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Shared Ownership for sustainable coffee business

Shared Ownership for sustainable coffee business. By Joseph Nkandu, Executive Director NUCAFE P.O.BOX 34967, Kampala Uganda Email: nucafe@ugandacoffee.org October 5, 2006 at Brussels, Belgium. NUCAFE and its Efforts.

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Shared Ownership for sustainable coffee business

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  1. Shared Ownership for sustainable coffee business By Joseph Nkandu, Executive Director NUCAFE P.O.BOX 34967, Kampala Uganda Email: nucafe@ugandacoffee.org October 5, 2006 at Brussels, Belgium

  2. NUCAFE and its Efforts Association of coffee farmers in Uganda with current membership of over100,000 coffee farm families • Vision: Coffee farmers profitably own their coffee along the value chain for Sustainable Production. • 600 farmer groups registered in 2005 • 21 farmer groups not yet registered • 104 coffee farmer associations by 2005 • 3 associations due for legal registration • Individual Farmers selling 2kg of kiboko at € 0.30 in 2004 • Organized Farmers marketed each kg of F.A.Q at € 1.00 in 2005 realizing a 200% income increase • Members grow both arabica and robusta • NUCAFE Ownership model

  3. ‘‘The Sustainable coffee Initiatives’’ • Fairtrade, • Organic, • Utz kapeh • 4Cs • and others These present both opportunities and challenges to farmers and consumers

  4. Opportunities-NUCAFE Uganda Experience • May establish farmer group - roaster relationship • Smallholder Farmers get organized • Market chain shortening • Credit and technical support • Collective effort for certification • Traceability enhancement if directly from farmers organizations • True representation of the product if directly from farmers • Quality and food safety enhancement if directly from farmers • Promotion of Social values and Environmental conservation • Can be used in advocacy work in comparison with conventional markets during crisis e.g. Oxfam 2001/2002 • Better Prices • Farmers able to obtain new skills and knowledge

  5. Challenges – NUCAFE Uganda experience • Lack of shared ownership over the initiatives by small farmers – Top down. • Prices overtaken by the events • *Semi-washed or pulped natural coffee is regarded as washed coffee. Source: FLO Germany

  6. Challenges - Continue • Require already well organized farmers • No value addition by smallholder farmers not sustainable • Compliance and Certification costs e.g. Kibinge • Creates captured market and dominance by traders • Not lived to original principles-Multinationals taking over • Fair-trade Market share for Uganda is only 1% • Divisionism among farmers due to quota system • Multiplicity of similar labels • Adulteration and misrepresentation • What is the Impact of all these labels to the small scale farmer? • Proof of having orders before certification • Even with certified farmer organizations, exporting is by intermediaries • No consumption of fair-trade coffee in developing countries • Duplication of standards • Impact and cost effectiveness of FLO Liaison Officers?

  7. Situation analysis and lessons learnt • Consultative processes with smallholder farmers • The fair-trade market is growing • Fair-trade is a good advocacy tool • Strong Farmer organization is key towards compliance and certification • A lot more still required beyond fair-trade for improving standards of living of small scale farmers • There are shortfalls which need redress– original principles

  8. Summary Conclusions • Fair-trade is very good at its advocacy role even for conventional coffees • Minimum prices and premiums are good for a small section of traders and farmers • Market share is too small to cause impact • Sustainable coffees do not address the wider picture for improved standards of living of farmers • Abuse and Misrepresentation of product label • Multinationals are taking over- Original principles of fair-trade are compromised • Multiplicity of labels is an added cost to the farmer • Farmer ownership in ‘‘sustainable coffees’’ still limited Then, are these coffees really sustainable?

  9. Way forward • Revisit the original principles of fair-trade • Smallholder Farmer mobilization and organization empowerment are important • Consolidate the competitive edge of fair-trade – advocacy role • Deliberate move by labeling organizations to actively involve smallholder farmers in decision making processes – having shared ownership • Market research and promotion beyond fair-trade is most fundamental to rural development • Cost-Benefit analysis of labels • Identify critical points of convergence and divergence of labels and harmonize • External support is needed for compliance and certification

  10. Finally • With Shared Ownership, we all win Thank you

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