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Presentation by Tony MugoyaExecutive ManagerUganda Coffee Farmers Alliancee-mail: tony.mugoya@ucfa.or.ug                  ...
The Uganda Coffee Map                        2
Brief history of Robusta in Uganda   Many species of Robusta    coffee are indigenous in    Uganda.   Wild Robusta still...
Evolution of commercial Robustacoffee farming in Uganda   Historically, coffee had    cultural significance in most    pa...
Distribution of Robusta Coffee in Uganda   Robusta coffee is more tolerant    to heat and flourishes at low    altitudes....
Robusta production in Uganda   The relatively low cost of    coffee production in Uganda    makes Ugandan coffee    growe...
.. Robusta production in Uganda   However, with Coffee Wilt    Disease (CWD) devastating    Ugandan Robusta coffee trees ...
Quality of Uganda’s Robusta                                       Differentials for internationally traded                ...
Development of Differentials for   internationally traded Robustas 2004 -2009   $/mt   320,00                           We...
Market Outlook: Supply and demand                 projections 2010 to 2020                180                170          ...
The Ugandan Smallholder Coffee FarmerCharacteristics                                            Why low income  Subsistenc...
Prospects for Uganda’s Robustas   Efficient /competitive internal market – farmers receive a high %-    age of FOT price...
UCFA DescriptionUCFA is a farmer owned apex organization, establishedto provide marketing and other support services tocof...
UCFA Background   The idea to form an apex organization was    initiated by coffee farmers back in 2006.   Farmer leader...
Why Farmer Organizations?   To empower farmers to create economic opportunities   To provide farmers ownership and decis...
Organizational Development Process and Structures                Producer                        Depot Committee          ...
3-Tiered Organization Structure                UCFA           DC           DC      PO        PO PO        PO              ...
Requirements for performance of          the model Leadership & coordination       Apex                                   ...
Organizational Development – 3 tier model                                       Organization   No. of                     ...
UCFA Growth   The original members of UCFA were 24 pioneer    DCs in Mityana and Mubende districts.   These DCs were ful...
CFAU project locations and beneficiaries                                  Project Districts   Direct Beneficiaries        ...
UCFA Governance Structure                    General Assembly                    Board of Directors Business         Finan...
UCFA VISION Improved livelihoods of coffee farmers in Uganda.          UCFA MISSION Improving livelihoods by providing e...
STRATEGIC OBJECTIVES   To support the adoption of best practices in    farmers’ operations.   To facilitate access to bu...
To support the adoption of best    practices in farmers’ operations.   Promote marketing of    quality coffee by    suppo...
How the marketing chain changesSupply Chain before Alliance Project Farmer selling                             to 2nd     ...
Value Addition achieved per Kg of coffee        (after by-passing middlemen)                    Selling            Deliver...
New marketing chain after Alliance Project intervention                   Importers (Consumers)                          E...
% of FOT value achieved by UCFA farmers From UCDA Monthly Reports                         60 Kg bags                Tot. V...
To facilitate access to businessand managerial skills.   Coordinate business skills capacity development; in areas    of ...
To promote good leadership amongcoffee farmers’ organizations.   Develop with members a professional code of conduct.   ...
To create partnerships with otherstakeholders in the industry.   Develop strategic    partnerships with    credible publi...
CORE VALUES   Transparent   Responsive   Innovative   Proactive                  33
GUIDING PRINCIPLES Good    governance Best   practice Commercial       orientation Sustainability    enhancement      ...
UCFA Principles on GoodGovernance   Democratic    leadership.   Transparency and    accountability.                     ...
UCFA Principles on Best Practices   Implementation of Good Agricultural and    Business Practices.   Increased participa...
UCFA Principles on CommercialOrientation   Training in business and management skills.   Transformation of farmers’ grou...
Principles on Sustainability    Enhancement Promoting social sustainability by advocating for  the entire household. Pro...
Guiding Papers Memorandum of Understanding Spells out the roles and duties of UCFA Spells out the regulations within UC...
UCFA members’ professionalcode of conduct1.   Members of Uganda Coffee Farmers     Alliance will be farmer organizations  ...
UCFA members’ code ofconduct3.   Members of Uganda Coffee Farmers     Alliance must adhere to principles of good     gover...
UCFA members’code of conduct5.   Members of Uganda Coffee Farmers     Alliance must strictly apply the best     business p...
UCFA’s Activities   Create linkages with    service providers e.g    financial institutions   Avail new services    e.g ...
UCFA’s Activities   Participate in new    innovations e.g Land    inventorization.   Coordinate cupping    training with...
UCFA’s Activities   Participate in Uganda    Coffee Platform    activities e.g SC    meetings, ASHMs etc   Participate i...
Conclusion   “Emwanyi bwe bugagga”!   “Coffee is wealth”.Thank You!Obrigado!                             46
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  1. 1. Presentation by Tony MugoyaExecutive ManagerUganda Coffee Farmers Alliancee-mail: tony.mugoya@ucfa.or.ug 1
  2. 2. The Uganda Coffee Map 2
  3. 3. Brief history of Robusta in Uganda Many species of Robusta coffee are indigenous in Uganda. Wild Robusta still grows in natural forests around the Lake Victoria Basin. Robusta coffee plants in Uganda have adapted to a range of environments and altitudes. These characteristics together with variations in disease resistance offer a great potential for coffee breeding. 3
  4. 4. Evolution of commercial Robustacoffee farming in Uganda Historically, coffee had cultural significance in most parts of Uganda. Coffee beans were used in ceremonies of brotherhood and friendship. Commercial production of coffee in Uganda started at the beginning of the 20th Century. In 1991, the Government liberalized the coffee industry which enabled farmers to obtain higher prices resulting in commercial production. 4
  5. 5. Distribution of Robusta Coffee in Uganda Robusta coffee is more tolerant to heat and flourishes at low altitudes. As a low land crop, Robusta coffee yields well from 1000 meters altitude up to medium altitude of 1600 meters. However, the fertile crescent of peripheral lands around Lake Victoria form the major Robusta producing area. In Uganda most of the Robusta is grown by smallholders in small individual plots where it is often mixed with other crops such as banana in the traditional shamba. 5
  6. 6. Robusta production in Uganda The relatively low cost of coffee production in Uganda makes Ugandan coffee growers fully competitive with other producers. The Uganda government policy through the Uganda Coffee Development Authority (UCDA) has been encouraging rapid replacement of the old low productive coffee with high yielding, quick maturing and disease tolerant clonal Robusta coffee. 6
  7. 7. .. Robusta production in Uganda However, with Coffee Wilt Disease (CWD) devastating Ugandan Robusta coffee trees including clonal coffee since 1993s, the Coffee Research Center (COREC) started caring out breeding work to attain CWD resistant cultivars. By the end of 2010, 7 CWD resistant lines had been approved. Consequently, tissue culture laboratories and nursery operators were earmarked to do mass multiplication. 7
  8. 8. Quality of Uganda’s Robusta Differentials for internationally traded Robusta Coffees Uganda produces what is considered by the market to Origin Differential be one of the world’s best c.i.f. Europe [US$/Mt] volume Robusta coffee. Uganda Screen 18 +150 – +200 Most of Uganda’s Robustas Uganda Screen 15 +50 – +100 are grown at medium altitude just above 1000 meters above India Cherry AB +50 – +100 sea level which gives them a Uganda Screen 12 +10 – +50 less harsh and yet distinctively Ivory Coast Grade 1 +50 rich taste. Vietnam Grade 1 +30 – +35 Uganda’s Robustas have been screen 18 highly rated in the Indonesia Gr. 4/80 -40 – -80 international market. defects Vietnam Gr. 2/5% -100 – -120 This high rating is reflected in Note: All prices are quoted against LIFFE – the price offered for Ugandan USD/Metric Tons and on CIF Basis; Robusta coffee. July 2009; Berhard Rothfos GmbH. 8
  9. 9. Development of Differentials for internationally traded Robustas 2004 -2009 $/mt 320,00 West II East Stand. Indonesia Vietnam 290,00 2004 2005 2006 2007 2008 2009 260,00 230,00 200,00 170,00 140,00 110,00 80,00 50,00 20,00 -10,00 -40,00 -70,00 -100,00 -130,00 -160,00 -190,00 -220,00 1. 3. 6. 9. 2. 3. 5. 8. 1. 2. 5. 8. 2. 3. 6. 9. 2. 4. 6. 9. 1. 5. .0 .0 .0 .0 .1 .0 .0 .0 .1 .0 .0 .0 .1 .0 .0 .0 .1 .0 .0 .0 .0 .0 06 30 22 14 07 08 31 23 15 28 23 29 12 13 12 18 11 01 24 30 27 26Note: All prices are quoted against LIFFE –USD/Metric Tons on CIF Basis; July 2009; Source: Berhard RothfosGmbH Standard “West II” refers to Grade II of West African Robustas (Ivory Coast, Cameroon); “EastStandard” refers to Uganda Robusta Screen 15; “Indonesia” Standard refers to Indonesia Grade4/80 defects;“Vietnam” refers to Vietnam Grade 2/5% of defects. 9
  10. 10. Market Outlook: Supply and demand projections 2010 to 2020 180 170 160 150 140 million bags 130 120 110 100 90 80 Total production Total consumption Production trend High 2.4% Consumption 2% Low 1.5%Source: ICO 10
  11. 11. The Ugandan Smallholder Coffee FarmerCharacteristics Why low income Subsistence Farming Poor agricultural practices Limited use of inputs; Coffee intercropped fertilizers and crop with bananas, various protection products types of beans, cassava, fruit trees Very low coffee yields, approx. 550-600 Kg/Ha (green coffee) 0,4 – 1,2 ha of land Very strong dependency onApprox. 300 coffee trees middlemen for access to loans and access to market Mainly family labour Weak position in the value chain 11
  12. 12. Prospects for Uganda’s Robustas Efficient /competitive internal market – farmers receive a high %- age of FOT price The Ugandan coffee industry is organised through a multi stakeholder platform which is private sector led. The government through UCDA has promoted coffee trade. There is low direct taxation on coffee exports. Farmers are encouraged to grow high yielding varieties, employ good husbandry and participate in marketing by the apex organization called the Uganda Coffee Farmers Alliance (UCFA). 12
  13. 13. UCFA DescriptionUCFA is a farmer owned apex organization, establishedto provide marketing and other support services tocoffee farmers’ organizations in Uganda. UCFA supportsthe commercial development of these farmerorganizations though strong emphasis on marketing andlinkages with important service providers such asfinancial institutions, input suppliers and extensionproviders.UCFA’s development has been supported by the HannsR. Neumann Stiftung (HRNS) especially through FarmerOrganization Development. 13
  14. 14. UCFA Background The idea to form an apex organization was initiated by coffee farmers back in 2006. Farmer leaders in Mityana and Mubende met in various farmers fora to discuss the apex. Later on an apex formation committee was elected to spearhead this process. UCFA was incorporated on 4th May 2010 as a company limited by guarantee. 14
  15. 15. Why Farmer Organizations? To empower farmers to create economic opportunities To provide farmers ownership and decision-making To reduce (eliminate) dependencies To enable market access and participation in the value chain To enhance bargaining power and achievement of economies of scale To make smallholders interesting partners for service providers To encourage “farmer to farmer” learning To enable farmers to engage in dialogue with other stakeholders 15
  16. 16. Organizational Development Process and Structures Producer Depot Committee Uganda Coffee Organization (PO) (DC) Farmers Alliance 25 - 35 Farmers Approx. 20 POs Association of DCsArea Village Level Parish Level National LevelKey Mobilization Coordination of PO activities Coordination of DC activitiesFunctions Extension Bulking Market access Collection of Coffee Value addition Link to service providers Entry point for new Farmers → Coffee logistics → Capacity building Quality control Strategic partnerships Marketing Representation Code of conductKey Roles Executive Committee Executive Committee Board of Directors Lead Farmer Control Committees Executive Manager Demo Holder Marketing manager Support staff FFS Host DC Extensionist FFS Facilitator 16
  17. 17. 3-Tiered Organization Structure UCFA DC DC PO PO PO PO 17
  18. 18. Requirements for performance of the model Leadership & coordination Apex TrustExtension and UCFAResearch info Compliance with code of Market conduct information ActiveMarket access ParticipationValue addition Farmer Field Organizations Information Linkages to service PO & DC Business providers approach Compliance Improved with code of quality of conduct coffeeTransparency Improved Farmers production of coffee 1
  19. 19. Organizational Development – 3 tier model Organization No. of level Farming UCFA Households PO Producer 20-30 Organization PO (PO) Depot 500-700 PO Committee DC (DC) DC PO Uganda 2011 PO DC Coffee 15,000 Farmers PO DC Alliance 2012 (UCFA) 30,000 PO PO 2013 35,000 2014 53,000 19
  20. 20. UCFA Growth The original members of UCFA were 24 pioneer DCs in Mityana and Mubende districts. These DCs were fully developed and had already been incorporated as companies. Other 24 DCs in Luwero and Nakaseke are currently being incorporated into companies. These are officially joining UCFA before the end of 2012. Other 34 DCs in Masaka and Bukomansimbi, and also Ruwenzori region are undergoing development and are expected to join later by 2014. 20
  21. 21. CFAU project locations and beneficiaries Project Districts Direct Beneficiaries (Households) Mityana/Mubende 15,000Coffee Luwero/Nakaseke/regions of 15,000Uganda Nakasongolaand CFAUdistricts Masaka 15,000 Kasese 8,000 Total 53,000 21
  22. 22. UCFA Governance Structure General Assembly Board of Directors Business Finance DisciplinaryCommittee Committee Committee Executive Manager Financial Administration Officer Officer Office Assistant Driver 22
  23. 23. UCFA VISION Improved livelihoods of coffee farmers in Uganda. UCFA MISSION Improving livelihoods by providing efficient marketing and support services that enhance commercialization of agriculture. 23
  24. 24. STRATEGIC OBJECTIVES To support the adoption of best practices in farmers’ operations. To facilitate access to business and managerial skills. To promote good leadership among coffee farmers’ organizations To create partnerships with other stakeholders in the industry. 24
  25. 25. To support the adoption of best practices in farmers’ operations. Promote marketing of quality coffee by supporting a quality assurance system. Establish an efficient coffee marketing system that offers competitive prices. 25
  26. 26. How the marketing chain changesSupply Chain before Alliance Project Farmer selling to 2nd to 1st Kiboko at farm Intermediary, Intermediary, to Export gate at the processing and selling the company lowest value selling FAQ on coffee on… point … … Supply Chain of Coffee Farmers Alliance Farmer selling through DC (Coffee Farmer Company) green coffee … that provides value chain services: to Export quality control, bulking, processing, company logistics and marketing … 26
  27. 27. Value Addition achieved per Kg of coffee (after by-passing middlemen) Selling DeliveringSelling at 8% at Hulling 12% throughFarm Gate Factory Exporters + 20% 27
  28. 28. New marketing chain after Alliance Project intervention Importers (Consumers) Exporters Millers UCFA (Farmers’ Organization) Members 28
  29. 29. % of FOT value achieved by UCFA farmers From UCDA Monthly Reports 60 Kg bags Tot. Value $ Value $/Kg Export Month Robusta coffee FOT basis FOT basis October’11 167,645 18,335,972 1.82 November’11 150,004 16,664,613 1.85 December’11 168,198 18,760,197 1.86 January’12 159,416 17,988,471 1.88 February’12 157,890 17,670,095 1.87 Total 803,153 89,419,348 1.86 Average price Exchange rate Average price % of FOT value Ush/Kg Ush/USD (BoU) USD/KgDCs on delivery 4,465 2,562 1.74 93.5%to KampalaFarmers after 3,967 2,562 1.55 83.3%DC deductionsFarmers outside 3,272 2,562 1.28 68.8%project 29
  30. 30. To facilitate access to businessand managerial skills. Coordinate business skills capacity development; in areas of banking, credit access, financial management, etc. Coordinate managerial skills capacity development; by participating in developing and training of farmers leaders on their terms of references and job descriptions. 30
  31. 31. To promote good leadership amongcoffee farmers’ organizations. Develop with members a professional code of conduct. Enforce compliance to the professional code of conduct. Ensure that adequate controls exist in member organizations. Ensure that members understand and adhere to provisions of their constitutions and articles of association. 31
  32. 32. To create partnerships with otherstakeholders in the industry. Develop strategic partnerships with credible public and private organizations. Ensure farmer representation at local, national, regional and global fora. 32
  33. 33. CORE VALUES Transparent Responsive Innovative Proactive 33
  34. 34. GUIDING PRINCIPLES Good governance Best practice Commercial orientation Sustainability enhancement 34
  35. 35. UCFA Principles on GoodGovernance Democratic leadership. Transparency and accountability. 35
  36. 36. UCFA Principles on Best Practices Implementation of Good Agricultural and Business Practices. Increased participation in the value chain (The 5 Value Options – Acquire, Retain, Add, Create & Distribute) 36
  37. 37. UCFA Principles on CommercialOrientation Training in business and management skills. Transformation of farmers’ groups into viable business units (and transformation of farmers from merely being subsistence coffee producers into being farm entrepreneurs). 37
  38. 38. Principles on Sustainability Enhancement Promoting social sustainability by advocating for the entire household. Promoting ecological sustainability by supporting environmental conservation. Promoting responsible practices in farmers’ operations. 38
  39. 39. Guiding Papers Memorandum of Understanding Spells out the roles and duties of UCFA Spells out the regulations within UCFA Members’ Agreement Describes financing of operations Defines membership Defines management of operations UCFA’s code of conduct 39
  40. 40. UCFA members’ professionalcode of conduct1. Members of Uganda Coffee Farmers Alliance will be farmer organizations that are purely commercially oriented.2. Members of Uganda Coffee Farmers Alliance must be fully transparent and accountable in all their transactions and operations. 40
  41. 41. UCFA members’ code ofconduct3. Members of Uganda Coffee Farmers Alliance must adhere to principles of good governance which should include democratic leadership.4. Members must aggregate an agreed amount of coffee through Uganda Coffee Farmers Alliance for further value addition and bulk marketing so as to achieve economies of scale and a collective bargaining power. 41
  42. 42. UCFA members’code of conduct5. Members of Uganda Coffee Farmers Alliance must strictly apply the best business practices so as to achieve competitiveness.6. Members of Uganda Coffee Farmers Alliance must promote and ensure strict implementation of Good Agricultural Practices among their farmers so as to ensure high quality and quantities of their coffee. etc. 42
  43. 43. UCFA’s Activities Create linkages with service providers e.g financial institutions Avail new services e.g farmers’ insurance schemes Participate in farmers’ advocacy programs at local, national and international levels. 43
  44. 44. UCFA’s Activities Participate in new innovations e.g Land inventorization. Coordinate cupping training with UCDA. Contribute to development of farmer organization registration criteria. Participate in community radio broadcasts. 44
  45. 45. UCFA’s Activities Participate in Uganda Coffee Platform activities e.g SC meetings, ASHMs etc Participate in policy formulation e.g NCP, NCS, NCES, etc Coordinate agro input financing schemes 45
  46. 46. Conclusion “Emwanyi bwe bugagga”! “Coffee is wealth”.Thank You!Obrigado! 46
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