Nairobi, Dec. 21 - The Kenyan government said it has released 300 million shillings ($4.8 million) it owes coffee farmers via the national Coffee Board of Kenya.
Kenya's coffee sector, which at one point produced its highest ever output of 130,000 tonnes in the 1987/88 crop year, has been recovering in the past four years following reforms to reverse almost 20 years of decay.
Among impediments farmers had faced were huge debts -- some owed by the state coffee board, others due to borrowing at times of poor earnings and high production costs.
"Coffee farmers are hereby advised that the Board has received the first tranche of 300 shillings from government to settle part of ... outstanding payments," the Ministry of Agriculture said in a statement late on Thursday.
Since coming to power in late 2002, President Mwai Kibaki's government has written off a 5.3 billion shilling debt owed by cooperative societies and launched plans to provide 3.5 billion shillings for credit to buy farm equipment or inputs.
While not a big producer, Kenya is renowned worldwide for its high quality arabica coffee grown mostly around Mount Kenya and favoured by roasters who blend it with beans from other origins.
($1=62.45 Kenyan Shilling)