Coffee was first introduced to Kenya in 1893. With time, coffee farmers, especially white settlers saw the need to set up umbrella institutions that would offer core and essential services found to be critical in sustaining coffee production.
In order to share coffee production overheads and benefit from economies of scale, the smallholder Africa Coffee Farmers formed Coffee Growers Co-operative societies, which later led to the formation of Kenya Planters' Co-operative Union (KPCU) Ltd in 1937 at Ruiru, Kenya. The KPCU was therefore formed as a stockist company to cheaply undertake bulk purchasing and stocking of essential agricultural inputs such as fertilizers, chemicals, tools and machinery, and then resell the same to the farmers on credit basis and at affordable terms.
And to accommodate tha changing needs of the farmers, the KPCU gradually diversified its objectives, roles and functions to enable farmers improve the yields, quality and return on their coffee. This saw the company establish services such as coffee milling, extension services on coffee husbandry and provision of Short Term Credit to finance coffee production among others.
Other coffee bodies formed within the same time include the Coffee Board of Kenya to offer licensing and regulatory services and the Coffee Research Foundation to carry out research activities.
Ownership of KPCU
The KPCU is a farmers wholly owned institution, whose membership comprises of over 700,000 small scale farmers represented by over 300 Co-operatives and about 2,000 Estate farmers owning small, medium and large-scale farms. Farmers' representatives drawn from both the Coffee Co-operative Societies and Plantations therefore constitute the KPCU Board.
Out of the 15 members of the KPCU Board, 9 represent the Co-operatives while 6 represent Estate farmers. They are nominated at grass-root level and are responsible for the affairs of the organisation through resolution passed by the shareholders at the Annual General Meetings, and in accordance with the Company's Memorandum and Articles of Association.
Dual Registration
As Earlier indicated the farmers formed the main umbrella bodies to cater for the emerging needs that were considered vital for the growth of coffee industry. They then requested the Government to provide a legal framework under which the institution would operate. This led to the formulation of the Coffee Act, Cap 333 under which Coffee Board of Kenya has over the years operated.
However, due to its expanded role, the KPCU could not operate solely as a co-operative and in 1945, KPCU was therefore incorporated under the Companies Ordinance of 1933 as a Limited Liability Company and in the same year, registered under the Co-operative Societies Ordinance of 1933. This enabled the company to effectively offer the diversified services to its members who comprise of small-holder coffee growers, Co-operative Societies and large estate/plantation farmers.
The issue of dual registration was addressed by the Government in 1991 when a probe was instituted to scrutinize the KPCU's operations and come up with the restructuring recommendations. No conclusive decision was made regarding the dual registration.
