Changing farmers’ fortunes through value addition

CNN African Voices

Kenyan farmers have for long decried meagre returns from their coffee, despite the agricultural commodity fetching record-breaking prices in the international markets.

Little returns for the country have been due to little or no value addition, with Kenyans exporting the commodity in its raw form, while roasters and other value chain players – mostly in the more developed markets – continue making a killing from the produce.

Kenyan coffee is highly valued globally, fetching high prices in the retail market and also used in blending other lesser quality coffees from other parts of the world.

While Kenyans farmers regret failure to add value to their coffee, their neighbours across the border are making a killing from the crop.

About 14,000 smallholder coffee farmers have made efforts to add value to their coffee before exporting. The result is that the product by the Ugandan farmers is increasingly becoming a popular brand in coffee drinking markets including Great Britain.

Value Chain

“Every society and economy that’s prospered has done it through their own hard work, ingenuity, dedication and commitment. Not through charity, not through handouts, and I think that’s a powerful message and it’s a powerful model. It’s not new, but I think it’s one that resonates with consumers who are willing to interact with products like that,” explained Andrew Rugasira, a Ugandan entrepreneur and founder of Good African Coffee.

Over the last nine years Good African Coffee says it has built a network of more than 14,000 coffee farmers, who are organised into 280 farmer groups.

Rugasira added that Africa has a lot of potential but the potential can only be realised through empowerment.

“(It’s) about empowerment and it’s also about ownership,” he told CNN African voices.

He reckons that “It’s about owning the value chain, growing the coffee, processing it at source and it’s about exporting a finished product”.

The company is the first African-owned coffee brand to be available in British supermarkets, has also helped local farmers to set up several savings and credit cooperatives. “We needed to change that … and through trade we could bring prosperity to our farmers and their communities,” said Rugasira.

The trained economist says he devised a business model that encouraged local farmers to sell their beans to him at a fair price.

His company would then roast, package and brand the final product, whilst the profits would be shared equally.

Solutions

Rugasira recalled his first meetings to convince the farmers in Uganda’s Kasese District.

“The hard part was saying, ‘look, I think as Africans we need to begin to look at ourselves as a solution to some of these problems of systemic poverty and underdevelopment. We have blessed soils, you guys have a commodity which is of great value.”

He told the farmers his firm will pay them a premium price if they §partner with the organisation.

“We can also add value to your knowledge; we can help train you; we can set up co-ops and we can really work together and begin to own the value chain, which is historically being controlled outside the producer country.”

Currently, Good African Coffee retains the value, which means they can employ people, pay taxes, and prosper farmers and their communities.

“And that’s the only sustainable way in which societies have prospered - by moving from low-value agriculture into high-value manufacturing industrialisation.”

— Additional reporting by Macharia Kamau