How farmer group eliminated middlemen

Every morning the noise from Bukakimu’s coffee factory in Mitala Maria, Buwama in Mpigi District is deafening.

The machine
The dust rising from the black coffee beans twirling in the grinding machine only settles when the electricity goes off for an hour.
On an average day, if the machine grinds non-stop, 10,000 kilogrammes of coffee go through it.

A bulging sack of coffee beans is carried up on a wooden platform above the machine by two workers. They pour the coffee beans into the machine through a hole into the wood. The clean, split coffee beans (Kase) that come from the machine are collected in a white plastic sack placed at the outlet.

Out of the bulging sack, only a third of a sack of Kase comes out of the machine. The rest are coffee husks. The farmer who brought the coffee for processing asks the machine operator to bring out the moisture metre to test the moisture of the beans.

They prove to be very dry. “You know, I would rather bring very dry beans than bringing damp beans,” he tells the other farmers who have gathered around to advise him on how long he should dry his coffee beans.

The beginning
The coffee factory was built by the 1,296 members of Bukakimu. Six primary cooperative societies in Mpigi and Butambala districts joined together to form Bukakimu.

The cooperatives are, Kitakyusa Farmers Cooperatives Society Limited, BOPA Cooperative Society Limited, KOFA Cooperative Society, Mutubagumu Mpigi Farmers Cooperative, Kalamba Farmers Cooperative Society Limited and Maleere Kaalo Katuka Farmers Cooperative Society Limited. Joseph Mary Buyungo, Bukakimu’s chairperson, says each cooperative society has 10 farmer groups, with each having an average of 20 households.

“In 2002, Caritas Kampala and Caritas Denmark came to this area to sensitise coffee and maize farmers on commercial farming and how to use farming methods that are environmental friendly. In 2006, the two organisations encouraged farmers in the different sub-counties to form associations. In 2014, the associations became cooperatives,” says Buyungo.

Starting the factory
When the cooperatives decided to begin commercial farming, each farmer was selling their coffee individually.

“We discovered that the middlemen were profiting from our sweat. They bought our coffee cheaply and sold it expensively. There was a need to transport and sell our coffee in bulk for better market,” Buyungo explains, adding that this opened the eyes of the farmers to the fact that they needed to add value to the coffee beans.

The consortium identified land in Mitala Maria on which the coffee processing factory would be built, and then, petitioned the Roman Catholic Archdiocese of Kampala to support them. The latter bought for the consortium the five acres they had identified.

Using the collection from the sale of shares, they began building the factory. When the building was complete, the hurdle came with buying the coffee processor and installing it in the factory. They turned to Caritas Kampala.

Dr Richard Bugembe, the project coordinator of Caritas Kampala, says, “We identified a metal fabricator in Masaka and asked him to make a coffee processor. His price was Shs50million. Caritas Denmark paid the price and also donated Shs45million of the Shs55million Bukakimu needed to extend a power line to the factory. The farmers contributed the remaining Shs10m.”

Operations
On May 17, 2018 the factory began its operations of primary processing of coffee beans. The farmers deal in clonal coffee such as, Robusta Elite and Robusta Clone.

“The farmers transport their coffee to the factory, it is processed, and we take the bulk processed coffee to the National Union of Coffee Agribusiness and Farm Enterprises (NUCAFE). The husks that come off the beans during processing are returned to the farmers to use as fertiliser,” he said.

Even farmers who are not members of the cooperatives also use the factory. All the farmers pay the factory Shs150 per kilogramme for processing.

According to Chrysostom Kato, the factory manager, the coffee processor can process 10,000 kilogrammes of Kiboko (black coffee beans) and 5,000 kilogrammes of Kase. “NUCAFE does not buy ungraded coffee.

Instead, it buys coffee depending on the screen (size) and the prevailing dollar rate. In a good season, screen 17 and 18 can be bought at Shs6,500 to Shs7,000 a kilo, while screen 12 to 15 costs between Shs5,500 and Shs6,000,” he said.

The challenges
The high electricity tariffs, in kilo watts that the factory incurs are still making the optimisation of profits difficult. If the coffee beans are completely dry, one unit of electricity processes 40 kilogrammes. If the coffee is damp, one unit processes 30 kilogrammes.
To cut on the electricity bill, it would help if each individual farmer had a moisture meter to measure the dryness of their own coffee before transporting it to the factory.

Membership
To become a member of a cooperative, a farmer had to part with Shs50,000; Shs30,000 is share capital, Shs10,000 is the joining fee, and Shs10,000 is the minimum balance on the farmer’s savings account.

In 2012, the six cooperatives agreed to form Bukakimu to collectively sell their coffee. The share price in is Shs10,000 and the cooperatives could buy as many shares as they wanted. Individual members were also encouraged to buy shares but are limited to only 50 shares.