Improving Institutional Capacity:

Strengthening Farmer Organizations in the OIC Member Countries

needs of its members. The challenge for the future will likely be in ensuring continued turnout

and participation as Kitenge DC expands.

Challenges of the Kitenge DC

Its main weaknesses are in the areas of strategic planning and input provision. Regarding the

former, Kitenge DC has a number of long-term goals, including expansion of processing,

logistics, and storage capacity but these goals have not been committed to paper or planned

formally, which may hinder achievement. Per the latter, greater input provision is an

acknowledged goal for the organization, which is currently inhibited by its financial resources.

Broadening the revenue base and/or building greater links with input providers and local

government may solve these issues.

Additionally, Kitenge DC is challenged by the practice of side-selling, where members sell

coffee to middlemen and external traders in exchange for cash at the farmgate. While side-

selling prices are 10% lower (or more) than members receive through Kitenge DC, the cash in

hand (as opposed to after marketing season ends) is difficult for many to resist. While UCFA

views free choice in selling as an important principle of accountability, too much side-selling

weakens Kitenge DC’s ability to fund training and to negotiate favorable terms with large

buyers. In response, Kitenge DC encourages cultivation of diverse crops to relieve day-to-day

income pressure and also attempts to improve access to short-term credit for its members.

However, high interest rates make this latter solution a continual challenge.

3.1.2.

Policy environment

The Ugandan coffee market is now characterized by open competition and complete

liberalization. This is a very dramatic change from the pre-1991 cooperative era when all

coffee was marketed by cooperative unions and the parastatal Coffee Marketing Board (CMB)

at fixed prices largely divorced from world price movements.

In this era, primary producers

received small shares of export prices (less than 15% some years), and payment was

frequently delayed.

After legislation ended the role of the CMB in 1991, farmers were able to sell directly to traders

and on to international buyers, and the share of export prices received by primary producers

rose quickly to 70-85%.

However, as the CMB era ended, existing cooperative structures

largely collapsed and coffee production declined significantly (even in years when

international prices rose). Following particularly sharp declines in the early 2000s, new types

of farmer organizations were established perforce to improve production and ensure the

industry’s sustainability. UCFA was one such organization and it was explicitly organized

around private-sector principles with the goal of financial sustainability and responsiveness to

members. NUCAFE, another FO alliance broadly similar in form and size to UCFA, was founded

around the same time, again on a private-sector model in a conscious break with the

cooperative era.

In tandem with liberalization, the government set up a new body responsible for regulation

and promotion, called the Uganda Coffee Development Authority. There is also a directorate of

Findings in this section are drawn primarily from interviews with leadership of the Uganda Coffee Farmers Alliance,

Kitenge Agali Awumu Coffee Company, and National Union of Coffee Farming Enterprises (NUCAFE).

Masiga, Moses and Alice Ruhweza, “Commodity Revenue Management: Coffee and Cotton in Uganda,” IISD, 2007.

Baffes, John, “Restructuring Uganda’s Coffee Industry: Why Going Back to the Basics Matters.” Washington DC, The World

Bank Group, 2006.