More must be done to breathe life into Tanzania’s coffee industry

Dar es Salaam. While government’s strategies to revive the coffee sub-sector have shown promising results, stakeholders think more still needs to be done to get there.

The strategies include increased budget allocation, provision of subsidised fertilisers, distribution of high-yield coffee varieties, and strengthening financing.

Others are increasing coffee marketing and trading, addressing personnel shortages, and increasing the engagement of women and youth in the subsector.

The Vice President, Dr Philip Mpango shared the strategies in Uganda recently during the G-25 African Coffee Summit 2023, where he represented President Samia Suluhu Hassan.

In his speech during the event themed Transforming the African Coffee Sector Through Value Addition, Dr Mpango said Tanzania has continued to increase the agriculture budget for the third consecutive year.

“The government has rolled out a fertiliser subsidy programme and upscale supply, as well as the distribution of high yield Arabica coffee seedlings free of charge to farmers through the Tanzania Coffee Board (TCB) and the Tanzania Coffee Research Institute (TaCRI),” he said.

He said the government is strengthening research and development through TaCRI and carrying out climate change mitigation measures, including developing drought-resistant coffee varieties.

The Vice President told the summit taking place for the second time that the government has targeted a record distribution of 20 million seedlings per annum, noting that in the year 2022/23, over 17.8 million seedlings had been distributed to farmers.

The VP said climate change has detrimental effects on coffee production, including increasing incidents of pests and diseases and erratic rainfall that has made some areas unsuitable for coffee production.

He further said that the new coffee varieties will be released in the coming few years after field assessment trials have been completed.

Dr Mpango said that in tackling financial constraints, the government has recapitalised the Tanzania Agriculture Development Bank and increased collaboration with commercial banks.

The government has also re-introduced credit and export guarantee schemes in order to address shortfalls in collateral, according to the Vice President.

“It has also introduced a facility at the Bank of Tanzania to support affordable agricultural financing at low interest rates not exceeding nine percent,” he said.

“On the markets, we have introduced zonal coffee auctions, which allow Agricultural Marketing Cooperative Societies that used to be the sole buyers to compete with other market players and benchmark prices against world trends,” he added.

Dr Mpango said the government has scaled up the provision of extension services through local governments in collaboration with cooperatives.

The government has also introduced a year-long certificate course in coffee quality and trading through the Moshi Cooperative University, aimed at addressing the shortage of extension officers.

Regarding the involvement of women and youth in the coffee value chain, the government has recorded achievements in gender mainstreaming, including the introduction of the Tanzania Women in Coffee Association (TWCA).

He said TWCA has a responsibility to bring together women in the coffee value chain, encouraging and empowering them to grow their businesses.

“The government has established a programme to train the youth in coffee quality and trading for the purpose of building their capacity to participate in activities along the coffee value chain and fill the gap of skilled personnel in the subsector,” the VP told the gathering.

He listed the achievements recorded following the implementation of the above interventions as including increased coffee production by 19 percent, from 66,500 tonnes in 2018/19 to 82,500 tonnes in 2022/23.

Foreign exchange earnings from coffee exports nearly doubled from $245.6 million in 2022/23 compared to $123.2 million in 2018/19.

The area used for coffee cultivation increased from 218,966 hectares in 2018/19 to 265,000 hectares in 2022/23.

“As we convene here today, let’s renew our commitments to the transformation of African coffee, first by embracing value addition as our guiding principle,” he said.

“I call upon governments and the private sector to direct more energy and resources to acquire modern coffee processing facilities, roasters, and quality packaging,” he added.

Dr Mpango made a call to farmers to adopt friendly farming methods in order to enable the industry to leave a positive footprint on both the environment and the people it touches.

He reminded the secretariat of the Intra-African Coffee organisation to fast-track the development of the Africa Centre of Excellence in Tanzania as already agreed, assuring that the Tanzanian government would provide the required support.

Increased prices

Dr Mpango told the summit that the World Bank Commodity Outlook Report shows that world coffee prices maintain a long-term positive trend, with the price of Arabica coffee increasing more than twofold from an average of $2 per kilo in 2001/2002 to $5 per kilogramme in 2022/23.

Similarly, the price of Robusta coffee more than tripled from $0.7 per kilo in 2001/2002 to $2.4 per kilogramme in 2022/23.

“Such development in coffee prices culminated in $466 billion in traded value in 2021, with Africa earning only 0.5 percent of the total traded value,” he said.

“Despite the price advantage over the past 20 years, Africa remained at the tail end, accounting for a mere 12 percent of the world’s production, and the trend in the region has been steadily declining,” he said.

According to him, the above were reasons for the ground-appealing solutions to reverse the patterns and take actions to unlock the untapped potential in the coffee industry, capitalising on the rising world prices and expanding the regional market to nearly 1.4 billion people.

Coffee production trend

Tabling the 2023/24 budget in Parliament, Agriculture Minister Hussein Bashe said coffee production has shown a fluctuating trend in the last five years, noting that only 45,245 tonnes of the produce were produced in the 2017/18 season.

He listed recorded tonnes and their respective years of production in brackets as 68,147 (2018/19); 60,651 (2019/20); 73,027 (2020/21) and 65,235 (2021/22) lodged while the season was still underway.

Stakeholders want more intervention measures.

A coffee stakeholder from Moshi in Kilimanjaro Region who requested anonymity told The Citizen that authorities in the government should improve and increase coffee advertising.

“Coffee produced in neighbouring countries fetches higher prices as compared to coffee from Tanzania. This is despite the high quality of the produce from the northern regions,” said the source.

The source has it that the coffee board should improve stakeholders’ access to permits and ensure invoices are traceable by applicants, noting that more education is required to raise domestic consumption of coffee and citizens’ involvement in the value chain.

“Access to agriculture inputs should be improved, especially those distributed to farmers under government subsidy programmess. The formulation of policies, laws, and regulations should engage stakeholders at the grass-roots level in order to get better and more participatory documents,” said the source.

The coffee board should reduce the number of licenses issued to one player involved in different functions in the crop value addition instead of forcing them to secure one license for each activity, according to the source.

A coffee stakeholder from Ngara District, Mr Zephania Edward, said poor understanding of farmers on issues of value addition and low domestic consumption of the produce was a big challenge for the crop’s prosperity and sustainability.

Mr Edward said low domestic consumption affects price stability, especially in the case of shock waves in the international market.

“The sabotage among stakeholders should be addressed because there are people who are making efforts to ensure the crop doesn’t fetch better prices for their individual interests. Others have been engaging in incidents of conning coffee farmers through contractual agreements,” said Mr Edward.