Tanzania government plans major coffee trading reforms

Mbinga. Tanzania government is planning to reform the coffee trading system in effort to ensure farmers get more benefits.

The Minister for Agriculture, Mr Hussein Bashe, said the current system is “exploitative that increases poverty among the crop growers.”

Mr Bashe who was speaking in Mbinga on Friday September 20, 2024, revealed that the informal coffee trading, famously known as Magoma, was illegal, directing the district authorities to confiscate and auction the produce bought under that setting.

"These reforms will be implemented after the positive outcomes when similar measures were to the produce grown in Kagera Region as well as cocoa cultivated in Kyela District, Mbeya Region," he said during his ongoing work visit to inspect the execution of development projects under his docket.

Mr Bashe is touring districts of Ruvuma Region ahead of President Samia Suluhu Hassan's tour of the region slated to commence on Tuesday, September 24, 2024.

He said the reforms aim at transitioning to the online system that would enable farmers to see the competition through global buyers, therefore securing better prices that would transform their lives.

He said the intended reforms aim at benefiting coffee growers in Mbinga and Nyasa districts, as well as Songwe and Kilimanjaro regions.

He said government reforms significantly increased the price of coffee in Kagera Region from the previous Sh7,000 per kilo to the current Sh12,100 per kilogramme. The price of cocoa traded in Kyela District, Mbeya Region, also increased from Sh3,000 to Sh30,000 per kilo," he said.

“Perpetrators of Magoma coffee trading system should be charged with economic sabotage, seize and auction the produce. Generated money should be used to produce coffee seedlings to be distributed to farmers free,” he instructed Mbinga District Commissioner, Mr Kisari Makori.

Mr Makori, said the formed taskforce has confiscated 700 bags of coffee bought through an illegal system that denied farmers an appropriate price and government revenues.

Mr Bashe insisted that infrastructure should be prepared to allow online coffee trading through the Tanzania Mercantile Exchange (TMX) that would enable farmers to see all buyers worldwide and be part of the produce trading decision making.

Mr Bashe also directed coffee cooperative unions in the district to have clear explanations whenever they make decisions to secure loans from financial institutions to avoid putting a debt burden on farmers who are unaware of the utilisation of the loans.

“Coffee cooperative unions should review the Agriculture Marketing Cooperative Societies (Amcos) human resources to be certain of individual competences and prevent entering their respective unions into unpaid debts,” he said.

“The Agriculture Marketing Cooperative Societies (Amcos) membership system should be reviewed to eliminate membership fees because everybody engaged in coffee production is automatically a member who is supposed to contribute through deductions made when trading the produce," he said.

The Mbinga Coffee Curing Company general manager, Mr Festo Chang'a, outlined challenges facing the firm, including the insufficient coffee to meet the factory's installed capacity.

He said while the company processing capacity stood at 30,000 tonnes annually, the region's production never exceeded 25,000 tonnes per year.

“The shortage of storage facilities, and poor power supply force us to relying on generators, therefore increasing operation cost,” he outlined as challenges facing the company.

Special-Seats Member of Parliament from Ruvuma Region and the deputy Minister for Energy, Ms Judith Kapinga, said power woes in the district will be ended after the implementation of a project to construct substations.

“I promise to have the substation constructed after the completion of the project's first phase," she said, underscoring the increased power demand in the country.

Mbinga Urban lawmaker, Mr Jonas Mbunda, said the factory processed 10,000 to 12,000 metric tonnes of coffee per year, stressing that it operated under its installed capacity.

Mbinga Rural legislator, Mr Benaya Kapinga, said coffee auctions have attracted better prices to farmers, expressing worries if the offered amount would be sustainable for the benefit of farmers.