Creating Equitable Sharing of Treasures of Coffee through Value Chain Expansion to Over 150 Farmer Associations and Cooperatives in Uganda

Nucafe Logo

Since 2013, the National Union of Coffee Agribusinesses and Farm Enterprises Ltd (NUCAFE), in partnership with TradeMark East Africa Research and Advocacy Challenge Fund (TRAC) along with other consortium members that include the Agribusiness Initiative Trust (ABI Trust), National Agricultural Advisory Services (NAADS) and Consortium for enhancing University Responsiveness to Agribusiness Development Limited (CURADS) has run a project which has assisted over 20,000 farmers through their farmer associations participating in the higher nodes of the value chain for increased household incomes.

The project has been regarded as a success with NUCAFE and its consortium partners empowering 100% of the member smallholder farmers to participate competitively in the higher nodes of the value chain. NUCAFE established 16 new farmer-owned coffee value aggregation centres in the coffee growing regions of Uganda resulting in the creation of a cumulative total of 215 permanent jobs, over 360 temporary jobs and 374 casual labourers (a total of 949 jobs). The project additionally established the Centre for Agribusiness and Farmer Entrepreneurship Enhancement (CAFÉ) resulting in a strengthened farmers’ supply base using the Farmer Ownership Model.

The project implementation is structured into 5 milestones as indicated below:

  1. involved the securing of 5,000 smallholder farmers commitment to participate in the project by month six

  2. the installation and commission of a coffee roasting processing facility with a capacity of at least 100kgs per hour installed

  3. the creation of at least 94 full time jobs and an additional 460 part time jobs in the coffee association participating in the project (end of project year 2)


  4. to increase the sales volume of coffee being produced through NUCAFE and project partners from 200MT in 2012 to 900MT by the end of 2014

  5. to increase the revenue generated for farmers by coffee bean sales by 30% at the end of 2014 compared to 2012 average price

.

Project Outcomes

  • Coffee buyer visits NUCAFE Member Associations in search of coffee origins – smallholder coffee farmers from Rwenzori Uganda made a landmark entry into the market through facilitating a single initial container export to London UK as a result of the facilitated capacity building in Good Agricultural Practices (GAPS), Good Handling Practices (GHPs), Good Manufacturing Practices (GMPs) and Total Quality Management undertaken among the smallholder famers and farmer associations. The noteworthy and improved coffee quality has attracted several coffee buyers from the UK to initiate purchase enquiries with the farmers from the Karangura and Kabonero Coffee Farmer Associations.
  • International Agribusiness Training – as a result of its successes in building coffee value chain actors capacities, the CAFÉ has attracted interest in its training activities from across Africa. Supported by the Danida Fellowship Centre in Copenhagen, Denmark, CAFÉ has run best practice sharing courses to 18 participants from Ghana, Kenya, Mozambique, Tanzania and Uganda.
  • Brand and Awards – currently two brands (NUCAFE and Omukago) have been developed through the project and have undergone MVP and have been well received by the customers. NUCAFE won several awards in 2013 for helping empower smallholder famers and increasing their incomes. Recognition of the project’s achievements included, among others, (i) the farmer ownership model was listed by the EU’s Technical Center for Agriculture and Rural Cooperation (CTA) among the Top 20 innovations that support smallholder farmers; (ii) NUCAFE won the AGRA Africa Farmer Organizations of the Year Award (FOYA) in 2013 as Best in Income Diversity category. In addition, NUCAFE also received an award at the East African Agribusiness Investment Summit for its best Inclusive Agribusiness Model in 2013 – ‘Farmer Ownership Model’ innovated by Joseph Nkandu. The Executive Director of NUCAFE, Joseph Nkandu was also elected as an Ashoka Fellow for the significant social entrepreneurial impact of the farmer ownership model projects.

Challenges and Lessons Learned

Despite the acknowledged successes, the project’s implementation was not entirely challenge free as there were delays in the accomplishments of the agreed milestones; the main obstacles to progress included the following:
  • Exchange rate and price increases for equipment were between budget plans and final suppliers’ invoices and these had not been anticipated, so a contingency for this factor should have been factored into plans.
  • Failure to secure an agreed letter of credit within the anticipated timeframe led to unexpected expenses in the construction works (e.g. ground works, drainage and boundary improvements, etc.) affecting the original budget for initial milestone completion, so planning should incorporate cost uncertainties and project input vagaries.
  • The original planned Probat coffee roasting and grinding equipment to be acquired from Germany became increasingly expensive due to the exchange rate fluctuations and thus alternative equipment was imported from Toper in Turkey, so foreign exchange rate fluctuations should be factored in to the planning exercise.

Conclusion

The project delivered significant results in the EAC region as outlined above, attracting interest from farmers, traders, operators of coffee shops and the Government of Uganda. The establishment of the coffee processing facility has led to increased demand for coffee from the NUCAFE farmers’ partnership. It has also raised the profile of Ugandan coffee products and awareness of a greater variety of Ugandan suppliers. The project created significant new employment opportunities for young adults and women. A National Coffee Policy (NCP) has also been adopted by the Government of Uganda and is in operation. The Farmer Ownership Model has also been unanimously adopted by the farmers organizations across East Africa within the East Africa Farmers Federation (EAFF) network based in Nairobi. “The impact of the project is seen by the roots it has established in Eastern Africa” – Joseph Nkandu.