Uganda has registered a record amount of coffee exports in a single year, raising hope that the government strategy to raising household incomes is bearing fruit.
The Ministry of Finance says the country exported 5.06 million 60kg bags of coffee during the just concluded 2019-2020 financial year. In other words, Uganda exported about 303,000 metric tones of coffee during that period.
The ministry says that Uganda’s June 2020 coffee export figures represent an 84percent rise in coffee from the previous year.
“Uganda’s coffee export performance in FY 2019/20 set an all-time new record of 5.06 million 60kg bags, an increase of 84% over the first decade of Vision 2040. Export earnings also reached an all- time new level of US$ 494 million,” said the ministry.
The increase is being attributed to favorable weather experienced during the last year.
But it could also be due to the fact that the government’s effort to boost coffee production through distribution of free planting materials, is bearing fruit.
President Museveni named coffee as one of the 14 commodities identified by President Yoweri Museveni to boost Uganda’s economic transformation.
This notwithstanding, research shows that Ugandan coffee farmers still get a fraction of the value of their coffee when it’s sold by traders and middlemen on the international market.
A recent report by a Kenya organisation Selina Wamucii estimated that Ugandan coffee farmers get about 10% of the value of their coffee when sold as roasted to consumers in developed countries. In dollar terms, the organization says Ugandan farmers loses USD229.7 million annually.
The Organisation blames exploitation of the African coffee farmers on wrong pricing methods.
John Oroko, the CEO of Selina Wamucii argues that: “The only feasible solution is the establishment of a quota-based, International Coffee Agreement, that sets export quotas and helps steer the price and makes it possible for farmers to live from the proceeds of their hard work,” says Oroko.
“If Africa wants to bring to an end the exploitation eating away her coffee farmers, the global trading rules for coffee will have to be changed through a pro-farmer political framework. And if this cannot be achieved within the confines of the World Trade Organization (WTO), then Africans are better off looking up to OPEC for inspiration and executing a Pan Africa Coffee Agreement that doesn’t fatten a few while sucking the life out of farmers. Anything else is pure tokenism that seeks to buy time.” concludes Mr. Oroko.
But the strategy being pursued by the Uganda government to overcome the loss of revenue, appears to be different, judging by comments by the Minister of agriculture Vincent Ssempijja.
Ssempijja told Parliament during a recent debate on the Coffee bill, that the government intends to put in place mechanisms by which producers sell their coffee directly to the consumers.
He argued that by registering coffee farmers, as is proposed under the coffee bill the government seeks to establish a tracking mechanism that will allow for monitoring of quality along the entire value chain.
Uganda is the second biggest coffee exporter in Africa next to Ethiopia which exports about 380,000 metric tones. For Uganda however, poor branding, low or total lack of value addition and poor handling are cited as some of the majors obstacles to greater access to better markets.