Proposal to abolish auctions alarms coffee, tea traders Benson Kathuri and Patrick Mathangani

By: Contributor(s): Series: Financial JournalPublication details: Nairobi The Standard Group Tuesday, June 2, 2009Description: p.15 [The Financial Journal] The Standard, June 2, 2009Subject(s): Summary: A major showdown is looming between the Ministry of Agriculture and traders of coffee and tea over the proposal to close auctions in December. The traders have vowed to resist any attempt by the ministry to scrap the auctions in Nairobi and Mombasa, arguing that they are private entities and not state agencies. Mr. Ruto says that coffee and tea auctions will be disbanded by December because they are being used as a conduit to exploit farmers. The move, he says, will create wealth, encourage farmers to take care of their crops as well as create employment. The 53 year old Mombasa Tea Auction is the largest in the word that sells tea produced in East, South and Central Africa regions. Coffee production has been on a decline despite improved prices in global market due to high cost of production and corruption in local coffee and cooperative societies. there is suspicion that some buyers have formed cartels to fix the prices at the auctions, but farmers are poorly represented.
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A major showdown is looming between the Ministry of Agriculture and traders of coffee and tea over the proposal to close auctions in December.

The traders have vowed to resist any attempt by the ministry to scrap the auctions in Nairobi and Mombasa, arguing that they are private entities and not state agencies. Mr. Ruto says that coffee and tea auctions will be disbanded by December because they are being used as a conduit to exploit farmers. The move, he says, will create wealth, encourage farmers to take care of their crops as well as create employment.
The 53 year old Mombasa Tea Auction is the largest in the word that sells tea produced in East, South and Central Africa regions. Coffee production has been on a decline despite improved prices in global market due to high cost of production and corruption in local coffee and cooperative societies.
there is suspicion that some buyers have formed cartels to fix the prices at the auctions, but farmers are poorly represented.

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