The proposed National Coffee Bill 2018 has ignited a great deal of debate from various stakeholders in the sector.
The National Union of Coffee Agribusiness and Farm Enterprises (NUCAFE), which is the umbrella that brings together coffee farmers countrywide, has also chipped in with three key proposals of streamlining regulation and development, reduction in taxes and call for government to improve research, writes ERNEST JJINGO.
Coffee farmers under their NUCAFE, have welcomed the proposed National Coffee Bill 2018. On August 1, the organization submitted its proposals about the bill to the Parliamentary Committee on Agriculture after carrying out countrywide consultations with member coffee farmers from coffee-growing regions in the country.
Former finance minister Gerald Ssendaula, who is the NUCAFE chairman, told The Observer that they welcome the introduction of the bill by the government to govern the crop because the quality of coffee needs to be improved.
Among the proposals NUCAFE submitted to parliament is the formation of the Uganda Coffee Regulatory Authority to regulate the growing and production of coffee in the country.
At the moment, Uganda Coffee Development Authority (UCDA) is playing both roles of regulation as well as that of development agency, something that creates a conflict of interest and compromised the effective performance of the entity.
“The existing law recognizes UCDA as a developing body; so, let the new law concentrate on regulating. There must be a regulatory body through which the government can work and provide extension services,” Ssendaula said.
He added that every year, government uses a lot of money to give out seedlings, many of which end up to be of poor quality with a low survival rate and, therefore, there should be an authority to oversee the activities of the developing agency and regulate the entire coffee chain.
Joseph Nkandu, the NUCAFE executive director, added that they want to emphasize the importance of an institutional framework without conflict of interest thereby calling for the separation of roles by forming another entity to do the regulatory role because a single entity cannot regulate a whole value chain and at the same time be the developer.
NUCAFE also opposes the bill’s proposal to increase the tax government imposes on coffee exported. This tax, commonly known as cess, ranges from one per cent to two per cent depending on the quantity. NUCAFE says exporters load the tax onto the farmers, who end up getting less money than they would otherwise be getting without cess levy. Therefore, increasing it will discourage farmers from producing and adding value to coffee.
Ssendaula said they have proposed that cess becomes part of the annual national budget done in such a way of not exceeding 1 per cent so that it helps to take care of the fluctuating global coffee prices, especially when they become too low as it is currently.
The coffee farmers further appealed to the committee to not consider the introduction of the auction method as a way of selling coffee. They want the current system of selling directly to any buyer around the world retained.
They said that auctions have a tendency of encouraging buyer cartels to keep the price offers low thus reducing farmers’ incomes as experienced in the neighboring countries of Kenya and Tanzania whose coffee production share has been decreasing over the years as a result of selling through auctions.
They, therefore, proposed the maintenance of the current selling system but instead asked to be supported to collectively market, develop their skills in export trade and build their capital base to participate in exporting their coffee.
Ssendaula further addressed the controversial sections of the bill requiring all coffee farmers to be registered, saying that as coffee farmers under NUCAFE, they support the registration of farmers at all levels because there is nowhere in the bill that registration requires a license as it is being claimed by some individuals.
“Registration is a must so that we have traceability which will make it easy to lobby people to buy our coffee. The people who need licenses are those who want to trade in coffee, but not the farmers,” Ssendaula said.
He also called upon the government to intensify research relating to coffee because lack of effective research has cost the country money as realized in 1993 when the country was attacked by coffee wilt disease.
It took nearly eight years to find alternative varieties and on this background, NUCAFE believes there is need for heavy investment in research such that new varieties of coffee are readily available whenever need arises.