A new day for Rwanda coffee cooperative

by George Kagame

Over the last dozen years, the view from John Gahene’s small coffee garden in the lush emerald-green hills of southwestern Rwanda has changed. After the 1994 Genocide, it was a site of devastation, chaos and abandonment. And, five years ago, when worldwide coffee prices spiraled downward, his neighbours were uprooting their coffee trees and planting quick-growing food crops to survive. It was “naked”, he says, “the grass was not there anymore, it dried because of the very hot temperatures.”

But today, Gahene has combined forces with over ten families and formed a cooperative known as Association for the Promotion of Coffee Growing and Washing Stations (APCDKA). The co-operative leased land from the district and got a donation of coffee seeds from coffee company OCIR Café. It also got a loan from Rwanda Commercial Bank (BCR) to cover over half of the cost of the project, enabling them to start APCDKA. The association employs over 100 people when there is a lot of activity.

Five years ago the cooperative set about clearing the 55 acres of land leased from Rutobwe sector authorities. They planted Arabica coffee bm 139 type, a high quality coffee bean, and come April 2007, the farmers are expecting 200 tonnes of processed coffee from their farm.

Seen from afar the coffee plantation occupies three hilltops, a new building that will work as a warehouse and a coffee washing station next to the warehouse. The cooperative has bought a generator as well to run the washing station, and built five large water tanks to trap rain water. Niyonsaba, the chairman of the cooperative, says, “We face water shortages; you see most of our water is harvested from the rain, which is very unreliable.” He appealed to the government to extend water services to the area.

They are not, however, sitting back and just wishing. With the help of the district authorities the farmers have managed to set up a water project to pump water from the Rwasirusha River. However, they complain that the cost of a motor, pipes and other necessary equipment is high. “But we are confident very soon we shall overcome that too,” says Niyonsaba. He continues, “The coffee farm has over 75,000 coffee plants that will produce over 200 tonnes of processed coffee from our own washing station.” When the coffee is harvested the co-operative will pay back the BCR loan.

David Kuwana, managing director of BCR says, “The bank is assisting farmers because the sector is important to the country’s future. We are ready to finance the coffee sector because it is very big, so we have to make a contribution and get some of the business there too. BCR has a lot of money ready to finance Rwandans improve the quality of their coffee, mainly by providing farmers’ cooperatives and small entrepreneurs with financing for washing stations and training in their use.”

“By improving the quality and size of their coffee farms, many of Rwanda’s 500,000 coffee farmers will at least double their incomes,” said another BCR executive. “Coffee will play a crucial role in the positive changes in Rwanda.”

As a sign of the changing times, a secondary school has been built nearby and the trading centre neighbouring the farm is bustling with activity. “Our coffee gives us hope for a better future,” cooperative member Bora Nyampundu says.

The farmers have identified through OCIR Café that coffee from Rwanda has a guaranteed market in the US, Europe and the Middle East. Coffee prices on the international market are currently three times higher than five years ago. The Rwandan coffee sector has enormous potential to create a dynamic and prosperous rural economy through the pursuit of extreme-quality specialty coffee for the US and European markets. Demand and prices remain relatively high on the specialty market even when conventional coffee prices dip. Rwanda’s one billion coffee trees have the potential to generate over $150 million in annual foreign exchange earnings.

In addition, when farmer-owned cooperatives sell directly to American buyers, approximately 80 per cent of the total gross amount returns to the rural communities. As such, this sector has the power to fully drive the rural economy of Rwanda, empowering the population, creating employment and generating increased revenues. These are key elements for Rwanda’s continued stability, peace and welfare. The specialty coffee market is a $20 billion per year industry in the US alone. Growth is estimated at 10 per cent annually. This industry is here to stay and has enormous potential to dramatically change the livelihoods of millions of poor rural families.

BCR’s Kuwana however says the bank encourages its members to form cooperatives “because cooperatives also provide their members with social support; But in the long run we encourage them to move towards creating limited companies with professional managers because that way it would be very easy to have lasting relationships. But at this level we are starting with mainly cooperatives.”

Generally, cooperative members share 70 per cent of the profits among themselves and reinvest the remainder in the cooperative for management, marketing, equipment, training and other expenses. Cooperative members are able to sell directly to the roaster, cutting out brokers and wholesalers, and learn about buying, selling and bookkeeping in the process. The cooperative targets growing organic coffee in the near future.

New Times