Coffee Cooperative Improves Effectiveness

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Established in 1990, the Karagwe Development Cooperative Union (KDCU) serves 20,733 coffee farmers and their cooperatives to market their coffee. In recent years, KDCU has been less effective, not being able to compete with middlemen to obtain the best prices for members. Member cooperatives lacked confidence in KDCU to offer value to their farmers.

Lutheran World Relief (LWR) works with KDCU to strengthen its capacity to provide sustainable services to coffee farmers, restore relationships with member cooperatives, create profitable linkages with coffee buyers, and strengthen price negotiation skills.

RESULTS

LWR’s support allowed KDCU to improve its organizational capacities in the following ways:

Human Resources

  • Trained factory staff on more efficient equipment operations, resulting in a 115% increase in volume of coffee hulled in one season from 1.3MT to 2.9MT.

Service Provision

  • Sold coffee for 20,533 members in 2015 compared 18,049 members in 2014.
  • Offered ICT-enhanced extension services through 77 trained farmer facilitators to more than 5,600 farmers to support them in carrying out best coffee farming and harvesting practices.

Systems

  • Improved 36 KDCU member cooperatives to systematically negotiate sales, assess coffee quality and understand coffee certification processes.
  • Implemented an organizational revenue and investment strategy, resulting in receiving a loan of more than $2.5 million to purchase coffee from member famers.
  • Established transparent communications with member cooperatives on coffee prices, increasing the offer for advance payments for all coffee sold through KDCU, and making the price more competitive than the middle men.

Linkages

  • Entered into sales agreements with new buyers, including SUCCADEC Company, ECOM Agro Industrial Corporation and OLAM Tanzania.

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