cooperative Union (NCCU) is urging the government to extend the implementation deadline for the Direct Settlement System (DSS) by one year to June 2026. The DSS, introduced in August 2023, mandates that all proceeds from coffee sales be paid directly into farmers’ individual bank or SACCO accounts to enhance transparency and eliminate intermediaries.
Francis Ngone, the NCCU chairperson, has submitted a formal memorandum to the Cabinet Secretary for Co-operatives, Wycliffe Oparanya, requesting the extension. He emphasized the need for additional time to allow cooperatives to conduct data clean-up, facilitate the opening of bank and SACCO accounts for all farmers, and improve farmers’ financial literacy, especially in rural and marginalized areas where access to financial services remains limited.
“Many farmers still lack access to formal financial systems. A rushed implementation of the DSS risks leaving out a significant number of them from accessing their rightful earnings,” said Ngone in a statement. He added that extending the deadline would ensure a smoother and more inclusive rollout of the payment system.
Ngone further called for measures to safeguard the integrity of the DSS, cautioning against potential political interference. “The DSS should remain a transparent, farmer-centric platform, free from vested political interests,” he noted.
The NCCU is also pushing for a comprehensive review of the current coffee levy structure. Presently, marketing levies are allocated to several stakeholders, including coffee brokers, the Capital Markets Authority (CMA), Nairobi Coffee Exchange (NCE), and the DSS itself. The union argues that the current levy framework may be eating into farmers’ earnings and wants a more transparent system where proceeds are clearly directed towards services that directly benefit farmers.
The call for reforms comes amid broader efforts to revive Kenya’s coffee sector, which has suffered from years of mismanagement and dwindling returns. The NCCU maintains that for reforms like DSS to succeed, adequate groundwork, including proper financial inclusion and equitable revenue allocation, is essential.
As discussions between cooperatives and government continue, stakeholders hope that the government will consider the union’s proposals to ensure that no farmer is left behind in the reform process.
