THE CHALLENGES OF FORMULATING THE UGANDAN NATIONAL COFFEE POLICY
Posted on 6/2/2010
The coffee industry was liberalised in 1991 with the passing of the UCDA Statute and the 1994 Coffee Regulation. This led to the placing of all areas of production, processing and marketing in the control of the private sector, with increasing investments. Over 100 Companies were registered as coffee exporters. Since then coffee exporters have made enormous investment in the industry accounting to over USD $ 100Million both at export level and grassroot level including modern wet processing machinery. Because of the efficiency in the value chain brought about liberalization, the share of the export price received by farmers increased from 20% to 70%. However policies were non- existent.
During the 3rd National Coffee Farmers Convention held on 30th July 2008 at the Mandela National Stadium, it was brought to the attention of the Prime Minister, Prof. Apollo Nsibambi, that the coffee sub-sector was very strategic to the economy of Uganda. Despite that importance, it was further observed that, the sub-sector was not competitive in terms of quantity, quality and export earnings.
The major reason for this was lack of a comprehensive national coffee policy that addresses gaps at different levels along the chain. In that respect, the Prime Minister directed the Ministry of Agriculture Animal Industry and Fisheries to urgently formulate a National Coffee Policy (NCP). In response to that directive, on 14th August 2008, the then Minister of Agriculture Animal Industry and Fisheries, Hon. Eng. Hillary Onek chaired a meeting comprising officials from UCDA, NAADS, MAAIF, MoFPED, NUCAFE, NARO in the UCDA Boardroom to pave the way for the formulation of the NCP.
The process of formulating a National Coffee Policy involved hiring a consultant to engage all stakeholders across the Coffee Value chain collecting views and opinions which ideally would generate the issues papers which would further be evaluated to identify the direction within which a comprehensive and analytical draft National Coffee Policy would be created for the benefit of all the players in the coffee sub sector. The National Coffee Policy (NCP) was to be formulated in order to streamline and harmonise institutional set up and guide actions in the coffee sub sector.
The draft policy highlighted the most important aspect in the industry – RESEARCH that needs urgent attention. It is safe to say that this is one area where all stakeholders were agreeable. Currently, both UCDA, development partners and the private sector have joined together to tackle the problem affecting research and it is not a question of if the problem will be solved but rather a question of when.
The draft policy emphasizes that its vision, mission and objective is to promote farmer organisations and farmer ownership model with the view that farmers will produce, hull, process and export their coffee. While this objective is very important, we found it narrow for a National Coffee Policy because it is worth noting that under the current law the objective is allowed.
The draft NCP further claims that farmers are suffocated by the big coffee exporting companies which hull, process and export coffee. It also indicates that the hulling should be a preserve of the coffee farmers. This is not a statement of fact because most of the coffee hulling factories neither belong to farmers nor exporters but other business men within the value chain. In addition, there are farmer organisations that do all the above activities hence the question if some farmer organisations can produce, process and export then there is no reason why others cannot and failure to achieve the above success shouldn’t be blamed on the big coffee exporting firms.
The draft policy further alleges that Uganda Coffee farmers have been exploited for many years by big export corporations which have used their financial muscle to cripple them. This is another absurd point of information because UCDA figures clearly show that 70% of the export price goes to farmers and only 30% remaining goes to the other players within the coffee value chain.
It is worth noting that exporters have invested heavily in wet processing machinery and Coffee Certification and are working with coffee farmers who are certified by those organisations. If the exporting companies are to concentrate only at the export level and the farmer organisations do not have sufficient funding to acquire and maintain that machinery, who will operate it? How will the companies that invested in that machinery recoup their return on investment? All these aspects need to be carefully thought out before rushing to conclusions.
The institutional and functional framework for implementation of the NCP outlines NARO/NCRI, NUCAFE, NAADS/Local Government, UCDA and Coffee Development Fund [CDF] with MAAIF at the helm as the implementers of the National Coffee Policy. This leaves out many stakeholders like Uganda National Bureau of Standards, Ministry of Tourism Trade and Industry, Uganda Export Promotion Board, as well as the coffee exporters, roasters, primary processors and others.
At a meeting held on 19th April 2010, all stakeholders in the coffee industry along with officials from Ministry of Agriculture, Animal Fisheries and Industry [MAAIF] met to discuss the draft National Coffee Policy where many controversial matters were raised. It is believed that significant changes will be made that will create a better cohesion in the industry where roles of different key players will be identified.
In conclusion, the National Coffee Policy should consider all stakeholders’ views and considerations within the coffee value chain equitably as coffee is considered the most strategic cash crop of Uganda so that any errors made in the past are not repeated.
(See the sidebar for UCTF's response letter to the Ugandan government)
Response and Comments by UCF to the draft proposed National Coffee Policy (pdf, 30KB, new window)
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