According to a new study by Scaled Impact, East African coffee farmers' income is shaped more by how the market functions than by production practices alone. Photo credit: Scaled Impact
Despite having a reputation for growing high-quality arabica and commanding higher prices, Kenyan coffee production has declined over the last few years, while neighboring Uganda has become the second-largest coffee producer in Africa, with its farmers earning a greater share of export value. A new study conducted by Scaled Impact assesses how value is created and distributed across the East African coffee value chain and identifies what actually drives increases in farmer income and production.
Small-Scale Operations Drive Production
Smallholder farms produce the majority of coffee in both countries. Uganda has about 1.8 to 2.5 million small-scale farms, and Kenya has around 3,000 large coffee estates and 800,000 smaller operations. Uganda is one of the few regions in Africa that produces more robusta (80%) than arabica (20%); Kenya focuses almost entirely on arabica (99%).
The average annual revenue is $600 for arabica farmers in both countries and $310 for Ugandan robusta producers. Between 2024 and 2025, Uganda produced about 450,000 metric tons of coffee, 33% of total East African coffee production, compared with Kenya’s 45,000 metric tons (4%).
Centralised Vs. Liberalised Systems
The majority of Kenya’s farms are organized into cooperatives that sell around 90% of their coffee through the Nairobi Coffee Exchange (NCE). Cherries from individual farms get mixed together during processing and are sold in group lots, making it impossible to trace quality back to the farm level. Payments are often delayed for up to seven months, forcing coffee farmers in Kenya to rely heavily on credit and high-interest loans to cover harvest labor and production costs.
Uganda liberalised its coffee sector in the early 90s, allowing farmers to deal and sell directly to competing buyers. This gives them instant feedback on quality and market preferences from the buyers, rewarding those farmers who pay extra attention to quality during the growing and harvesting processes. Receiving immediate payments creates liquidity and gives Uganda farmers the freedom to adjust or invest in new production techniques mid-season.
Capturing More Export Value
The report states that “Kenyan Arabica commands higher prices per kilogram on average, yet farmers capture a smaller share of export value compared to their Ugandan counterparts. In Kenya, sales routes are the strongest determinant of income differences.”
Comparing the national Free on Board (FOB) prices for both countries shows that, despite Kenya’s higher prices, farmers there capture about 66% of the FOB price, compared to 82% in Uganda. This indicates that Uganda’s direct-to-market structure gives its farmers a larger portion of the final export value and demonstrates that market organization has a greater impact than agricultural practices.
In an interview with STiR Coffee and Tea, Manisha Mathai, an associate at Scaled Impact, emphasises the key takeaways from the study. “The central conclusion is that farmer income is shaped more by how the market functions than by production practices alone.”
Donor and development funding in the coffee sector often focuses on training, best agricultural practices, and compliance support, but this doesn’t lead to higher income for the farmers. “Additional training tends to repeat existing knowledge and has little impact on the price farmers receive or their access to higher value markets,” adds Mathai. “What instead drives outcomes are structural constraints within the system.”
Next Steps
The key takeaways from this study can inform the development of new methods and actions to improve farmers' incomes and increase coffee production in East Africa. Developing a forward financing instrument would address liquidity constraints at harvest, while introducing more direct buying channels would increase market access and provide feedback loops. Easier access to information on pricing, quality, and market demand would also benefit farmers by enabling them to make informed decisions more quickly.