The Trust Test: Kenya's Cooperatives Need Stronger Records to Protect Farmers' Earnings

Patrick Kilemi, principal secretary in the State Department for Co-operatives, made the case in a Business Daily column on 12 October. Producer groups, he argued, need reliable buyers, current market information, finance and better processing if farmers are to run their land as businesses.

He put the number of farmers registered on the Kenya Integrated Agriculture Management Information System at about 7.5 million, and said Kenya spent about KSh 316 billion ($2.4 billion) on imports of wheat, rice, maize, sugar and edible fats and oils in 2025.

Those are the principal secretary's figures, and they point to demand that local growers could serve. They can only do so if they know what buyers want, meet quality standards and deliver on time.

Plan sales before production

A cooperative can cut the guesswork by collecting buyer orders and sharing prices, grades, quantities and delivery dates before planting. Without that, farmers may sink money into crops that are hard to sell or costly to move. A shared marketing plan also gives small producers more weight with large buyers and spreads the cost of storage, transport, testing and packaging.

Collective selling only works when members trust the scale and the paybook. A cooperative needs clear delivery records, one consistent way of calculating deductions and a documented process for settling disputes. Every member should be able to trace a payment back to the amount and grade of produce they supplied. Weak records make losses harder to spot and turn routine disagreements into lasting feuds.

A recent cooperative assessment found that producer cooperatives had limited access to current market information, according to Kilemi. The full assessment has not yet been released, so the claim cannot be checked against it. The need it describes is plain enough: farmers should know the market before they commit money and labour to a crop.

Keep accounts that members can check

The Ministry of Co-operatives' audit guidance says registered societies must keep proper accounts, arrange an audit at least once each financial year and file annual returns with audited accounts within four months of year-end. The rules let members see what the society owns, what it owes, what it has paid and whether money went where it was approved to go.

Good books record produce received from each member, sales to buyers, payments due, operating costs, stock in storage and any advances or loans. Managers should reconcile bank statements against the ledger, and the people who approve a payment should not be the only ones who check it. Boards should review overdue buyer payments and member loans, then explain big changes in the accounts at general meetings.

The money in the wider sector shows why discipline matters. The Sacco Societies Regulatory Authority's 2025 supervision report puts assets across regulated SACCOs at KSh 1.21 trillion ($9.3 billion), up from KSh 1.08 trillion ($8.3 billion) in 2024.

Deposits rose to KSh 832.74 billion ($6.4 billion) from KSh 749.43 billion ($5.8 billion), and gross loans grew to KSh 948.67 billion ($7.3 billion) from KSh 845.11 billion ($6.5 billion).

Those figures cover regulated SACCOs, not every agricultural producer cooperative, so the two groups should not be treated as the same.

As deposits and lending grow, boards must test whether borrowers can repay and whether cash will be there when members ask for it. A cooperative gets squeezed when buyer invoices go unpaid, when it borrows for projects that take years to earn, or when members' deductions are not remitted on time. A sound budget asks what happens if sales fall, the harvest is poor or costs jump, not just what happens in the best case.

Manage weather and investment risks

Farming exposes members to weather, disease, price swings and transport trouble. Depending on the crop and the place, a cooperative can use suitable insurance, water harvesting, safe storage, several buyers and staggered sales. None of that prevents every loss, but it lowers the dependence on one harvest, one buyer or one selling date.

Processing and branding can raise what members earn from each unit sold, but buildings and equipment need a credible business plan behind them. Before investing, a cooperative must know whether members can supply enough produce, whether buyers want the finished product, what running costs will be and how any loan will be repaid. Professional management and clear approval rules keep an ambitious project from draining the cash needed for day-to-day payments.

As Mwenendo earlier reported, tea factories released September pay and bonuses to farmers, a reminder of why clear payment information matters to farm households. Members need to know what they delivered, what was deducted and when the balance will land.

Mwenendo also reported on how solar milk coolers cut cooperative power bills, one example of a practical investment that protects members' margins.

Questions members should ask

Members should check whether accounts are audited on time, whether the board explains large purchases and borrowing, whether payment records match produce deliveries and whether overdue debts are disclosed. They should also ask whether the cooperative leans too heavily on one crop, buyer, lender or manager.

A strong cooperative is not simply the one with the biggest building or loan book. It is one that can show members where their money went, explain the risks it has taken and prove that sales turn into timely, fairly calculated payments. Better records cannot guarantee a good harvest or a high price, but they make avoidable losses much harder to hide.