By Nelson Mandela Muhoozi
The introduction of coffee as a cash crop in Uganda is directly associated with the establishment of Uganda as a British Protectorate in 1894.
The effects of World War II drove the British to seek ways of rebuilding their economy and enabling the new Ugandan protectorate to become self-sustaining.
At the time, Robusta coffee was freely growing in the country and mostly used in traditional rituals. Arabica coffee was introduced in around 1900 from the Ethiopian highlands and Malawi and was mainly propagated using seeds.
Records indicate that the British first introduced cotton, cocoa, rubber, tea as the initial cash crops. Coffee was added to the list later.
For a time, the British raced in a comfortable lane, as their financial burdens in the protectorate lightened, and local households adopted the growing of coffee for commercial purposes.
Records show that in 1925, coffee accounted for 1% of Uganda’s export commodities, an impressive figure at the time.
Soon, the white government designed and introduced production campaigns in addition to provision of extension services.
Coffee became the leading source of household incomes, but also greatly augmented Government revenue. To that end in 1929, the British government set up the Coffee Industry Board to address quality concerns that were rising at the time.
Up until the 1980s, coffee remained the most important cash crop, accounting for 191,700 hectares of Robusta and about 33,000 hectares of Arabica across the country.
Between 1984 and 1986, the European Economic Community (EEC) financed a coffee rehabilitation programme meant to improve production at the time. The programme also supported research, extension work, and training of farmers to upgrade their skills, and play a more active role in the development of the economy.
In 1986, the NRM government took power. The new leader; President Yoweri Museveni, sought to improve coffee production and cut down on smuggling, which had gained ground during the turbulent 1970s and 1980s.
To deal with the smuggling, the Government raised prices of coffee on the basis of the new prices being more reflective of world market prices and local factors, such as inflation.
By December 1988, the Coffee Marketing Board was unable to pay farmers for new deliveries of coffee or to repay loans for previous purchases.
The board owed Sh1 billion to its suppliers and Sh2.5 billion to the commercial banks, and although the Government agreed to provide the funds to meet these obligations, some of them remained unpaid for another year.
At the time, Uganda was a member of the International Coffee Organisation (ICO), a consortium of coffee-producing nations that set international production quotas and prices.
ICO set Uganda’s annual export quota at only 4% of global coffee exports. Later in December 1988, a wave of coffee buying pushed the ICO price up and triggered two increases of one million (60kg) bags each in global coffee production limits.
The increased demand and rising price resulted in a global quota increase to 58 million 60kg bags in 1989. However, Uganda’s export quota rose only by about 3,013 bags, bringing it to just over 2.3 million bags.
In 1989 Uganda’s coffee production capacity exceeded its quota of 2.3 million bags, but export volumes were still diminished by economic and security problems.
Also, large amounts of coffee were still being smuggled out of Uganda for sale in neighbouring countries.
And because the Coffee Marketing Board would take long, up to a year sometimes to pay the farmers from who it got the coffee on credit, the farmers started to cut down coffee trees and replace them with food crops like cassava from which they would get quick cash.
This news alarmed Government and because foreign proceeds from coffee were Uganda’s economic lifeline.
According to former finance minister Ezra Suruma, the Bank of Uganda intervened on instructions from the Government, and took cash to pay coffee farmers with hope that they would stop cutting coffee trees.
To effectively promote and develop coffee as a cash crop, Suruma was sent to Madagascar, Costa Rica and Columba with a team of four on a benchmarking mission.
On return, several meetings were held. One of the key recommendations was to liberalise the coffee exports business to additional players. The returning team also recommended the setting up of a new body to replace CMB in promoting coffee production and enforcing coffee quality standards. In light of that the name of the new body would include the words ‘development’ and ‘authority’.
While the CMB had been formally a trading organization, the new body was to promote the coffee sector and to regulate it so that Uganda would maximize both the production and value of her coffee.
Consequently, Uganda Coffee Development Authority was formed to facilitate increase in quality coffee production, productivity, and consumption working with farmers, nursery operators, processors, exporters and coffee traders.
UCDA is mainly a service provider and the services availed to its stakeholders include provision of clean planting materials, farmer, barista, processor and roaster trainings and market research and information dissemination to stakeholders.
Before co-operatives became dysfunctional in Uganda, coffee was grown on a small holder basis, buttressed along a structured value chain with the farmer at the production level.
The small holder farmers organised themselves into cooperatives as early as 1913 and operated informally till 1946 when they got registered. However, liberalisation of the coffee industry in 1991 led to the collapse of cooperatives.
Presently, there are up to 126 coffee growing districts structured into five geographical regions, including the Central, Northern, Eastern, Western and South-Western.
Of the 126 Districts, 88 grow Robusta only, 15 Arabica only while nine districts grow both Robusta and Arabica.
Players in the coffee Industry have also increased exponentially, with a total of 88 registered export companies, 36 Export Grading Plants, 537 Hulleries (dry processing plants), and 22 washing stations.
The Central Region dominates coffee production with total plantings of 67,494,755, according to UCDA’s Data Fact sheet.