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Tanzania Coffee Industry Development Strategy (2011-2021)

Tanzania Coffee Industry Development Strategy (2011-2021). PRESENTATION ; AT AFCA 2013 KAMPALA ADOLPH A. KUMBURU TANZANIA COFFEE BOARD. Coffee growing regions in tanzania. FUNCTIONS OF THE TANZANIA COFFEE BOARD.

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Tanzania Coffee Industry Development Strategy (2011-2021)

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  1. Tanzania Coffee IndustryDevelopmentStrategy (2011-2021) PRESENTATION ; AT AFCA 2013 KAMPALA ADOLPH A. KUMBURU TANZANIA COFFEE BOARD

  2. Coffee growing regions in tanzania

  3. FUNCTIONS OF THE TANZANIA COFFEE BOARD Tanzania Coffee Board (TCB) is a government institution established by Act no. 23 of the parliament in 2001 The TCB has two Basic functions: Promotion Regulatory Representation Supervisory Monitoring Advisory Information disemmination Co-ordination

  4. CONTENTS • Why sector strategy? • Strategy participatory development process • The strategy: logic of intervention • Quantitative objectives • Four strategic thrusts to reach the objective • Problem analysis • Intervention Strategy • Impact scenario (summary)

  5. Whysectorstrategy? Problem oriented (not program oriented – every organization tends to follow their own agendas) Allow to bring sustainable « sector change » (unlike individual action tackling problems in a single dimension) Bring under the same « roof » actors of very different natures  unlikely to cooperate otherwise (private, public, research etc.)

  6. Strategyparticipatorydevelopmentprocess National Coffee Conferencedecides to develop a coffee sectorstrategy (December 2009) National and local consultation with all actors of the value chain (TFC meetings + 8 zonal meetings gathering about 600 stakeholdersfrom 28 districts) First draftvalidated by NCC in May 2011 Presentation/Adoption of the document by Government May 2012 Implementation

  7. Key principlesobservedwhendevelopping the strategy • Process vs. Output -> bringing people together is as important as the final product • Being pragmatic (vs.wishlist) -> need to be both ambitious and realistic • Linking with future implementation -> concrete actions and implementation plan

  8. The strategy: logic of intervention

  9. The strategy • VISION • “The Tanzanian coffee industry aims to build a long term sustainable and profitable coffee industry to all stakeholders, producing internationally recognized high quality Arabica and Robusta coffees and making a significant contribution to macro-economic stability, poverty reduction and improved Tanzanian livelihoods.” • OBJECTIVE • “To increase national coffee production and quality so as to improve incomes for the entire value chain, particularly coffee farmers.”

  10. Quantitative objectives • Increased annual clean coffee production from the present average of 50,000 tons to at least 80,000 tons by year 2016 and 100,000 tons by year 2021 • Improved coffee quality demonstrated by an increase in the share of coffee sold with price premiums on export markets, from the present 35% of the total volume to at least 70% by year 2021 • Farmers’ share of the net FOB price on coffee exports is improved to reach at least 75% by year 2021

  11. Four strategicthrusts to reach the objective Strategic thrust 1: Increase coffee productivity and overall production Indicators of success • Average coffee yield at the national level increases to reach at least 450 kgs of clean coffee per hectare by year 2021 (+100% increase) • At least 10,000 hectares of new coffee farms are planted by year 2021

  12. Problemanalysis Main problem of Tanzania is low yields, about 225 kgs of clean coffee per hectare as an average Robusta = 500 kgs/ha (Vietnam produces 5 times more) Arabica= 170 kgs/ha (Brazil produces 7 times more) Atthislevel of productivity coffee farmingcannotbe profitable, currentlyTanzania coffee production is not economicallysustainable

  13. Gap analyis: whatisalreadybeingdone? Whatismissing? • TaCRI has already a theoretical capacity of maximum 15 M. improved seedlings per year • How to link with on farm replanting and efficient nursery management? (Survival rate) • For dissemination of GAP and sustainable coffee production, possibility to capitalize on successes from NGO projects and upscale their approach (Technoserve, Neumann, Sustainable Harvest etc…)

  14. ST1: Intervention Strategy

  15. Four strategicthrusts to reach the objective Strategic thrust 2: Improve efficiency of the value chain Indicators of success • By 2016 the Average share of transaction costs from Farm-gate to FOB is reduced from the current 35% to 25% • By 2016 the average time needed to move the coffee form farm-gate to FOB is reduced from the current average 3 months to 2 months

  16. Problemanalysis Tanzania coffee value chaincurrentlysuffersfrom: • Loss of value (internal marketing, transport, unecessaryintermediaries, taxation, hassles, somepoorlymanagedcooperatives,repeatedgrading/sorting/bulking , sisal bags etc.) • Slow transfer of coffee from one stage to another(highcost of capital financing, pricerisk, qualitydeterioration, loss of opportunities on international markets) -> It isalways the farmerwhoultimately pays for transaction costs

  17. Gap analyis: What is already being done? What is missing? • Consultation organized by government / TCB • Recentevolutions in regulations and taxation frameworkat national level • Someimprovementsat district level -> How to mainstreamthese initiatives into an overallcoherent and enablingregulatoryframework

  18. ST2: Intervention Strategy

  19. Four strategic thrusts to reach the objective Strategic thrust 3: Support overall coffee quality improvement Indicators of success • By 2021 a minimum of 70% of the coffee produced in Tanzania is of grade 1-7 • By 2021 a minimum of 75% of the Arabica coffee produced in Tanzania is processed through CPU

  20. Problemanalysis • Sundried coffee or hand pulped coffee are not necessarily inferior to CPU washed • Management of the process is however much more complicated and requires delicate care and know how • In Tanzania, about 90% of the coffee is currently home processed (Hans R. Neumann Stiftung)  Inconsistent and heterogeneous quality because of deficient post harvest practices  Tanzanian coffees used in blends rather than single origin coffees.

  21. Gap analyis: Whatisalreadybeingdone? Whatismissing? • ExistingCPUsthroughout the country (about 10% of the production isfullywashed) • SomeCPUscouldberehabilitated • Possibility to capitalize on workdone by privatesector and NGO projects(SustainableHarvest, Neumann, Technoserve) -> How to effectivelycreateincentive for farmers to improveharvest / post- harvest practices? -> How to upgrade the national CPU capacity in a sustainablemanner (no CPUsabandonnedafter a few years)

  22. ST3: Intervention Strategy

  23. Four strategicthrusts to reach the objective Strategic thrust 4: Support the promotion of Tanzanian coffees abroad and explore new market opportunities including sustainable coffees Indicators of success • By 2021 a minimum of 50% of the coffee produced in Tanzania is “sustainable” (UTZ, 4C, FLO, Rainforest, Organic) • By 2021 domestic consumption is increased in Tanzania and reaches at least 10% of the production

  24. Problemanalysis • Need to mainstreamsustainability issues in general coffee practices • Sustainable coffee representalso a growingmarket and large players are committing to source almostexclusivelyfromsustainableproducers • Generally, external marketing need to takeintoaccount the growth on emergingmarkets and the « branding » aspect of Tanzanian coffee • Possible development of domesticmarket

  25. Sustainability • Not only certifications/verifications/code of conduct • Start with GAP -> who pays the cost? -> willtherebe premiums? -> what certifications/verifications/code of conductshouldbepromoted?

  26. Gap analyis: Whatisalreadybeingdone? Whatismissing? • Sustainability: UTZ mainlywith large estates • Sustainability: Some initiatives for GAP (NGOs) • External marketing: mainlyprivatesector but as well TCB (EAFCA, other forums) -> No clear indications on which certification/verification/code of conductpromotingnationally -> Should Tanzania bedevelopped as a « brand » or issomethingthatcomes in an organicmanner?

  27. ST4: Intervention Strategy

  28. Impact scenario (summary) If the coffee strategy is implemented: • Additional revenues of at least +150 M. $US per year (+223 M. $US at current price) • 250 M. $US generated annually by the coffee industry (335 M. $US at current price) • 75% redistributed to coffee farmers. It will almost double (+95% increase) the coffee incomes for 400,000 households -> Reduction of poverty and sustainable capacity for self improvement of the coffee industry

  29. AHSANTE SANA PRESENTATION BY TANZANIA COFFEE BOARD Contact: DIRECTOR GENERAL P.O Box 732, MOSHI info@coffeeboard.or.tz www.coffeeboard.or.tz

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