A Complicated Cup – Coffee & Poverty in Uganda

Early morning contemplations on a complicated substance.

Early morning contemplations on a complicated substance.

I’ve been brewing (pun intended) over the subject of coffee in Uganda since the first morning I woke up and enjoyed a strong cup of Nescafe – coffee that was produced in Uganda, processed in the US and shipped back to Uganda for my own consumption.

I haven’t yet written anything about coffee, in part, because the subject is so vast. I’ve wondered ‘should I focus on the angle of international trade, smallholder farmers, ethical consumerism, or agroforestry?’ There are too many issues in my coffee cup, folks!

Coffee is a complicated substance. It’s not so easy to say, ‘coffee good, or coffee bad’ – what I’ve learned from Ugandans is that the ‘developed’ world’s favourite black gold has the potential to stimulate a positive and/or negative impact on the socioeconomic health of ‘developing’ communities and environment. Coffee for thought, anyone?

Robusta berries in Ntungamo, Uganda.

Robusta berries in Ntungamo, Uganda.

Coffee Production in Uganda

“Coffee or tea?”

The majority of Ugandans would respond: “Tea, please.”

Ironically, Uganda grows much more coffee than it does tea.

Accounting for around 20 – 30% of the foreign exchange earnings, coffee is the largest export crop in the country. The Uganda Coffee Development Authority (UCDA) reported that in 2013, 3.58 million bags were produced and valued at around $433 million dollars.

The most common coffee variety, Robusta coffee, consists of 90% of the country’s total production. Lake Victoria in central Uganda is believed to be the bean’s birthplace, as wild varieties of Robusta were discovered in 1860; however, coffee was only introduced as a cash crop for export during the British’s colonial administration in Uganda. The colonialists heavily influenced farmers, especially in central Uganda, to forgo growing food security crops, including sweet potatoes, bananas and cassava, for coffee.

And so coffee took root in Uganda…

Today, Uganda is the second largest producer of coffee in Africa after Ethiopia, the eighth largest producer in the world and the fourth largest producer of Robusta coffee.

Small farmers in Uganda whose average farm size ranges from 0.5 to 2.5 hectares produce 90% of the country’s coffee. Coffee beans must be removed from the fruit and dried before they can be roasted; this can be done in two ways, known as the dry and the wet methods.

The dry method is solar powered and doesn’t cost a shilling, which is why the majority of coffee farmers in Uganda opt for this simple method: pick the ruby red berries and dry for several days in the sun.

The wet method, whereby the berry’s pulp is removed from the bean before drying, requires processing machinery that most Ugandans cannot afford. The method also uses a great deal of water to remove the fruit, which can be scarce during the dry season. Not surprisingly, farmers get a better price for wet-method coffee than the dry-method.

How much does a coffee farmer in Uganda make?

How much does a coffee farmer in Uganda make?

After drying, most farmers in Uganda sell their beans to ‘middlemen’ who buy up truckloads and take the coffee from farm to primary processing plants. How much do farmers make? One farmer in the Ntungamo District reported that for one washing basin filled with dried beans (about 8 kilos), he earns 30,000 Ugandans shillings or $12 US dollars or about the equivalent of two specialty coffees at Starbucks or Second Cup. Hmm…

The value of coffee increases as it moves through the stages of processing: harvesting, drying, hulling, selecting and filling bags until it’s ready to be exported; but farmers rarely participate beyond picking berries and fail to get a bigger share of the acquired value.

Home-roasted beans in Kabale, Uganda.

Home-roasted beans in Kabale, Uganda.

To Roast or not to Roast – That is the Question

Despite the fact that Uganda is one of the world’s leading coffee producers, they have very limited capacity for processing, roasting and marketing coffee internationally, which explains why most of the coffee is exported in the form of raw beans.

If you have ever drunk roasted coffee in Rwanda and said aloud, ‘Mmm, good Rwandan coffee’ there’s a pretty good chance that coffee was actually grown next-door in Uganda and, of course, the same can be said about coffee drunk in Europe and North America.

In recent years, a Ugandan businessman opened the country’s first roasting factory, Good African Coffee. Imagine, after 100+ years of growing coffee and Uganda is finally roasting coffee on a commercial level and marketing their product abroad. What took them so long?

Post-independence, Uganda’s 40-year legacy of weak government, endemic corruption, Idi Amin, bush wars and conflict, etc. can certainly explain a contemporary problem, or two today in the country. But fundamentally, the root of the issue grows much deeper.

As my friend and elder mentor, Rwakatunga Caleb, a Bakiga man with a 30-year history working in rural agriculture development in Uganda, often exclaims:

“The simple truth is that Uganda was colonized to provide European countries with access to raw materials. Developed countries have given us billions of dollars in aid money. But they would never give us money to build a processing factory – why? – Because it would take away jobs and profit from ‘developed’ countries.”

Let’s take a quick look at the top four coffee importers in the world. They are the United States, Germany, Italy and Japan – all countries we could call ‘developed’ (albeit not all immune from economic recession and instability).

The United States spends an annual average of $4 billion dollars to import raw coffee to quench the thirst of the country’s coffee industry; an industry with octopus-like tentacles that stretch from processing, roasting and packaging to creating concentrates, extracts and flavorings to serving steaming cups of coffee at cafés and restaurants.

The US coffee production industry produces around $9 billion dollars in annual revenue and employs 12,601 workers across 319 unique businesses. (This number, by the way, doesn’t include the country’s share of baristas, servers and Starbucks cashiers).

Here’s where I’ll remind you that Uganda earned only $433 million dollars in 2013 from producing the raw coffee that is supporting a major profitable industry in the US. Meanwhile, in 2013, an estimated 62% of Ugandan youth were unemployed.

Coffee is the world’s second most valuable traded commodity, behind only petroleum, so the world’s largest coffee processors are going to be extra cautious about whom they help and certainly not people, or businesses in the countries where coffee is actually produced.

That helps explains why there is only one coffee-roasting factory in all of Uganda and it’s a fundamental part of the reason (amongst many others) that Uganda ranked in the lowest category – 161 out of 187 countries – on the Human Development Index (HDI) in 2012. The HDI is a way of measuring development by combining indicators of life expectancy, educational attainment and income into a composite index.

The US ranked 3 out of 187 countries.

Does coffee production increase the quality of life for small farmers in Uganda?

Does coffee production increase the quality of life for small farmers in Uganda?

To Be a Coffee Farmer in Uganda: Coffee as a Cash Crop

Is growing coffee in Uganda a lucrative trade? Can growing coffee increase women’s health? What about fair-trade coffee? How fair is it?

Of course, it depends how coffee is grown. There’s often a certain aid assumption that moving away from subsistence agriculture (growing food crops for household consumption) to invest in cash crop agriculture improves a family’s quality of life. With coffee production in Uganda, that couldn’t be farther from the truth. Take a look:

One, coffee farmers have absolutely no control over the global food economy and the fluctuating prices they earn for their coffee beans.

Two, coffee production requires considerably more financial inputs and risk, particularly if the farmer is choosing to grow using synthetic fertilizers and chemical pesticides. Coffee is also a water-intensive crop: it’s thirsty! Most of the coffee production in Uganda is rain-fed; and investing in irrigation equipment is expensive and unrealistic for most.

Three, if market prices for farmers is low, farmers can’t eat coffee. They can eat sweet potatoes, cassava, beans and groundnuts – but not coffee! What they earn from coffee on the market may not guarantee that they can buy enough food for consumption because – guess what! – Farmers have zero control over the cost of food on the local market, as well.

Four, organizations like Oxfam International are also pointing out the obvious, that climate change effects (decrease in rainfall and increase in global temperatures) are going to have a major impact on the flowering and ‘filling’ (ripening) of coffee berries.

As the saying goes, best not put all your coffee beans into one basket!

A recent study on the health outcomes of women growing coffee for cash-crop economy versus women growing food crops, concluded the following:

“…Despite having higher incomes than their food producing counterparts, the evidence showed that women who are producing coffee in Uganda as an export commodity cannot rely on the income from their crops to guarantee their health and nutritional wellbeing, and that the income advantage gained in coffee-producing households has not translated into consistently better health or food security outcomes.”

Coffee intercropped with bananas and cassava.

Coffee intercropped with bananas and cassava.

Coffee on a Mixed Farm

On the other hand, taking an agroforestry approach to growing coffee in Uganda can yield positive results for small farmers.

Agroforestry is as it sounds: growing food crops with tree crops, including coffee. Farmers can utilize the understory or the over-story in a field of coffee to grow staples, including cassava, beans, maize, groundnuts, vegetables and bananas.

One study shows that growing coffee and bananas together (two of Uganda’s most common export crops) or ‘intercropping’ is “much more beneficial than banana or coffee mono cropping” because the bananas provide shade and organic leaf mulch to the coffee. Shade-grown coffee requires much less water than a monocrop of coffee.

The grandparents of my fiancé Atayo have a small plot of Robusta and Arabica coffee on their mixed farm in the Ntungamo District. His grandfather is an innovative, hard working man – now in his seventies, but still swinging the hoe! He intercrops cassava and bananas with the coffee. He uses manure from the rabbits and goats to pile around the coffee trees; and he also dug two irrigation trenches to slow the run of rainwater along the slopes.

Biannually Atayo’s grandparents sell to the ‘middle-people’ who show up in Ntungamo with big trucks. They’re happy with the price they get for their beans, but fortunately they aren’t dependent on the coffee money to purchase food because they grow plenty cassava and maize and groundnuts, and supplement their family’s diet with rabbit and green vegetables.

How fair is Fair-Trade?

How fair is Fair-Trade?

Fair-Trade or Free-Trade

This is a big issue in everyone’s coffee cups. I’m not going to take the deepest plunge in exploration, but I want to raise the question: just how fair is the Fair-Trade movement?

Ugandan journalist, Andrew Mwenda, writes:

“I have always had a problem with fair-trade. All countries that developed through trade have done so by producing and exporting high value products at the most competitive price. Some have done this through purely market mechanisms, others through deliberate strategic interventions in the market.

Why then should Africa’s “success” at trade come as a result of the kindness of consumers in the West, not the innovation of our firms and farms?” And factories, to be certain.

Mwenda’s opinion piece stems from a recent study by the School of Oriental and African Studies (SOAS) in London that found that Fair Trade agricultural workers (particularly farmers without land) often earned lower incomes.

“People living in ordinary rural communities enjoyed a higher standard of living than seasonal and casual agricultural workers who received an apparently subsidized wage for producing Fair-trade exports…[and] the poorest (typically wage workers), often lacked access to schools, health clinics, improved sanitation and other social projects, even when they had worked on accredited processing stations or for compliant producers. (May 2014, The Economist).”

The Coffee-Poverty Trap

My friends in Uganda often say to me, “Africa needs capital, not aid money.”

There is potential in Uganda for building roasting and processing factories. There’s certainly no shortage of university-educated entrepreneurs who are eager and capable. But the question, of course, is capital. Ugandan financial credit and lending businesses pack a punch to the dreamer, charging 35-45% interest, making it hugely impossible for most Ugandans.

Why should Uganda remain a producer of raw materials? Why should Ugandan farmers receive a pittance – chickenfeed, really – for their coffee beans and feel satisfied when billion, trillion dollar industries are built off the back of their immense efforts?

There is, fundamentally, nothing ‘fair’ about Fair-trade. What would be fair is giving Ugandans a helping hand up to produce and process their own coffee, so that they, too, can access a much larger piece of the coffee pie that has benefited the developed world.

Uganda's first coffee roasting & packaging company.

Uganda’s first coffee roasting & packaging company.

What’s the Way Forward for Ethical Consumerism?

The debunking of ‘Fair-trade coffee’ puts me and you and the entire world’s coffee drinkers (most densely populated in developed countries) in the epicenter of the coffee conundrum.

Should we give up our favourite addiction altogether? Not exactly.

But if we really give a damn about poverty in Africa, or the well being of the world’s farmers who produce what we eat and drink, then we need to push for a paradigm-shift in the global food economy. That sounds complicated. It is complicated. We need to stop being so naïve that we can change the world with a $7 coffee. It’s more complicated than consumerism.

For starters, you can read about the story behind Good African coffee, whose founder, Andrew Rugasira, started Uganda’s first coffee processing and packaging company in 2009, and you can look for these locally grown and locally produced products.

Coffee producers need a paradigm shift in the coffee economy.

Coffee producers need a paradigm shift in the coffee economy.

“Making your voice heard by your local supermarket is critical,” says Good African. “So please, write to them and let them know that you would like to see Good African products in your local supermarket. Click here to download a sample letter to your supermarket.”

Poor countries like Uganda have the right to their own wealth of resources, including coffee, sugar, tropical fruits, and the many raw materials that have historically made the rest of the world wealthy. If we want to see real change, we need to invest capital, not only aid and development assistance, in Africa and the “developing” world.

Read more about Andrew Rugasira’s inspiring story – check out his book: A Good African Story – How a Small Company Built a Global Coffee Brand.

-Trina

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