The Impact of Neo-Colonialism on Coffee Trading Activities in Kenya

The general objective of this study was to determine how different aspects of Neo-colonialism has hindered growth of the coffee industry in Kenya( 1980-2008).The study sought Neo-colonialism effects on the coffee value chain specifically marketing, financing and production. This thesis investigated how the International Monetary Fund (IMF) sponsored liberalization programs destabilized the coffee sector in Kenya and brought to light the unseen forces in coffee value chain disadvantaging the Kenyan farmer. The study adopted the Dependency and World System theories while a conceptual framework assessed the interdependence between Neo-colonial and the key variables: production, marketing and financing. On Coffee production the study found that the producers are faced with meeting quality challenges, high production costs, technology challenges and global market volatility highly favored to developed nations. On coffee marketing, the study found that multinationals coffee firms controlled the market through domestic brokers/agents who pursue their interests leaving farmers vulnerable to unbalanced economic practices. In terms of coffee financing the study found that the liberalization policies crippled the coffee industry by promoting unfair trade practices. By financing cooperatives at a vulnerable stage when the coffee prices were at record low resulted in indebtedness of coffee farmers, weakened cooperative institutions and loss of livelihood means. The study concluded that in order for the Kenyan coffee sector to break free from foreign influences and generate sustainable rates of growth by improving the quality of governance and developing a credible set of institutions to support and execute market-friendly economic policies.