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Citizen Weekly

Sunday, 16 November 2014

BUNGOMA COFFEE FARMERS DIG UP ROAD TO BLOCK BROKERS

Coffee farmers at the  Nakoyonjo Cooperative Society in Kabuchai sub- county  one of the oldest  societies, in the populous    Bungoma county, have cried foul  over  rampant corruption, fraud and theft  of members’  funds  which has  led to the loss of millions of shillings and  which is  now  threatening the future of coffee farming in the region.
The farmers are now  pointing an accusing  finger  at the Bungoma county government  for doing little  or nothing to  assist them  and have  moved to block  the  sale of their coffee beans ready  for the market which  they claim  top officials of the  of  embattled management committee attempted  to market through  some middle men and in a suspicious  manner.
 In an interview with this writer, three  of the farmers Fred Kituyi,  David Sikoko and Patrick Misiko  said that  500 bags of  ready  beans for  market  valued at  about  Sh12 million  was under threat after the  farmers discovered that  the society’s management had unilaterally received  over  Sh3 million from middle men coffee  marketers without  involving the farmers.
In a defiant  move, the  farmers have now  dug a trench  across  the road leading to their coffee store at Nakoyonjo in order to block officials of the society from transporting  coffee beans given the fact that  they have already received  advance payment from the suspicious  brokers against the will of the  members of the society and in total contravention of the coffee society’s own rules  co-operative  Act. The farmers are also appealing to Ethics and Anti-Corruption Commission to step in and apprehend the offending top officials of the society.
According to  farmers, the stalemate at Nakoyonjo  remains unresolved largely due  to the  inaction  of the Bungoma  county  government which  they  claimed  has in  its possession  an audit report  in which details of the malpractices  are exposed  and now suspect complicity of  some  government officials  charged with the responsibility  of supervising  the co-operative society but seem to be looking  aside as society funds are being plundered by the unscrupulous officials.
“The plight  of  Nakoyonjo farmers  has  been made worse and  their expectations dashed  after  the governor  sent auditors  to the society but  seems to show no interest  after the auditors presented  a very damning  report about the activities of the top officials whom the members are  blaming for the society’s current woes. It  was our  belief  that  following the release of the auditor’s report, the  office of the governor  would have taken definite and urgent  steps to  salvage  farmers and particularly so as  to  end the continued  theft of  members’  funds at the society  which  has not  been the case,” added the  apparently offended coffee farmer.
The farmers are up in arms against  the  management  whom they blame  for continuously running down their society and whose  removal  they demanded during a  an explosive  meeting  with Governor  Lusaka, area MP  Lusweti Mukwe  in June  this year during which  time, the farmers  expressed their  displeasure of the inept management  of the society  and  demanded the immediate removal  of  the management team  headed by  chairman Jacob  Chemei, secretary Joseph Muhuyi and CEO Joseph Wanyonyi among other  top officials  of the society. The embattled officials are being protected by an aspirant, Moses Sudi, come 2017. Sudi is an employee of Kenya Wine Agency Limited and is expected to oppose Mukwe. He boasts of financing Ford Kenya boss Moses Wetang’ula. One of the society officials is Sudi’s relative.
While members of Nakoyonjo expect swift action  from the governor  and  his executive  for agriculture,  livestock  and cooperative to  turn around  their dwindling  fortunes, they were obviously taken aback by the county government’s  inaction which has resulted in further sliding of the society.
Besides, the members are concerned that their coffee beans which are ready for market are in risk of being stolen by the same officials as security in the area is poor.
The problems at Nakayonjo Coffee Cooperative have attracted the attention of the chairperson of the People Against Corruption in Bungoma county Enos Walinywa who said in a hard hitting statement before the protesting farmers at the society that the only way to salvage coffee farming in Bungoma is for anti-corruption agents to probe the county coffee unions, the central government and Bungoma county officials responsible for the mess.
Meanwhile, an audit at Nakoyonjo Farmers Cooperative Society in Kabuchai sub county has established that it posted accumulated losses amounting to Sh12,355,279 between 2010 and 2013. Its debtors owe Sh6,988,254 while its creditors were demanding Sh5,730,494 as at May 31 this year.
The society  was set up in 1958  with 3,460 members out of whom only 1,681 are active, and has no supervisory committee in place  as it has a negative working capital of Sh2,517,235  since  its liabilities stood at Sh12,883,728 against its assets  of Sh10,366,493
“Negative working capital represents bad liquidity position of the society since it would be unable to meet its short term obligations,” the auditor said.
The inspection report by the Bungoma county director of cooperative audit Philip Oundo says that longterm borrowings increased from Sh2,620,600 in 2012 to Sh4,133,333 in 2013 whereas its share capital remained stagnant between 2010 and 2012 only to increase by Sh40,920 in 2013. The society’s total investments are valued at Sh1,157,386 but it had no investment register as required, the auditor reported.
According to the report that was due to be presented to Lusaka  by agriculture, livestock, fisheries and cooperatives executive Patrick Koyi, the society’s fixed assets value rose from Sh20,767,324 in 2012 to Sh28,838,136 as per the valuation done by CMT Realtors registered valuers on an open market basis.
It was found out that the society owes its workers Sh3,948,990 dating back to July 2012 and had applied for three loans from the Cooperative Bank of Kenya amounting to Sh8,300,000
Oundo carried out the inspection between June 19 and July 18 this year after irate coffee farmers demanded the immediate removal of the entire management team over allegations that it has misappropriated more than Sh12million from their earnings.
Their representatives told  Lusaka and Mukwe during an explosive meeting at the factory on June 17 that they had lost confidence in the management team chaired by Jacob Chemei that includes secretary manager Joseph Muhuyi, secretary Bramwel Muhuyi and treasurer Martin Nandelenga.
Others cited for removal were vice chair Francis Ndukuri and members Benson Nimo, Justine Marauni, Edward Juma, Peter Mundaa, Peter Lumbasi and CEO Joseph Wanyonyi.
All members of the management team did not show up for the crisis meeting attended by the governor and the MP then amid allegations they had taken off with the society’s computers and financial records.
It emerged then that workers were in arrears of 22 months salaries yet the society had deducted Sh5.5 million from coffee sales for that purpose and that Sh2.4 million had been deducted from the farmers out of which only Sh500,000 was remitted to the union.
The auditor observed that there was an increase in cherry production from 450,055kg in 2010 to 433,659 in 2012 followed by an increase in 2014 from 499,802kg to 710,983kg. Coffee sales rose to sh30, 438,184 in 2014 from 20,477,073 in 2013 as production costs dipped to Sh606,450 in 2014 from Sh5, 903,397 in 2013 while marketing costs increased from Sh2,230,985 in 2013 to Sh3,767,618 in 2014.
The inspection report indicates that payments to farmers increased to Sh20,166,659 in 2014 from Sh14,994,060 in 2013. “Although there was an increase in payment to farmers, it only represented 77pc of the net realisable amounts compared to 2103 when the rate of payment was 121pc,” the auditor noted.
The auditor spelt out a raft of recommendations for implementation so that the society could realise its  potential. This include maintenance of monthly trial balances, adherence to budgetary provisions, collection of outstanding debts, streamlining of procurement and tendering processes as well as strike an ethnic balance between Teso, Sabaot and Bukusu at the board level and among the delegates.