COFFEE (GENERAL) REGULATIONS, 2015
ARRANGEMENT OF REGULATIONS
Part I: Preliminary
1— Citation
2— Interpretation
3—Scope and purpose
4— Application
Part II: Functions of the Directorate
5— Functions and powers of the directorate
Part III: Registration and Licensing
6—Registration
7— Application for a license
8— Prohibition to operate without a license
9— Authorization by county governments
10— Authorization by the Authority
11— Limitation of a trader’s license
12— Conditions of a licensee
13— Licensing Procedure
14— Movement permits
Part IV: Coffee production and primary processing
15— Notification after planting or uprooting coffee
16— Notification after change of name of farm
17— Coffee production and processing standards
18— Specialty coffee
19— Certification of coffee
20— Prohibition to issue certified coffee seeds or seedlings
Part V: Coffee milling
21— Requirements relating to coffee milling
Part VI: Coffee trade and marketing
22— Coffee marketing
23— Ownership of the Nairobi Coffee Exchange
24— Management of Nairobi Coffee Exchange
25—Nomination of the Exchange Committee
26— Authorized participants on the trading floor
27— Marketing agency agreement
28— Classification of samples
29— Submission of bank guarantee
30 — Obligations of the coffee marketing agent
31— Maintenance of audited books of accounts
32— Insurance and prudence
33— Direct sales
34— Coffee promotions
35— Coffee warehousing in designated warehouses
36— Export and import of coffee
37— Prohibition against blending
38— Purchaser certificate
39— Exemptions
Part VII: Coffee levies
40— Applicable levy
40— Application of levy
42 License fees
Part VIII: Quality assurance
43— Quality Assurance for coffee industry
Part IX: Inspection and Compliance
44— Appointment of inspectors
45— Prohibition against removal of labels, seals etc
46— Survellance
Part IX: General Provisions
47— Arbitration
48— General penalty
Schedules
FIRST — Licensing Requirements
SECOND— Milling Agreement
THIRD—Coffee Standards
FOURTH—Marketing Agreement
FIFTH—Sale Catalogue
SIXTH—Direct Sale Contract
SEVENTH—Notice of appointment of a Marketing Agents
EIGHTH—Particulars of deductions
NINTH—Tripartite
TENTH—deed of Guarantee
IN EXERCISE of the powers conferred by Section 40 of the Crops Act,2013 the Cabinet Secretary, in consultation with the Authority, makes the following rules—PART I-PRELIMINARY
Citation and commencement / 1. These rules may be cited as the Coffee (General) Rules, 2015 and shall commence on such a date as the Cabinet Secretary may prescribe.
Interpretation / 2. In these rules, unless the context otherwise requires-
“Act” means the Crops Act, 2013;
“ad valorem levy” means a percentage of the gross sales of all clean coffee sold by the marketing agent or a grower marketer involved in direct sales or roasting of own coffee;
“auction” means the auction system under which coffee is offered for sale at the Nairobi Coffee Exchange;
“Authority” means the Agricultural, Fisheries and Food Authority(AFFA) established under Section 3 of the Agricultural, Fisheries and Food Authority Act, 2013;
“board;” means the Board of the Agriculture ,Fisheries and Food Authority
“buni” means dried coffee in the fruit or cherry but does not include hulled buni;
“Cabinet Secretary” means the Secretary for the time being responsible for the Ministry of Agriculture, Fisheries and Livestock;
“Certified coffees” means coffees produced under tenets of a recognized certification scheme bearing a certification mark.
“coffee” means the plant botanically known as Coffea species (L.) and includes the fruit, whether on the plant or detached therefrom, the seed in form of either buni, parchment coffee, clean coffee, roasted beans or ground coffee;
"coffee association" means a registered group comprised of coffee growers (co-operatives or estates), coffee unions, coffee millers, marketing agents, traders, or roasters which has been registered by the Directorate and given a registration certificate;
"coffee branding’’ means the identification of coffees by defined characteristics, a specific name and/or origin;
“coffee buyer” means an overseas person engaged in buying clean or roasted coffee from a coffee trader or grower marketer for the export market;
"coffee certification" means a system that distinguishes a coffee product as being sustainably grown on the basis of economic viability, environmental conservation, social responsibility and ensures traceability;
"coffee miller” means a person licensed by the Authority in consultation with the county government to conduct the business of dry coffee milling;
“Coffee milling” means mechanical hulling or de-husking of parchment or buni coffee and includes the polishing and grading of the clean coffee;
"coffee estate” means any large area of land or group of parcels of land under the same ownership on which coffee is grown and shall not be less than one hectares; provided farmers located beyond 5kms from the nearest co-operative society may be considered for a Pulping station licence and shall be registered by county governments
“coffee management agent” means any person, registered by the Authority in consultation with the host county government to manage a grower(s) farm(s) as specified in the terms and conditions of the certificate and shall be appointed annually through a specific agreement by a grower;
“coffee marketing agent” means a person licensed by the Authority in consultation with the host county government, to market clean coffee, at the Nairobi Coffee Exchange at a fee and shall be appointed annually by a grower through a specific agreement;
"coffee sales proceeds" means monetary consideration received in exchange for coffee purchased at the auction or through direct sales;
“coffee roaster” means a person who roasts coffee for local sale or for the export market;
“co-operative society” means a coffee farmers co-operative society registered under the Co-operative Societies Act and licensed by the County Government, as a coffee grower;
"coffee Standards'' means the Kenya Coffee Standards formulated by the Authority in consultation with the coffee industry and registered by the Kenya Bureau of Standards;
“coffee Warrant” means an instrument prepared by a licensed marketing agent and the person named therein, or the last endorsee thereof, named in the endorsement to the coffee specified therein and the coffee so specified shall for all purposes be deemed to be his property;
"coffee year" means a period of twelve months beginning 1st October of a year and ending 30th September the following year;
“County government” as defined under Chapter 11 Article 176 of the constitution of Kenya 2010
“dealing in coffee” has the same meaning as conferred to it by the Crops Act, 2013;
"direct sale" means contractual agreement between the grower marketer, commercial marketing agent, and a buyer located outside Kenya for the sale of clean coffee based on mutually accepted terms and conditions enforceable in law and registered by the Authority;
"grower" means any person who cultivates coffee in Kenya and is registered with the County Government and includes a co-operative society, co-operative union, registered company or a coffee estate owner;
"grower marketer" means a grower who is licensed to market or roast his or her own coffee;
"inspector” an officer of the Authority or a county agricultural officer appointed in writing by the Authority or County Government by a notice in the Gazette as an inspector for purposes of the Rules;
“Licensing Authority” shall be construed according to the definition under Part 1- Preliminary section of the Crops Act, 2013
"marketing agency contract" means a contract between a grower and a marketing agent which specifies the powers and functions to be exercised or performed by the agent on behalf of the grower;
“marketing of coffee” means identification of competitive prices and facilitation of transactions relating to selling coffee;
"milling statement" means a statement prepared by a miller as prescribed under the Fourth schedule Form D5 of the Coffee (Forms) Rules;
''out-turn'' means a record of coffee delivered to the mill ;
''out-turn statement'' means a statement prepared by a marketing agent upon sale of coffee
“private miller” means a person who mills parchment or buni coffee from his or its own coffee estate;
“primary processing” means the process of removal of coffee pulp from cherry, fermentation, washing and drying to the desired moisture content to obtain parchment;
''prompt date'' means a date specified in the sales catalogue and shall not be more than seven calendar days from the date of the sale on which coffee sales proceeds are to be received by a marketing agent from the Traders;
“pulping station” means a coffee factory or place where coffee cherry is processed into parchment coffee;
“sweepings” means the balance of coffee samples in the sample room not distributed as samples to the Traders and spillages collected from millers’ milling activities which shall be handed over to the marketing agents for sale, provided the proceeds accruing shall be paid to growers on pro-rata basis;
"sales catalogue" means a standard document prescribed by the Authority and prepared by a marketing agent for sale of clean coffee at the Nairobi Coffee Exchange as set out under Twelfth Schedule;
“sale” includes offering clean coffee for sale but does not include sale of cherry, buni or parchment coffee;
"sales contract" means sale agreement between a grower marketer and a coffee buyer;
“smallholder” means a farmer cultivating coffee in a parcel or in parcels of land who does not possess his own pulping station and is registered with a co-operative society;
''specialty coffee'' means mild Arabica or Robusta coffee which possesses unique characteristics as defined by the buyer;
“trader” means a person who or which buys clean coffee at the auction for export and/ or roasting or imports coffee for local sale or re-export;
“trading Floor” means the physical space and all the facilities including; equipment, records and assets provided by or belonging to or in the use of the Exchange for purposes of coffee auction;
“warehouse” means a designed storage facility for coffee, specifically designed to guarantee the quality and safety of coffee;
“warehouseman” means any person who or which manages his or its own or a leased warehouse where coffee is handled and stored for reward or profit;
"Warehousing Receipts” means certificates issued by the coffee marketing agent in respect of coffee stored in licensed warehouses for the purposes of collaterals.
Scope and purpose of the regulations / 3. The purpose of these regulations is to provide guidelines on the promotion, development and the regulation of the Coffee Industry.
They also provide for—
a) Conditions for registration and licencing
b) Contracts between players in the coffee industry
c) Compliance with quality standards, Statutory provisions and other procedures
d) Imposition of levies
e) Such other matters as may be deemed necessary for effecting these Regulations
Application / 4. These Regulations shall be applicable to the Coffee industry in Kenya.
PART II- FUNCTIONS OF THE COFFEE DIRECTORATE
Functions of the Directorate / 5. (1) The Directorate shall carry out such activities and do such things as are necessary to promote, develop and regulate the Coffee industry for the benefit of Coffee growers and the Coffee industry.
(2) In consultation with the respective county governments the Directorate shall—
(a) facilitate the issuance of Coffee tradeand manufacturing Licenses in consultation with county governments provided such licences shall include management agents, millers, marketers, warehousemen, and dealers;
(b) Conduct training programs aimed at capacity building county officers towards enhancing their knowledge and skills in Coffee production, processing technology, market potentials and prospects for various types of Coffee;
(c) enforce national regulations and quality standards in the coffee industry
(d) Collect, collate and maintain information and data base on the coffee industry including current and future production, processing, marketing and consumption;
(e) conduct market intelligence and promotion activities on Coffee both locally and internationally;
(f) establish linkages with various government agencies including county government and private research institutions for the conduct of studies and researches designed to promote the production, marketing, processing and consumption of Coffee;
(g) develop and promote strategies and initiatives for value addition;
(h) Promote the application of the National Coffee Kenya Mark of Origin by local and international industry players.
(i) recommend general industry agreements between coffee farmers and manufacturers ;
(j) develop regional appellations for Kenyan Coffee
(3) Without prejudice to the generality of paragraph (1) the Directorate shall—
(a) in consultation with the Ministry responsible for Agriculture, facilitate formulation of general and specific policies for the development of the Coffee sub-sector;
(b) advise the Board and stakeholders on coffee matters
(c) facilitate the marketing of Coffee through issuance of relevant trade documents, monitoring and dissemination of market information both locally and internationally;
(d) co-ordinate matters of international protocols and conventions as well as represent the Government in international for a in matters pertaining to coffee industry;
(e) regulate all aspects of Coffee trade and registration of all persons dealing in Coffee;
(f) develop guidelines to promote the production, processing, marketing, grading, blending, labeling, storage, collection and warehousing of Coffee.
(g) to capacity build and provide technical assistance to the County Governments and other relevant stakeholders ;
(h) in collaboration with the Kenya Bureau of standards, develop national coffee standards.
(i) develop enforcement rules and regulations for the coffee industry;
(j) monitor implementation of regulations and quality control standards;
(k) Collect and administer any levies that shall be imposed by the Cabinet Secretary with respect to coffee
(l) perform any other relevant function with respect to Coffee including the taking of measures to ensure compliance with the Agriculture and Food Authority Act and the Crops Act.
PART III- REGISTRATION AND LICENCING
Registration / 6. (a) Every smallholder coffee grower may register with the co-operative society to which the person delivers coffee.
(b) The county governments in coffee growing areas shall maintain up to date register of all coffee co-operatives societies, coffee associations, coffee estates and nursery operators and such registers shall be shared with the Authority.
(c) Every person dealing in coffee (millers, marketing agents, traders, roasters shall apply for registration with the Authority using form as prescribed in Coffee (Forms) Rules, 2015 and shall be issued with a Registration Number.
(d) The Authority shall maintain an up dated register of all coffee dealers
(e) Every coffee dealer shall produce the registration certificate upon the registration at the request of an inspector at all reasonable times