The role of farmer organizational development in profitable coffee production

1. The role of farmer organizational development in profitable coffee production Presented by Tony Mugoya Executive Manager, Uganda Coffee Farmers Alliance

2. Brief history of coffee in Uganda • Many species of coffee especially Robusta coffee are indigenous in Uganda. • Historically, coffee had cultural significance in most parts of Uganda. • Commercial production of coffee in Uganda started at the beginning of the 20th Century. • In Uganda most of the coffee is grown by smallholders (over 1,000,000 households) in small plots where it is often mixed with other crops such as bananas.

3. Brief History of Coffee Extension in Uganda • The public extension system evolved from regulatory services (coercive), progressive farmers’ schemes (persuasive), to unified, decentralized and demand driven approaches. • Private extension approaches included commodity based and farmer led extension systems such as Farmer Field Schools. • Coffee production is dominated by smallholders who face many challenges.

4. Main challenges faced by smallholders preventing business development and competitiveness • Knowledge • Lack of adequate agronomic training • Lack of a clear understanding of the value chain • Lack of market information • Lack of business, marketing and technical skills (Farming as a Business) • Size • Individually they are too small to access the important services that are critical for developing their enterprises (Inputs and Finance) • Low volume of produce results in very weak bargaining position and limited market access • As a result their most likely “business” partners are the middlemen. This has created a very strong dependency on middlemen for market access and for finance

5. Challenges faced by smallholders are best resolved through Farmer Organizational Development • To empower farmers to create economic opportunities • To provide farmers ownership and decision-making • To enable market access and participation in the value chain • To enhance bargaining power and achievement of economies of scale • To make smallholders attractive to service providers • To encourage “farmer to farmer” learning • To give farmers a voice - to engage in dialogue with other stakeholders • To strengthen the self help potential of coffee communities

6. Organizational Development Process and Structures

7. Farmer Organization Requirements for Performance

8. Improved access to extension training • Demonstration plots where farmers in a group learn about the effect of GAPs on yields. • Farmer Field Schools where “farmer to farmer” learning occurs. • Technology Development Sites where farmers analyze local innovations. • Groups enable farmers to effectively demand for appropriate training.

9. Input Use enable increase in yield • Fertilizers are crucial for significantly improving yields • Average production on demonstration plots has increased from 0.6 MT/Ha of green coffee to about 2.7 MT/Ha through the application of fertilizers and other good agricultural practices

10. Improved access to markets • Farmers Organizations enable bulking of members coffee. • Farmers Organizations create opportunities for value addition. • Farmer Organizations enable achievement of economies of scale. • Farmer Organizations enable achievement of a collective bargaining power.

11. Improved access to financial services • Farmer Group Finance • Marketing operations financing (for value addition and logistics) • Input stocking financing • Individual Finance • Household needs financing (medical expenses and school fees) • Input purchase financing

12. Improved participation along the value chain Through the 5 Value Options by farmers: • Acquiring greater value through improved planting materials, adopting GAPs and engaging in sustainable practices. • Retaining value through local service provision and taking up more value chain roles. • Adding value through processing and extending higher up in the value chain. • Creating value through new product lines e.g coffee extracts and selling husks. • Distributing value to women and youth by encouraging their active participation.

13. Combined effect of value addition and yield improvement on net income – Average Farmer with 300 coffee trees * Total cost includes interest (Over 20% per annum) paid on USD 125 loan for fertilizers

14. UGANDA COFFEE FARMERS ALLIANCE“Improved livelihoods for coffee farmers in Uganda.” Farmer Organization Development is the key to livelihood improvement for smallholders and their transformation into commercially oriented farm entrepreneurs. “Emwanyibwebugagga!” “Coffee is wealth!” Visit the UCFA Stall Number 65 in the Exhibition Area for more information.