The Rules and Regulations required to govern the Kshs. 3 Billion Cherry Advance Revolving Fund established by the Kenyan Government have now been approved by Cabinet and Published in the Kenya Gazette.
Stakeholders in the coffee sub-sector and members of the public in general are invited to submit written comments and feedback by 15th January 2020 to enable the roll-out of the funds. The regulations will be known as “The Public Finance Management (Coffee Cherry Advance Revolving Fund) Regulations, 2019”
Below are some highlights of the regulations
Eligibility
A person shall be eligible to benefit from the Fund if that person is ─
(a) a citizen of Kenya; and
(b) a member of a registered coffee co-operative society; or
(c) a smallholder coffee estate, who is affiliated to New Kenya Planters Co-operative Union.
In addition to the eligibility criteria set out above, a person desirous of accessing the monies in the Fund shall apply for the coffee advance and meet the following conditions─
(a) in the case of a member of a registered coffee co-operative society, have─
(i) a national identity card or passport; and
(ii) a membership card of a co-operative society;
(b) in the case of a smallholder estate, who is affiliated to New Kenya Planters Co-operative Union, have─
(i) a national identity card or passport; and
(ii) a membership card of the New Kenya Planters Co-operative Union.
Upon receipt of an application the Administrator shall evaluate the application to ensure compliance with these Regulations and coffee advance evaluation procedures approved by the Board. The Administrator shall, after evaluation of the application, make recommendation to the Board to either approve or reject the application.
Where the Board rejects an application, the Board shall give reasons for such decision within fourteen days of such decision. An applicant whose application has been rejected may resubmit the application upon fulfillment of the requirements set in these Regulations. Any decision of the Board shall be communicated to the applicant within fourteen days from the date of Board decision. Any applicant who is dissatisfied with the decision of the Board to reject his application for a coffee advance may apply to the Board for review of the decision.
Coffee advance payment rate
A member of a registered cooperative society or a smallholder estate affiliated to New Kenya Planters Co-operative Union shall be advanced─
a) forty per-centum of the prevailing average sales price at the Coffee Exchange;
(b) twenty shillings per kilogram of cherry delivered; and
(c) forty per-centum of the payment rates to members by a cooperative society for the immediate past crop year.
The Board may recommend a review of the rates under this regulation from time to time to the Cabinet Secretary.
Coffee advance disbursement procedure
The Board shall also develop the procedures for disbursement of approved coffee advances under these Regulations.
The Administrator shall inform─
(a) the applicant; and
(b) the registered coffee co-operative society, of approved coffee advances of successful applicants under them within fourteen days from the date of approval.
Administration cost and Recovery
Any coffee advance shall attract an administration cost of three per centum of each amount advanced. The administration cost shall be met by the applicant and be deducted from the coffee advance.
The Board shall develop procedures for recovery of coffee advances. The Board may appoint agents for purposes of recovery of the coffee advances in accordance with the procedures developed.
- The coffee advance shall be a first charge on the applicant’s sale proceeds for coffee.
- The applicant may repay the coffee advance through alternative sources of income in accordance with the procedures developed
- Notwithstanding the above, the coffee advance shall be recovered after the sale of coffee.
The feedback can be sent via email to coffeecherryfund@industrialization.go.ke or coffeecherryfund@gmail.com
The regulations can also be downloaded at http://industrialization.go.ke/images/downloads/Legal_Notice_no_201._Public_Finance_Management_Act_Coffee_Cherry.pdf
