In Part I, a brief introduction to some major contributors to Burundi’s coffee subsector was made. I focused on three main groups currently involved in the processing and distributing of coffee once the cherries have been picked: the SOGESTAL (now, increasingly privately owned coffee washing stations (CWS)), local buyers (washing stations, amongst others) and dry mills.
This post will focus on how Burundi has begun moving from a coffee market selling low-quality commodities coffee into one that produces high quality specialty coffee. It is a significant shift in Burundi’s coffee paradigm and its success will require long-term planning, investment and the collective action and will of everyone involved. In this post, I wrote about USAID’s involvement in the process and how Burundi’s government has started to liberalize coffee through the privatization of CWSes and dry mills.
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The Transition
From my readings and the conversations I had with people throughout Burundi’s coffee sector, I learned that the already long and complex liberalization process would be even slower going without the involvement of USAID. As an example: when the first tender went out for washing stations, the government wanted cherry producers (via farmers' groups/associations/cooperatives) to acquire part ownership. In such a scenario, both buyers and sellers would have control of the processing capacity – a clear conflict of interest. One of the obvious questions outlined by potential buyers was: who are these people we’re supposed to be sharing ownership with? If partners with competing interests own the same washing station, whose interests win out? Is it the farmers (sellers who want to sell high) or private companies (potentially exporters wanting to buy low)? There was no precedent for this type of model; no other set of experiences to help make sense of how this was all supposed to work. In fact, farmers’ associations/cooperatives have not been able to organize themselves in order to buy the government suggested share of the washing stations (approx. 25%) and the government still own shares in washing stations that have been purchased privately.
With USAID’s involvement, companies that decided to go ahead and purchase CWSes had support and a bit of an intermediary to help smooth the transition from a government controlled industry to a semi-privatized one (the government still retains control of varying shares of each washing station). Cherry producers have been quite skeptical of companies buying up washing stations. A big part of the problem was mis-communication on the government’s part with respect to CWS ownership. Instead of communicating that producers were paying taxes to maintain CWSes, the government characterized them as payments that would eventually lead to coffee farmers groups’ ownership.
Also problematic is that governments, generally, aren’t very good at running things tightly and efficiently. The case of Burundi’s SOGESTALs is no exception. These have a history of running with huge overhead costs and producers have never been given the opportunity to participate in anything other than cherry production. They had no involvement or knowledge about markets and pricing; they constantly were or felt like they were being cheated (e.g. paid for less cherries than they delivered); they had no access to advances in agricultural knowledge and technology and no access to international buyers with whom they could negotiate. Amongst many, two consequences were low quality coffee and wildly fluctuating production levels.
What’s Been Done?
USAID’s five-year program (Burundi Agribusiness Program), which ended in November 2012, was significant in Burundi’s move toward high quality coffee production. The program, while small in scope in its targeting of a small number of washing stations and regions, seems to have provided the necessary initial push toward better agricultural practice, a marketing strategy (almost nonexistent prior) and better use of Burundi’s already impressive coffee infrastructure (the EU built the vast majority of currently operating washing stations back in the ‘80s). You can read more about specific initiatives in this post.
Private companies have also invested in better production practices. One of our partners in Burundi, Webcor, has an agronomist on staff who supervises an agronomic team to work with cherry producers on everything from fertilizer use to replacing old coffee plants with new ones (many of Burundi’s coffee bushes are between 20-60 years old; a definite hindrance to quality).
Just as important as improving the agricultural and marketing aspects of coffee production is the training of professional cuppers. If local partners don’t know what international buyers of specialty coffee are looking for, how can sales take place on equal footing? Again, USAID has invested in this area and one of its coffee specialists, Tharcisse Niyungeko, has been instrumental in both training and increasing the awareness of the importance of cupping for a coffee professional.
How Privatization has Benefitted Burundi Coffee
Actually, it’s too early to evaluate how the liberalization of Burundi’s coffee sector has benefitted those involved. It’s only been about four years since efforts began in earnest and I met with just a tiny fraction of the people earning their livelihoods from coffee. It’s pretty clear that it will take another five years or more before any widespread or significant consequences of this process will become evident. However, every single one of the 30 or so people I spoke with (ranging from government officials, to foreign NGO workers, to cherry producers) expressed that the liberalizing and privatizing of Burundi coffee is a positive thing. A very positive thing. From the producers’ perspective, the most significant consequence of allowing private players into the system has been competition. This new competition has led to several subsequent consequences: more transparency of the value chain, better and more connections amongst buyers and sellers (local and international), an actual choice in who to work with, since it’s no longer ‘the government’, amongst others.
Also commonly expressed was the conclusion that competition is good for quality. Producers are willing to be more selective in cherry selection and learn better agricultural practices if there’s incentive for them to do so. When the government controlled coffee production, cherry producers felt completely alienated from the selling of their own coffee – they characterized coffee growing as simply an exercise in producing something for the government to sell and benefit from. Since they had no idea how pricing was determined and coffee washing stations were 100% owned by the government, there was little choice or autonomy in how to work and with whom.
Thanks for reading,
Melanie
Go back to: Introduction Go back to: Part I
Note: The posts in this series contain both fact and opinions – from coffee professionals in Burundi and my own. Data collection for my master fieldwork has just been completed and has yet to be analyzed, so these posts will be updated as more information is revealed.