By Nelson Mandela Muhoozi
Integrating the coffee development authority (UCDA) into the agriculture ministry (MAAIF) could introduce bureaucratic delays that would harm the coffee sector, Parliamentarians have been told.
“UCDA has been able to provide real-time information and technical support to farmers,” he explained, “but such efficiency could be lost if coffee-related matters are subjected to the slow-moving processes of a government ministry,” Dr Michael Mugabira from the Devoted Coffee Initiatives Uganda, says.
The coffee initiative is a coalition of coffee farmers and nursery operators.
Mugabira made the remarks while representing the coalition and presented critical policy insights to the Parliamentary Sectoral Committee on Agriculture, Animal Industry, and Fisheries on October 15, 2024.
Mugabira said coffee is of critical importance to Uganda’s global standing: “What puts Uganda on the global map is not oil, fruits, or fish, but coffee”.
“Globally, coffee is the most sought-after commodity after oil. Therefore, Uganda should treat coffee as a core strategic commodity for its global competitiveness and international recognition,” he said.
The debate was sparked by a public invitation from the Parliament for submissions on the proposed UCDA merger with the agriculture ministry (MAAIF) by October 18, 2024.
The merger is part of the broader government initiative called the Rationalisation of Government Agencies and Public Expenditure (RAPEX), aimed at streamlining public agencies.
Alternatives to reforming coffee sector
While UCDA has made significant strides, Mugabira acknowledged that further reforms are necessary to fully implement Uganda’s Coffee Roadmap and unlock the sector’s full potential.
He proposed several key reforms including an incentives regime. Mugabira stressed that Vietnam’s success was largely due to an incentivised regime and argued that Uganda’s recent growth in coffee production has been partly attributed to UCDA’s distribution of organic fertilisers, such as ‘Fertiplus,’ to coffee farmers.
Mugabira called for a review of the Coffee Cess or Levy stipulated in the National Coffee Act of 2021, which was intended to finance the coffee sector.
He suggested renaming the levy to the Coffee Development Fund (CDF) or Coffee Industry Fund (CIF) and ring-fencing it for direct remittance to UCDA. This, he said, would enable UCDA to finance the Coffee Roadmap and its administrative activities.
Mugabira proposed abolishing the free distribution of coffee seedlings in favour of a co-financing model similar to the successful commercial forestry sector.
He argued that using the Coffee Development Fund to offer partial grants would attract commercial farmers and lead to the establishment of coffee plantations, which could help Uganda achieve the projected production of 14 million additional bags over the next decade. This, in turn, could boost Uganda’s coffee revenue to at least $3 billion annually.
Additionally, Mugabira highlighted Vietnam’s success in establishing a coffee co-ordination board, separate from traditional government ministries, to oversee the coffee value chain.
Regarding levy on coffee imports, Mugabira recommended introducing a levy on coffee imports to protect Uganda’s nascent coffee value-addition initiatives.
Global coffee industry rankings
There are approximately 55 coffee-producing countries worldwide. However, only a select few can compete in what is referred to as the ‘Club of 10’—the top producers globally.
To qualify for this elite group, a country must produce at least 4 million bags of coffee annually. Anything below this threshold relegates a nation to the periphery of the global coffee value chain.
Mugabira explained the critical importance of coffee to Uganda’s global standing, saying “What puts Uganda on the global map is not oil, fruits, or fish, but coffee.
Globally, coffee is the most sought-after commodity after oil. Therefore, Uganda should treat coffee as a core strategic commodity for its global competitiveness and international recognition.”
Lessons from coffee leaders
The global leader in coffee production, Brazil produces an estimated 70 million bags annually.
Mugabira noted that Brazil operates a free-market economy, and its coffee industry is largely self-regulated through certification programs such as Fair Trade and Rainforest Alliance.
He said the private sector, led by the Brazil Coffee Industry Association, works closely with the Ministry of Agriculture, Livestock, and Supply to ensure compliance with these certification standards.
He said the lesson for Uganda is for the country to give UCDA time to nurture a private sector entity—such as a cooperative of coffee farmers—to develop and implement certification programs.
These certification standards, he said, would enable Ugandan coffee farmers to access global markets. “Once the private sector matures and is capable of self-regulation, UCDA could potentially be integrated into MAAIF,” he noted.
Vietnam
In the late 1980s, Vietnam identified coffee as a strategic cash crop and developed a roadmap to transform its economy.
The Vietnamese government financed key value chain actors, including the production of high-yielding coffee seedlings, irrigation systems, fertilizers, and micronutrients.
This government-led initiative, commonly referred to as the ‘green revolution economy,’ allowed Vietnam to dramatically increase its coffee production. In just a decade, the country went from producing 1 million bags in 1990 to 15 million by 2000, and today it produces around 30 million bags, ranking second globally.
Mugabira said Uganda’s UCDA has already borrowed from Vietnam’s playbook by launching a Coffee Roadmap, aiming to produce 20 million bags by 2025-2030.
Since 2014, Uganda has increased its coffee production from 3 million bags to 6.85 million bags by 2021, securing the 6th position globally.
According to Mugabira, UCDA has played a pivotal role in this growth, and he argued that it should be allowed more time to continue its work.
Parliamentary reactions
Members of Parliament on the committee, led by Hope Grania Nakazibwe, the District Woman Representative for Mubende (NRM), received the farmers presentation and expressed their intent to include the concerns raised in their report to Parliament.
Nakazibwe praised Uganda’s recent achievements in joining the “Club of 10” global coffee producers and acknowledged the importance of maintaining this momentum.
However, Mugabira issued a final warning to Parliament: if the merger of UCDA with MAAIF proceeds, it could undo years of progress.
“Given the above empirical evidence, we request that the issue be subjected to a referendum, allowing coffee farmers across Uganda to have their say,” he said.
Public service minister Muruli Mukasa, during his interactions before the committee last week emphasized that the rationalisation would not compromise the quality of services provided to farmers but would instead lead to cost savings and improved coordination among government agencies.
He said that there will be net savings for the Government and that no services will be lost.
According to him, RAPEX will eliminate unnecessary competition for resources and ensure more efficient policy implementation.
