Success Story

Mary Msafiri (right) and other Mlimani Ng’arashi famers dry coffee processed at their Central Pulpery.

Although Tanzania has ideal conditions for growing excellent coffee, most of the roughly 30,000 metric tons of Arabica produced there each year is classified as “fair average quality” and sold at commodity grade prices. Prices in international commodity markets are extremely volatile – a major downturn, as in 2001/02, can prove disastrous for small farmers. Prior to joining KILICAFE, a TechnoServe-assisted coffee trade association, the farmers of the Mlimani Ng’arashi farmer business group were no exception. “In 1997, we sold more than 50 tons of [parchment] coffee,” recalls group manager Mary Msafiri. In 2001, we didn’t sell a single bag.”

Mlimani Ng’arashi is one of more than 100 KILICAFE farmer business groups in Tanzania that TechnoServe has assisted to improve quality, access specialty markets, and thereby benefit from price premiums of up to 70 percent. In doing so, TechnoServe and KILICAFE, with support from USDA, USAID and Swiss agency SECO, have played a key role in the Tanzania coffee industry, building a name for specialty coffee from Tanzania and helping 10,000 smallholders build confidence in the future.

TechnoServe began working in the coffee industry in the late 1990s, under a Food for Progress monetization program. With that support, it developed a strategy to help small farmers improve coffee quality and access new markets. Mlimani Ng’arashi first learned about the fast-growing specialty coffee market and how improving quality could improve farmers’ coffee incomes when a TechnoServe business advisor visited the cooperative, which is located in the Mbinga district, in late 2001. In 2002, the group began working closely with TechnoServe and joined KILICAFE (then known as AKSCG, the Association of Kilimanjaro Specialty Coffee Growers) the following year. In 2004, farmers at Mlimani Ng’arashi were assisted to install and operate a Central Pulpery Unit (CPU), which now processes more than 20 tons of parchment coffee a season.

Much of the group’s coffee is now sold directly to American specialty roasters. One of which, Peets Coffee & Tea, has developed a “Tanzania Kilimanjaro” brand using coffees purchased exclusively from KILICAFE. The result is clearly a win-win situation for both parties: producers receive consistently high prices and consumers receive consistent supplies of high quality coffee.

TechnoServe is causing similar results in other areas too. This season, KILICAFE sold 400 metric tons of clean coffee, almost one-quarter of its total volume, as direct exports to specialty coffee buyers. While most of the coffees were taken by the American markets, there was also demand for additional Mbinga CPU-processed coffees from European buyers.

TechnoServe has advised KILICAFE in developing a relationship with Starbucks Coffee Company by supporting Mbinga CPUs to comply with Starbucks CAFE (Coffee Agronomy and Farmer Equity) Practices and receive verification through an independent auditor. Twelve CPUs, representing more than 1,300 farmers, have undergone verification already, while KILICAFE intends to double the number of verified suppliers in 2007. “The benefits of transparency and social responsibility are obvious to farmers,” says Adolph Kumburu, Executive Director of KILICAFE, “so they’re willing to make the investment on their end. But the fact that Mbinga farmers are leading the way and selling to American specialty markets shows how far we’ve come – Mbinga used to be considered third-rate coffee.”

Another measure is sheer growth: KILICAFE installed 26 new central pulperies in 2006 with loans from Ecologic Finance, a nonprofit bank, and Taylor Winch (Tanzania) Ltd., KILICAFE’s exporting partner. This expansion brings the total number of KILICAFE CPUs to 55 and means that KILICAFE will have growing stocks of specialty coffee in the years to come. KILICAFE members produced nearly 1,500 metric tons in 2006, of which nearly half was processed through CPUs. KILICAFE sold about $3M worth of coffee in 2005-2006.

In addition to improving coffee quality and freeing families from the laborious task of home-processing, CPUs create new skills and economic opportunity in rural areas. TechnoServe-assisted CPUs paid more than $150,000 in wages in 2006 and have generated more than 500 new jobs since 2002. The CPU manager at Pendo, one of the newest groups to install a CPU in northern Tanzania, comments, “The CPU has created four full-time jobs at Pendo. We didn’t have jobs before so it’s given us income apart from farming.”

TechnoServe is now helping KILICAFE to strengthen delivery of its core services – finance and marketing links, CPU supervision and quality control – and build partnerships to help farmers tackle low productivity. “Most people see lack of fertilizers and market information as the first barrier to increasing farmers’ incomes,” says Kumburu. “With KILICAFE, we first had to create a marketing system that rewards quality. Then we had to get the quality. Only now are the incentives aligned to help farmers boost yields.” Sustainability certification and improving groups’ management and business skills are also priorities in ensuring that KILICAFE upholds buyers’ demands. “Growth is important, but it cannot come at the expense of quality,” Kumburu adds. “Our message to farmers is still the same: quality, quality, quality.”

This message rings true as TechnoServe continues advising KILICAFE and other clients in Tanzania and as it launches new coffee programs in neighboring Rwanda and Kenya.

USDA had a major role to play, in catalyzing the industry growth, via FFProgress support. TechnoServe is excited about the potential for regional replication. It is proud to be counted as a USDA partner in efforts to revive smallholder agriculture in Tanzania, and specifically, helping smallholder growers earn a decent living, and focus the market’s attention on the wonderful high-quality coffee that grows here. Nonetheless, our hope remains that one day farmers will prize their finest coffees as much as drinkers do.

Mary Msafiri, manager of Mlimani Ng’arashi, believes that this pride has begun to grow: “People have changed their minds about coffee,” she says. “People are certain now that they will have enough money to send their children to school and won’t need to sell a cow or food crops to get through emergencies. This brings families together – everyone gives a hand in producing coffee because they know that with good quality come good prices.”