KOLCAFÉ

Original project description

KOLCAFÉ is pursuing an innovative organic farming approach that is designed to increase coffee yields 3 to 5 times through application of manure-based compost, proper pruning and selective harvesting. KOLCAFÉ also integrates in its programme a marketing strategy with tailor-made microfinance. Coffee is the world’s second largest traded commodity (by value) after oil. Demand and prices are predicted to grow, primarily due to emerging middle classes in China and India. The programme will not only improve the quality and selling prices but will also maximise revenue through construction of value-adding infrastructure in the village.
The project will provide an increased and sustainable income base for the 263 farmers and their families who participate in KOLCAFÉ and also create 50 to 100 seasonal jobs. Infrastructural development and higher incomes will attract more commerce and social amenities thus improving living standards. Whilst increasing coffee-related income by 4 to 7 times, the project will develop farmers’ business skills and provide access to and understanding of international markets. The high quality microfinance facility will help improve fiscal management for all families.
Furthermore, organic farming practices will be applied to conserve water and to reduce the biomass loss. Soil quality will improve in the long run as a result of extensive manure-based composting.

Current project updates

Last updated: 10 October 2010

KOLCAFÉ Progress Report – mid-2010

The KOLCAFÉ project is managed by the Kolping Society of Tanzania (the KST) with assistance from VSO Tanzania (VSO) and the Tanzania Coffeee Research Institute (TaCRI). During 2009, 35 k USD of KST funds were spent on initial phases of the project in the first implementation location – the village of Nyamuhunga (total cost for 1 village has been estimated at 120 k USD). The following summarizes how this money was spent:
• 97% of planned volumes of manure were purchased to make manure-based compost to enrich the soil in which coffee plants are growing (a “keystone” strategy for the project). Unit costs were higher than budget for a variety of reasons which are now being analyzed so we can attempt to manage manure purchase and delivery in a more cost effective manner in future years. Farmers were trained in techniques for manufacture and application of manure-based-compost.
• Fabrication and delivery of raised drying tables to all farmers in the project has been completed. Use of these tables, instead of the traditional method of placing coffee on tarps on the ground, will result in improved product quality & price. These tables took significantly longer to construct than planned but costs were within budget. Our experience in this process will allow for more accurate planning for subsequent implementations.
• Pruning tools were purchased for all participating farmers. Farmers conducted field trials of the recommended tool set and decided only 2 of the 3 suggested tools were needed, resulting in a significant cost reduction compared to budget. Farmers were trained in proper pruning techniques by TaCRI Tanzania Coffee Research Institute staff.
• A high quality moisture meter has been purchased. Moisture content is a critical factor in determining product quality and hence price. Use of this meter will allow farmers to maximize product quality & price compared to traditional methods of assessing moisture content which involve analyzing the sound of shaken unhulled beans or biting beans to assess hardness.
• Preparatory work relating to the planned village bank or SACCOS was completed. This involved meetings with village farmers and regulatory authorities to ensure issues such as staffing, government approvals and location for the bank building in the village are well thought through before construction begins ( this facility, along with other value-adding infrastructure - warehouse and hulling/sorting/grading station - is contingent upon locating donors who wish to support the project).
• In 2009, about 1/3 of project participants sold their coffee to a “non-traditional” buyer (a local commercial coffee company) and, as a result, received an 11% price premium compared to those who dealt with the historical buyer. In 2010, virtually all farmers are planning to sell their product directly to international buyers at the Moshi coffee auction. A licence to take part in the auction process has been obtained from the Tanzania Coffee board.
As donor funds for value-adding infrastructure have not been obtained, the coffee farmer group decided to take a “cost of service” approach to prepare their coffee for sale to international buyers at the Moshi auctions. This will involve paying to have coffee hulled in a 3rd party facility, families sorting and grading their own coffee (using grading screens provided by the KST), then paying a commercial coffee company to manage auction logistics.
As a result of using this approach, the farmer group will be better positioned to manage their own facilities when donor funds are located to construct them.

In a more general sense, several issues have become apparent:

First is THE CHALLENGE OF MANAGING CHANGE. KOLCAFE represents a HUGE change for residents of the village of Nyamuhunga and, although the farmers are well organized and have been trained in mission-critical skills by the KST, people DO have a maximum tolerance for change. It appears the scheduling of certain project activities in the original plan exceeded this tolerance. A more reasonable phasing would have value-adding infrastructure built in the third project year rather than the second (as had been originally planned). The overall project profitability is so robust that this changed phasing will have only modest impact (perhaps extending payout by 6 months).

Second is the challenge of managing the business plan in light of the reality that A DONOR-SUPPORTED NGO HAS NO CONTROL OVER THE TIMING OF RELEASE OF FUNDS FROM DONORS AND WELL-WISHERS. Once again, the original business plan did not reflect this reality. It is clearly desirable to coordinate release of funds in the lead NGO’s budget cycle with demands of the coffee-related agronomic cycle, however this is not always possible for the KST. The net effect has been an approximate 6 month delay in application of manure-based compost and, in turn, on the associated improved coffee productivity. Once again, project profitability is not significantly impacted by the modified phasing.

As noted above, fundraising for latter phases of the project has been a challenge. It is hoped that the successes achieved over time in the field, combined with the enhanced credibility associated with winning a SEED award, will persuade “external” donors to support the KOLCAFÉ project.

Growth plans description

In the village of Nyamuhunga:
• Train farners on improved agronomic practices
• Purchase manure for making manure-based compost to enrich the soil (complete)
• For each farmer purchase high quality pruning tools and construct raised drying beds (complete)
• Implement the initial phase of the marketing programme
• Raise external funds to finance half the 50 k USD cost of constructingvalue-adding infrastructure in Nyamuhunga, purchase of related equipment and subsequent year’s manure purchases. The Kolping Society will cover the other half of project costs.
• Initiate the project in a 2nd and 3rd villages (contingent on external funding).

Current Needs

The critical external support required is:
• financial assistance for loans to farmer groups. These loans will be repaid within 5 years. At the end of the 5th project year donors can then choose to have their funds returned or allow those funds to be recycled into implementation in another village.

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