Tanzania: Coffee could make farmers rich if...

By Damian Salla
Tanzania Daily News (Dar es Salaam)

Published on March 28, 2012

Coffee could fetch Tanzania an income, worth over US$ 200 million - (T. Shs 300 billion) in foreign exchange annually, through the implementation of a comprehensive grass-root based intervention mapped out in the ten year national coffee development strategy.

Capturing the country's enormous productive coffee potential, the strategy outlines (in meticulous detail) five objectives which, could transform the ailing coffee industry into a long term profitable business entity.

According to Engineer Adolph Kumburu, Tanzania Coffee Board's (TCB) Director General, production of coffee has stagnated at 50,000 metric tonnes a year over the last three decades, despite vast opportunities which, include large tracts of volcanic soils suitable for high quality coffee farming. Tanzania has 4.8 million ha of land suitable for coffee farming, of which only 200,000 ha (some 35%) is utilised.

Accordingly, Tanzania is not fully utilised its huge market advantage as compared to other countries that produce the coveted Colombian mild Arabica coffee and the Bukoba Robusta the latter is now considered one of the world's top quality robustas, he added.

More than 95 per cent of Tanzania's coffee is exported where minimum standards are not only very high, but the intricate system of international market policies and commodity prices are dictated.

A steadily growing coffee economy in Tanzania in the 60s and 70s provided cause and justification for the construction of the multimillion Mbinga and Mbozi Coffee Curing Companies Ltd (in the 1980's) which doubled the country's curing capacity.

Then came the liberalisation in 1994 which, ushered in a mushroom of new technology generation coffee curing plants, heightening tthe country's curing capacity to well beyond 120,000 mts, i.e. over 70,000 mts in suspended coffee curing capacity, as the country continued to struggle with production at 50,000mts a year.

Ironically, the positive developments of the yester years notwithstanding, the culture of a healthy government presence, which may have contributed much to the sector's success, was abandoned. Since then coffee production stumbled, giving way to prolonged stagnation at 50,000 mts annually. Government could [and] should take a leaf from the 60's and 70's to revamp the coffee industry. (Tani)

The healthy trends of the 60's and 70's stalled, as the average production declined to 49,700 mts per year between 1985 - 1994 and stagnated up to 2011 last year. The strong unity of purpose and cooperation, mirrored through the 60's and 70's, which had detailed government attention is more needed now, than then.

The 10 year strategy was conceived in the wake of the "Kilimo Kwanza" campaign i.e. 'Agriculture First'. It aims at driving a 50 per cent increase in coffee production to 80,000 metric tonnes a year by 2016, and peaking to 100,000 metric tonnes by 2021. The envisaged increase shall go hand in hand with an increase in quality from the current 35 per cent premium coffee, to at least 70 per cent of the total national coffee production.

The strategy seeks to boost output by; intensifying current management through improved pruning, rejuvenating old coffee trees by stumping and grafting with improved new varieties and to encourage application of appropriate fertilizers, in tandem with; replanting, gap filling and expansion, hand in gloves with the Tanzania Coffee research Institute (TaCR seedlings multiplication programme.

The success of this crucial stage will require a strong input from TaCRI in producing about 20 million new seedlings. TCB needs to popularise the scheme by supporting TaCRI and small scale farmers in tilling new land.

Technology transfer needs to be disseminated to farmers by the intensification of research on productive coffee practices and by training extension staff who will in turn train coffee farmers in village based farmer groups.

Coffee pulping is a value addition stage which extends employment opportunities and incomes to small scale farmers. At this stage, there should be a provision for allowing private business hands, only to the extent of providing orientation and experience to the small scale farmers.

Lately, environmental concerns and consumer sensitivity to food safety across the world have slapped the coffee industry with new costly standards requirements, the compliance of which is the only guarantee for our enduring and credible presence in the market.

Around 20 per cent of the coffee in the world market is now certified and the new phenomenon will engulf the entire market, sooner than later. Over the last ten years, Tanzania, with support from international standards and certification organisations, such as the Fair-trade International, UTZ, 4C, Rainforest Alliance and Café Practice, has complied, but producers - the mainstay of the programme, need to be empowered to maintain sustainability.

Tanzania, has partnered with other member African, Caribbean and Pacific Countries (ACPC) into pushing for a fair international pricing system in a resolve to boost producer incomes.

In a bid to enhance marketability and competitiveness of our coffee, Tanzania cooperates with other countries under the umbrella of the Eastern Africa Fine Coffees Association - EAFCA, with a shared vision of improving the quality of life through the quality of coffee.

The Association has increased the region's coffee share of the USA market by 6 per cent, replacing the South American coffee. Tanzanian coffee has been successfully promoted in Japan in collaboration with the Specialty Coffee Association of Japan - SCAJ and JETRO through joint trade and market expansion, market linkages, trade missions and promotion through conferences and exhibitions.

Tanzania is a member to the International Coffee Organization, formed in 1963 under the auspices of the United Nations to serve the International coffee community through the provision of information and statistics, innovating projects which benefit the world coffee economy, coffee quality improvement programmes, provision of market reports and economic studies, consultations on coffee sector finance developing consumption through market development activities and seminars.

Succeeding coffee economies are known to have solid cultures of local consumption. Brazil, the world's number one producer, is also its second best coffee consumer, slightly trailing the U.S.A, Brazil looks certain to overtake sooner than later.

Ethiopia, arguably, Africa's fastest growing coffee economy, consumes 50 per cent of its coffee. Prices fetched at the local markets remain stable for longer periods and almost unaffected by price swings in the international market where fluctuations are regular, thereby shielding the industry and the national economy from recurrent losses of income.

Capitalising on the positive outlook on the domestic coffee consumption market, stakeholders can and should work with the TCB in promoting and encouraging initiatives to boost the practice for a strong way forward in improving our coffee business fortunes.

The availability of 4.8 million ha suitable for coffee farming, in Tanzania (of which only 200,000 ha are utilised so far, and with productivity at 250 gms /ha (average small-holders' clean coffee production presents wide room for Tanzania to become a giant coffee producer.

Edwin Mtei, the first indigenous Governor of the Central Bank of Tanzania, former finance minister and one time Secretary General of the East African Community, recently remarked that Tanzania needs to escape from the resource curse found Latin American countries particularly Argentina.

Tanzania should list its land as a valuable resource, costing it accordingly to its deserved value so that it can deliver more appropriately through a properly and fairly calculated rent. "The reason that God had placed Tanzanians in this resource rich part of the planet was to enable them (wananchi) to maximise the benefit from it,"Mtei said, adding that it was upon the government to create an enabling environment, attractive to both investors but remaining as much as possible, socially friendly.

Another veteran who chose to remain anonymous observed that the Tanzania coffee business system was such ambiguous that presented the government with a telling challenge that very much compromised the government's coffee tax revenue collection.

He observed that owners of most of the coffee plantations were also the licensed coffee businesses, (farmgate purchasing, processing, exporting and roasting -under different names) thereby allowing loopholes for underdeclaration at the point of coffee auctioning. Noting that the remedy could be through a proper land tax.

Other industry analysts have expressed worries that the strategy's speculation of 100,000 mts in ten years as a too ambitious target to achieve, and have instead considered 80,000 mts as more of a realistic forecast, while others believe that even the estimated 100,000 mts might be a little conservative, should the productive forces be aligned properly, in view of the existing opportunities.

However, in the final analysis, it is the stakeholders who will have the final say on the success of the industry, having worked so carefully to produce such an elaborate strategy. Patience with an outlook of optimism will provide the final the long awaited positive change in the coffee industry.

And with the government pledge of T. Shs 2 billion/= in coffee inputs subsidy and providing nearly 100 per cent subvention in TCB running costs, the stakeholders only need to wear a winning outlook to push Tanzania to a breakthrough to converting our coffee into a giant and sustainable reservoir of a rewarding business machine.

In the meantime TCB, in cooperation with TaCRI supported by other stakeholders could do a good job by conducting regular studies on the costs of coffee production, midterm and occasional strategy review meetings to review coffee industry needs from time to time as well as basis for informed coffee market price negotiations as a factor of calling for fair returns on coffee investments.

A TCB survey conducted between 2008 and 2009 confirmed six new entrants on the coffee map, to total 13 regions with overwhelming potential for coffee cultivation. The findings of the survey formed the basis of the stakeholders' (Coffee farmers' Cooperatives, TACRI, the Private Sector, Local Government Authorities and the Ministry of Agriculture and Food Security) discussions at the National Coffee Conference (NCC), the first since 2006, which articulated the National Coffee Industry Strategic Plan (2011 - 2021).

A Public Private Sector Partnership (PPP), that focuses on the optimisation of Tanzania's vast coffee opportunities will be reflected on the legacy of its enormous contribution to the national economic development.