Coffee prices rise 30%
Oct 19, 2005
By paying farmers a price 30% more than the going rate for coffee, the Warehouse Receipt System will eliminate middlemen and improve household incomes.
By Charles Bwogi
By paying farmers a price 30% more than the going rate for coffee, the Warehouse Receipt System will eliminate middlemen and improve household incomes.
Under the system, a farmer deposits his produce in a gazetted certified warehouse and gets a receipt with details of the quality and quantity deposited.
The receipt can be used to look for buyers and as collateral security for getting a loan from a bank.
The pilot project in eastern Uganda, which started in August, has so far yielded over three tonnes of parchment (processed coffee) since the beginning of the Arabica Coffee harvesting season late last month.
The season is supposed to end in December.
In western Uganda where the first pilot project was launched in April, five tonnes of parchment were raised.
Clement Bweli of Kahitulwa Growers Cooperative Society in Mbale, said, “The warehouse system helps us know the intrinsic quality likely to come out of the coffee. That helps us determine how much to expect from the coffee.â€
He said initially, traders had been paying farmers less, saying the coffee does not meet minimum standards like the required moisture content.
Bweli said coffee with a low moisture content fetches a higher price.
He said the traders often manipulate the results by reporting a higher moisture content in the coffee and pay less for the produce.
Under system, a farmer gets an independent quality analysis for his/her coffee from an autonomous warehouse operator, COTECNA, a Swiss-based company.
The warehouse also grades the coffee and takes samples to the Uganda Coffee Development Authority (UCDA).
The UCDA tests the coffee to determine the quality after which all the results are displayed on the receipt given to the farmer.
Fred Mwesigye, the national coordinator of the system, said recently, “The system is among ways to help farmers move higher on the value chain to enjoy better prices. With time, we want organised groups to start exporting independently.â€
Mwesigye was addressing coffee farmers in eastern Uganda recently.
He said in western Uganda, farmers’ groups got an average of 30% above the going price for coffee when they brought the produce to the commodities exchange during the last harvesting season.
Mwesigye said when traders go to the farmers residences for the produce, they discount transport and other costs from the price they give to the farmers, hence paying lower prices.
He urged the farmers to form organised groups to raise enough quantity, which can be stored in a warehouse.
Mwesigye said the organised groups would also enable the farmers transport their produce to the warehouses.
Apollo Kamugisha, the assistant coordinator of the system, said, “It is meant to bring on board all commodities that can be “warehoused.†We are working on the maize and beans initiative.â€
Kamugisha said the system would also put in place an information system to help farmers access market prices to enable them make information decisions on when and who to sale to.
The information system will be availed using mobile phones by sending short messages (sms) of world market prices.
Warehouse operators will also pin up the latest prices.
The system has been successful in Tanzania where the farmers are earning more than their Ugandan counterparts. They embraced the system five years ago.
By paying farmers a price 30% more than the going rate for coffee, the Warehouse Receipt System will eliminate middlemen and improve household incomes.
Under the system, a farmer deposits his produce in a gazetted certified warehouse and gets a receipt with details of the quality and quantity deposited.
The receipt can be used to look for buyers and as collateral security for getting a loan from a bank.
The pilot project in eastern Uganda, which started in August, has so far yielded over three tonnes of parchment (processed coffee) since the beginning of the Arabica Coffee harvesting season late last month.
The season is supposed to end in December.
In western Uganda where the first pilot project was launched in April, five tonnes of parchment were raised.
Clement Bweli of Kahitulwa Growers Cooperative Society in Mbale, said, “The warehouse system helps us know the intrinsic quality likely to come out of the coffee. That helps us determine how much to expect from the coffee.â€
He said initially, traders had been paying farmers less, saying the coffee does not meet minimum standards like the required moisture content.
Bweli said coffee with a low moisture content fetches a higher price.
He said the traders often manipulate the results by reporting a higher moisture content in the coffee and pay less for the produce.
Under system, a farmer gets an independent quality analysis for his/her coffee from an autonomous warehouse operator, COTECNA, a Swiss-based company.
The warehouse also grades the coffee and takes samples to the Uganda Coffee Development Authority (UCDA).
The UCDA tests the coffee to determine the quality after which all the results are displayed on the receipt given to the farmer.
Fred Mwesigye, the national coordinator of the system, said recently, “The system is among ways to help farmers move higher on the value chain to enjoy better prices. With time, we want organised groups to start exporting independently.â€
Mwesigye was addressing coffee farmers in eastern Uganda recently.
He said in western Uganda, farmers’ groups got an average of 30% above the going price for coffee when they brought the produce to the commodities exchange during the last harvesting season.
Mwesigye said when traders go to the farmers residences for the produce, they discount transport and other costs from the price they give to the farmers, hence paying lower prices.
He urged the farmers to form organised groups to raise enough quantity, which can be stored in a warehouse.
Mwesigye said the organised groups would also enable the farmers transport their produce to the warehouses.
Apollo Kamugisha, the assistant coordinator of the system, said, “It is meant to bring on board all commodities that can be “warehoused.†We are working on the maize and beans initiative.â€
Kamugisha said the system would also put in place an information system to help farmers access market prices to enable them make information decisions on when and who to sale to.
The information system will be availed using mobile phones by sending short messages (sms) of world market prices.
Warehouse operators will also pin up the latest prices.
The system has been successful in Tanzania where the farmers are earning more than their Ugandan counterparts. They embraced the system five years ago.