How a social scheme changed lives of Kigoma coffee farmers

Coffee is one of the Tanzania’s primary crops, representing about five per cent of total exports and 24 per cent of traditional cash crops. More than 90 per cent of local coffee comes from smallholders, going by reports from the 2013 National Coffee Conference.

The industry provides direct income to more than 400,000 farming families and also offers benefits indirectly to more than two and a half million Tanzanians.

Coffee farmers face challenges pretty much like other farmers in Tanzania. They include lack of proper training in agriculture, poor access to markets, unstable prices and inadequate inputs and capital. All these eventually lead to poor harvests.

Last year, Kigoma North MP Zitto Kabwe received an award as the first champion of social security due to his efforts to mobilise coffee farmers in his constituency to join the scheme through the National Social Security Fund (NSSF). This led to the launch of ‘Wakulima Scheme’ later in the year after more farmers showed interest to join.

The award was presented to him at the 7th East and Central Africa meeting on social security protection (Ecassa) policy making that was held in Zambia.

When it was first introduced in 2013, 750 farmers who were under Rumako Cooperative Society registered with the NSSF scheme.

Today, all the coffee cooperative societies in Kigoma North have joined the scheme -- and they benefit from low interest rate loans and health insurance.

Two years after Kigoma farmers joined the NSSF scheme, the farmers and their families have an entirely different story to tell.

According to Mr Josephat Komba, the Kigoma NSSF manager, the farmers in cooperative societies are highly motivated to access loans and medical insurance.

Recent statistics shows that 3,600 farmers have registered and thousands more are in the process of doing so.

Kigoma farmers have so far benefited from Sh4 billion disbursed to cooperative members in Rumako and Mawenyi. The loans are paid at nine to 15 per cent interest, which is lower than what commercial banks offer.

“Our focus is to make sure that all farmers form co-operatives benefit from the scheme,” says Mr Komba. “We are proud because many cooperatives are joining the scheme.”

Other farmers’ unions that focus on coffee farming and are in the process of qualifying for loans in Kigoma are Mawenyi, Nyalubonza, Nyakimwe, Mkibanda, Kalinzi, Mkigo, Kibigwa, Muhange, Manyovu, Kibigwa and Mkibanda.

This has motivated farmers working with other cash crops in Kigoma, and 13 tobacco farmers’ co-operatives have joined. The farmers contribute some of their harvests to the scheme.

“Last season, they contributed Sh200 from each kilogramme of coffee -- and some managed to pay two years’ contributions while others settled for three months,” according to Mr Komba.

But low education on the social security scheme is a major challenge. Farmers now consider the scheme as a form of banking where they can save their money, get loans and withdraw it whenever they want.

“The majority joined in order to qualify for the loans and health insurance, but they have never contributed,” Mr Komba added.

“But we have talked with their unions and discussed how they can fill the gap during the next harvest season.”

Training continues on social security schemes and this applies even to voluntary members who are not farmers but work in the informal sector.

Visiting coffee farmers

Seeing is believing. This reporter visited coffee farmers who are beneficiaries of the NSSF scheme at Matyazo Village under the auspices of Rumako Cooperative Society.

The two farms belonged to Mr Faustine Mahwaya, Ms Uwezo Wilson and her husband, Mr Ludick Julius. They are not far from each other and are also close to farms owned by those who are not beneficiaries of the social security scheme.

The loans have helped farmers transform their lives and look forward to the promise of a good harvest.

According to Mr Mahwaya, his one acre usually yields 540 coffee trees that produce about one tonne, but he is certain to double production with the next harvest. There are a lot of factors behind this growth, but the major one is access to farming inputs that he received after getting a loan, which means he can repay the money before its due date.

He adds: “Truly speaking, running a coffee farm for small-scale farmers is difficult because every step -- planting, treatment and fertilisers -- needs to be done on time, but it was not the case before because we did not have enough capital and everything depended on when you get the money.”

Mr Mahwaya, who is also among the farmers benefiting from the health insurance, says it has helped reduce the desperation when one gets sick in his family.

“I can now go to hospital with a little more cash than before because our hospitals are not well equipped, so I would buy some of the medicine myself,” he says, “but I can save because some lab tests, consultation and some of the medicine are covered by the insurance.”

Ms Wilson says that their two point something acres of coffee were dying before because it was difficult to manage them but, after getting a loan under the scheme, they have added new trees and their farm now has 3,000 trees of coffee.

Had the social security scheme been introduced early, she says, their lives would have changed for the better many years ago. They are now assured of getting more tonnes of coffee and the produce is in good condition.

The mother of two and second wife to Mr Julius said that they have also managed to pay school fees for their children in secondary school. “We are confident that the harvests will give us huge returns to not only pay a big per cent of the loan, but also pay the contributions for at least one year,” she said, adding that more of her neighbours are now motivated by the family’s progress.

Ms Wilson urges the security schemes to reach more farmers because they help transform lives.

Mr Juma Abdullah has not joined the scheme, but is hoping to do so now that he is convinced that they are not like other schemes that do not benefit farmers.

“I was worried and I said I would wait and see how this thing turns out,” he says. “I am impressed with the results and I am ready now.”

Challenges

Even as farmers turned out in big numbers to register for the schemes, many were also disappointed by the way the schemes operated. Rumako, which was the first beneficiary, said that despite the improvement of 255 farmers, the disbursement of the loans came a bit late.

According to Rumako Chairman Adriano Makusa, farming depends on the season and loans may be delayed—which will eventually lead to loan delays and even some of the farming processes. “But, the health insurance is also another major disappointment because more members have qualified but the NSSF officers who took our photos told us later that the photos got crushed, and they did not come back.

He added: “This discouraged the farmers because the two main things that they were attracted to were loans and the health benefit because it helps even when one doesn’t have cash, and now the members are accusing us, the leaders.”

The unions are also complaining about the high interest rates for the loans disbursed from the cooperative unions, but not those given to individual farmers. A sole farmer can get a loan at nine per cent interest rate, but the cooperatives interest rate increases to 15.86 -- slightly lower than the bank rate of 16 per cent.

Another challenge is the readiness amongst members in the cooperatives at first. Only 750 of Rumako’s 1,746 members have joined the NSSF scheme and only 255 qualified for loans. “But we are happy now because they have seen the transformation of our farms and we hope more will join in the next intake,” he says.

The chairman of Mawenyi Cooperative Society, which also benefited from the loan, says lack of good farming education from the agricultural extension officers was a major drawback. He believes they would have produced more if they had better knowledge of farming.

According to Mr Sengo Ruhagi Bikina, farmers continue producing using the experience they have and they lack the knowledge of modern farming methods. “We request the government to monitor this, because these officers are paid from our efforts and they don’t help us in any way,” he says. “We don’t even know what use they are to us.”

Mr Bikina also wants social security schemes to expand their coverage to the informal sector. “We are very sure to double our production this season from the 82 tonnes of last season,” he adds.

Also, the farmers want hospitals used to provide medical services improved so that they could all offer the services listed on the insurance package.

Satisfaction

The champion of the scheme, MP Zitto Kabwe, says he is impressed. After visiting the farms, he says, he has seen a clear difference between the beneficiaries and non-beneficiaries. He therefore concludes that more farmers could benefit along with those in the informal sector.

The MP adds: “I urge the NSSF to work on the challenges the farmers have raised because, as we know, these people don’t have a platform to speak from, and they end up complaining but no one listens. Working on these issues will encourage more people and, as they approach other sectors, they take it as a challenge to improve.

“But, I am generally happy. Had we started earlier, this effort would transformed many lives. And since they are the majority, we would have more rich people from this society (of farmers).”

One tonne of coffee, at Sh4,500 per kilo, could earn a farmer an average of Sh4, 500,000. From this amount, a farmer can contribute to the scheme for 10 months from the Sh20, 000 set contributions each month, which all farmers could then afford.