Thursday 29 June 2017

​Training smallholder coffee farmers in Rwenzori in financial literacy

Coffee is the main source of income for many smallholder farmers in Rwenzori region. The fertile hills of Rwenzori are conducive for Arabica coffee growing. However, many smallholder farmers are not benefiting much from the crop sales.
Consider this example, smallholder coffee farmers in Katebwa, Rwenzori sometimes exchange a basin full of fresh red coffee berries for a kilogram of goat’s meat. This arrangement is locally called “embene  yo mwani” loosely translated as a “goat meat exchanged for coffee berries”. Petty but scheming businessmen dealing in local coffee trade would kill a goat and sell it to meat-hungry smallholder coffee farmers. The trader usually asks for a basin full of fresh coffee berries for a kilogram of goat's meat. A basin of fresh coffee berries when dried gives 4kg of cleaned  (hauled) coffee beans. A kilogram of hauled coffee (husks removed) beans costs UGX6000. This implies that impatient and unorganized smallholder coffee farmers lose UGX24000 (aboust $7) in cash.

The trade in embene yo'mwana  can be categorized as unfair. Farmers in Rwenzori mountains should be sensitized about financial literacy so that they can develop a culture of saving and investment to benefit more from their farming. To achieve this, farmers have to be organized, and that's the main objective of this project.
Close to a million people live on the slopes of Rwenzori mountains in the Ugandan side. These people derive a livelihood from small scale farming with coffee being the main cash crop for many.
Arabica coffee contributes 15% of the coffee produced in Uganda. Most of the Arabica coffee is grown in the hills of Kigezi (South-Western Uganda), Mbale (Eastern) and Rwenzori (Western).
Smallholder coffee farmers in Rwenzori are not benefiting much from the sale of their coffee because they are largely unorganized. The middlemen (coffee brokers), local area coffee petty traders buy the coffee from the farmers at very low prices. Most smallholder farmers sell fresh coffee berries. This leaves them with little benefit from their coffee.
In addition, more farmers pre-sell their coffee berries while they are still green in the field. They have no financial literacy. The farmer is in constant need for cash yet he/she has less or no sources of income other than the coffee field. Given that coffee if harvest mainly once in a year the farmer will only get cash in the months when the crop is ripe. This makes the farmer prone to temptation of borrowing from the middlemen to sustain his household cash needs.
The cooperative societies that would be advising the farmer, bargaining for better market prices and organizing the smallholder farmers to produce high quality coffee, are non-existent in Rwenzori. Yet, having such and other farmer organization mechanisms would help the small scale farmer get better coffee prices and improve their livelihoods.
Justification for the project
Smallholder coffee farmers in Katebwa and Karangura subcounties in Kabarole district, Rwenzori region, Western Uganda, lose double by selling fresh coffee berries.  First they are given lower prices. Second they lose the coffee husks which would be used as manure in their coffee fields e.g. if the coffee is hauled by the farmers group, the husks can easily be given to farmers to use as manure. Secondly, the unorganized smallholder farmers have no power to negotiate for better prices.
Organize farmers in groups the aim is to create a cooperative, a coffee depot
Objectives include:
·         The objective of this project is to  organize farmers in groups; train smallholder Arabica coffee farmers’ groups  in good agricultural practices and financial literacy.
·         The expected outcome is that  this will in the end enable the farmer in Rwenzori mountains make informed financial decisions to improve their livelihood.
·         Empower farmers about coffee marketing and
·         Encourage adherence to quality control mechanism


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