Stakeholders in the coffee value chain have urged the government to address continuous challenges being presented by the presence of middlemen. Coffee is the second biggest traded commodity after oil.
Speaking during a stakeholder’s dialogue held in Kampala recently, Nandala Mafabi, the chairperson of Bugisu Co-operative Union Limited, noted that middlemen and low prices remain a major challenge in the coffee value chain.
“There is no development without the government in the chain. To get commercial credit (from banks), you must plan properly. It will only work for you in agriculture if you have insurance,” he said.
“How are we addressing issues of middlemen who come with nothing and buy farmers’ coffee at the lowest cost because they are the determinants of price?
“A chain starts from the farmer to the roasters. The only thing that can remove people from poverty is what they can produce and coffee is one of them,” Mafabi added.
Middlemen, also known as independent intermediaries, normally offer to buy at farm gate and may not require high demands on coffee quality as opposed to producer organisations, such as co-operatives.
The practice also is perceived to threaten the economic viability of the producer organisation.
Organised by the Southern and Eastern Africa Trade Information and Negotiations Institute (SEATINI), the dialogue brought together key coffee sector players, government officials and civil society organisations.
The objective of the dialogue was to bring together value chain actors in the coffee sector to share experiences and build synergies with policy makers, appreciate the dynamics of coffee at national, regional and global level and to forge a way forward on how to unlock the potential of the coffee value chains.
Latest data from Uganda Coffee Development Authority (UDCA) indicates that Uganda’s coffee exports for 12 months (November 2021-October 2022) totalled 5.83 million bags, compared to 6.55 million bags the previous year (November 2020- October 2021) — representing a decrease of 11.02% in quantity.
The decrease in exports, according to UCDA, was mainly attributed to lower yields that were characterised by drought in most regions, leading to a shorter main harvest season in central and eastern regions and also reduced harvests from Greater Masaka and south-western regions.
George Tumuhimbise, a coffee farmer from Mubende district, noted that the government has a key role to play.
“Government must wake up because it has a key role to play in unlocking the potential of actors in the value chain. We have a problem of fake inputs and standards. It is government in charge of the standards and it is responsible for giving extension services to the farmers,” he said.
Nelson Tugume, the director of Inspire Africa, said the government should find ways of de-risking private sector players who are small, but have the capacity to scale.
“Twenty percent of coffee is produced here, the business is run by multinationals and 90% of the small players are in the armpits of multinationals. The discussions we should be having is how we can bring financing,” he said.
John Wanyu from Slow Food Uganda said there is need to continue encouraging Ugandans to form co-operatives to be able to benefit in the coffee trade.
Jane Nalunga, the executive director at SEATINI, said issues of branding remain a huge challenge for both government and private sector players.
“We need to brand our coffee at the national and global level. When you go out there, other brands are there, but our coffee is not yet there,” she said.
“The coffee sub-sector has potential to get people out of poverty. However, for this potential to be realised, the government must play a bigger role in regulating the sector and supporting coffee farmers, including small-scale coffee farmers.
“The coffee sub-sector has the potential to increase incomes both at household and national levels because coffee is a major foreign exchange earner for Uganda. There is a lot that needs to be addressed in the sub-sector, especially at the production level.”
Uganda produces a wide range of agricultural products, including coffee, tea, sugar, livestock, fish, edible oils, cotton, tobacco, plantains, corn, beans, cassava, sweet potatoes, cassava, millet, sorghum and groundnut.
However, these products are largely traded in their raw form, thus fetch minimal returns for all value chain actors and for government