 Company profile |
UGANDA COFFEE DEVELOPMENT AUTHORITY
 Manager |
Mr TRESS BUCYANAYANDl
Managing Director
Read our exclusive interview
| Contact |
The Uganda Coffee Development Authority
P.O. Box 7267
Coffe House, Plot 35 Jinja Rd.
Kampala, Uganda
Tel 256940 , 233073
Fax: 256994
Telex 61412 COFEDEV
| Activities |
Agriculture: promotion and regulation of coffee industry in Ugandan .
| Strategy |
INTERVIEWWlTH THE MANAGING DIRECTOR OP UGANDA COFFEE
DEVELOPMENT AUTHORITY Mr TRESS BUCYANAYANDl
(February, 1998)
Q Focusing on your institution could you please give us a brief
historical background for our readers to understand the economic situation in Uganda.
MD: Uganda Coffee Development Authority (UCDA) was created by Statute
in 1991 and that Statute formalized the liberalization by creating UCDA and separating it
from the traditional Coffee Marketing Board (CMB). The two organizations were given
distinct roles, Coffee Marketing Board Limited (CMBL) was left with the function of
marketing coffee and UCDA was given a role of regulating the industry. The CMBL retained
the commercial functions of buying and selling coffee with the view that if it does very
well and competes with private exporters it survives and if it does badly it sinks.
Q What has been the main evolution the coffee sector has gone through?
MD: The sector has involved itself literary in all stages e.g.
Research, Production, Marketing, Price mechanism up to export level. Describing the
changes at the research level, in the past coffee used to be treated as one of the many
crops in research system but since liberalization, an established Coffee Research Unit was
formed, specifically to devote itself to coffee research and it is mainly funded by the
coffee industry through CESS. When it comes to production we recognized one problem that
the coffee in Uganda was aging, much of the estates were 30-40 years old, and so we
decided that the only way to replace the old and un producing coffee would be to put in
place a system for raising planting materials to sell to the farmers. In the past,
planting materials used to be produced by the Ministry of Agriculture and government was
not producing enough. Then private nurseries were established and are doing very well as
compared to the government ones. At the moment, we have over 500 nurseries producing
plantlets both for Robusta and Arabica for sale to fellow farmers. With that kind of
policy we hope to replace our aging coffee within the next 20 years.
On the farm, the farmer is now selling all his coffee for cash compared to the past
where he would wait for a long time before being paid cash because at that time there was
a monopoly of Coffee Marketing Board ; but because of competition by many exporters with
their agents in the country side farmers are paid cash promptly. Currently, the farmers'
earnings have increased from 20% when the price was fixed to 82% for the last 2 years, and
because of that incentive, production has also doubled. By 1991 Uganda's average
production was approximately 2 million 60 kg-bag but the recorded figure of last year was
4.24 million bags and previous year we had done 4.14 bags. Unfortunately, this year we
might not retain the record of last year because of the El Nino weather phenomenon that
occurred recently which affected production.
When it comes to marketing, we allowed competition. Before 1991, there was only one
body called Coffee Marketing Board. In 1992, we opened up the market and about 10
exporters operated; as we speak now, we have 40 operating and competing to buy coffee, it
is this competition that has allowed cash payment on the farm level and has stimulated
prices; and because of liberalization foreigners have come in without fear of losing their
money and profits. | There is now a partnership between the external buyers and Ugandans where each group is
offering something; the foreigners have the capacity to borrow money from outside
countries at a reasonably low interest rate which they bring and use to buy coffee.
However, the foreign buyer cannot be able to buy coffee from the farmers because of not
knowing the local situation, so they give the money to the indigenous Ugandan who are
experienced and can go to the villages to buy coffee.
Q: What are the main points the UCDA is emphasizing on, in keeping
this sector prosper?
MD: UCDA is emphasizing both the regulatory and development aspects of
the coffee industry. On the development aspect, UCDA supports biological research,
economic research and nursery work. On the regulatory aspect, we are assuring quality. No
coffee goes out of this country without attaining a certificate of quality. Although we
have liberalized and the coffee belongs to the exporters, the final certificate which
allows coffee to be exported is given by UCDA. It is done so, in order to make sure that
commercial considerations by these private people do not compromise the quality of Uganda
Coffee. Uganda Coffee Robusta is the best in the world and all robusta coffee from other
countries in the wold are compared and judged against Uganda's robusta coffee.
Since we are interested in quality we have an extension service that goes out to teach
exporters on how to look after their factories, and the processing of dry coffee. We do
also have a small training section in our laboratory for Quality Controllers working with
those exporters. The Quality Controllers are trained for 4 months.
Q As a regulatory and developmental body, what are the joint projects
UCDA is doing with American institutions?
MD: We have a number of projects, the most important one is the
Gourmet coffee project. We are trying to penetrate the American market with the specialty
coffee. In 1995- 96 we were able to export only 1,200 bags and 1996-97 it rose to 4,800
bags. In Canada it went up from 600 to 1200 bags. For robusta last season we exported
16,000 bags to the United States. This is an achievement because most of the coffee goes
to Europe as green coffee.
Q: One of the major topics we have discussed with several companies is
that there is a willingness to create more valued products, what is the policy that leads
the coffee industry to that level?
MD: Attempts are being made to add value to our coffee. The first one
is to sell washed arabicas and robustas to the specialty markets and this is already
happening. The second attempt is to popularize local consumption of roasted and ground
coffee and this is also beginning to take root. The third is to attract an investor to go
into soluble coffee production. Here, we are at the preliminary study phase and so far
there is nothing tangible.
Q: On the American market how would you describe the relationship
between your company and American Institutions?
MD: Our institution is a facilitator as we do not engage in buying and
selling coffee. Our role is to link the buyers in USA with coffee exporters in Uganda. (we
can give you a list of coffee exporters which you can include in your magazine so that
interested American buyers can reach them).
Q As a Managing Director, what has been a more satisfying achievement
you have done with your team for this company.
MD: Reviving the coffee industry so that the farmer gets interested in
the crop. Instead of the farmer getting the fixed margin of 20% of the world price in 1991
or before, the farmer can now get 80% plus. This is an achievement which has led to
production from 2 million bags to 4 million in recent past.
Q: What do you think would be the top production in Uganda in order to
maintain a good quality and to invade the coffee market and make the price raise.
MD: We want to consciously stay in the coffee business and increase
output to about 6 million bags for the next two years, but any further movement beyond
that, will be influenced by what is happening else where in the coffee industry because we
are members of the coffee producing countries and members of these groups are interested
in controlling supplies, so that prices are not depressed by over production.
Q: What message would you send to our readers in order to get
interested in Uganda.
MD: I would encourage the investors and consumers to get interested in
Uganda robusta since its the premium coffee in the world. We would particularly wish to
invite those who can "add value" to our coffee by producing soluble coffee to
come and invest in that venture. Uganda has adequate raw material for the production of
soluble coffee. |
