KAWERI COFFEE PLANTATION: UGANDA’S BEST KEPT SECRET

Tucked away in the hills just outside Mubende town is Kaweri Coffee Plantation, a 2,512 hectare (6,207 acres) operation that is arguably Uganda’s best kept secret.

In the late 1990s the German company Neumann Kaffe Gruppe (NKG) was looking to start a robusta plantation. After assessing several options in South America, Asia and Africa they settled on Uganda.

“Uganda was chosen partly because it is part of the Greater Congo Basin, which is where the robusta coffee has its origins,” said Kaweri Coffee Plantation managing director Etienne Steyn.

NKG, which accounts for one in every ten kilogrammes of world coffee demand, got land in Mubende and set about setting up a plantation to rival similar operations in Brazil and Mexico.

 Planting of 1800 hectares of coffee was completed between 2001 and 2004.

“All coffee nurseries within the district, and as far as Mbarara, were exhausted to meet the required number of seedlings needed for planting”. We now have our own nurseries,” Steyn said on a recent tour of the plantation.

There are currently about 1.8m trees on the plantation on 1650 hectares, now under coffee. Another 685 hectares (27% of the farm) is occupied by natural highland rain forest and is fast becoming a sanctuary for all sorts of wildlife – serval and civet cats, bush babies, vervet and colobus monkeys, various antelopes such as Reedbuck, duiker and bush buck, many rare species of butterflies and many species of birds.

"Steyn said that the plantation, which harvested its first crop in 2005, is set to produce 2,500 tons of coffee this season. This means Kaweri will account for two in every hundred bags of coffee produced in Uganda, the largest single producer of coffee in the country...

According to the Uganda Coffee Development Authority (UCDA) there are about half a million coffee farmers in Uganda.

But Kaweri is not only the single highest coffee producer in Uganda but may also have the highest productivity per unit area than any other operation in the country.

According to Steyn the farm’s productivity is about 2.2 tons per hectare compared to the national average for the robusta of half a ton per hectare.

Better farming methods and the judicious use of research are at the heart of these high productivity numbers at Kaweri.

“Every month we take leaf samples and send them to UK for analysis, in addition annually we take soil samples for analysis in Brazil. From these we are able to determine accurately what fertilisers and other inputs we have to apply in different parts of the farm,” Steyn said.

The farm does not however employ irrigation as there are no streams or surface water on the farm and in 2013, Geophysical surveys showed no underground water was available for irrigation purposes.

Kaweri markets a washed robusta and has the largest wet processing plant on the continent with a capacity to process 350 tons of coffee cherry daily.

Internationally Kaweri has distinguished itself as having produced a robusta coffee that is traded by name: Colobus (Screen 18), Turaco (Screen 15) and Reed Buck (Screen 12) coffees, which allows the farm to command a premium over and above the normal prices.

Kaweri does not employ the use of outgrowers although it employs at least 600 people throughout the year and up to 3000 during the peak harvest period of six months.

“During harvesting we often exhaust all the available labour around the farm and have to go further afield to hire workers to harvest the crop,” Steyn said.

The nature of the robusta tree is such that it is unlikely that mechanised harvesting will replace manual labour, so for the duration of the 99-year lease NKG has on Kaweri we can expect that it will continue to serve as a source of employment throughout the year.

Beyond creating jobs for people in the area, Kaweri supports the surrounding communities and the farm has drilled  eight boreholes, built a new primary school in nearby Kitemba village and has helped in transferring know-how to local coffee farmers.

“Support activities include the establishment of extension services, development of professional farmer organisations, capacity building on value addition processes and market access as a result they are today marketing in bulk directly to exporters – cutting out the middleman and getting paid more,” Steyn said.

"Steyn, himself a former coffee farmer in Zimbabwe said, it would an uphill task for local farmers trying to replicate the scale of the $20m (sh52b) Kaweri plantation....

Speaking from his experience in Zimbabwe he said commercial farmers have little support in Uganda.

“We had farmer associations in every district which provided extension services, lobbied for our interests, facilitated in warehousing. In addition there were agricultural banks whose services were structured taking into account the industry and its nuances,” Steyn said.

Despite a compensation case that is still winding its way through the courts and hangs over the project like a dark cloud, the farm’s target is to achieve production of 3,500 tons a season.

Industry players are genuinely impressed by what is happening in Kaweri.

“It’s a massive, well run operation and is a good story of what can be done in this country. Its just sad we don’t have a local testimony like that,” said Andrew Rugasira, founder and Chairman coffee processor Good African Coffee.

ZIMBABWE’S INEVITABLE U-TURN A LESSON FOR ALL

Around 2000 or thereabouts Zimbabwe started a crude land distribution that dispossessed white framers of their land and handed them over to black farmers – mostly supports of the ruling ZANU-PF.

This had the desired short term effect of ensuring yet another ZANU-PF victory at the polls and the undesired long term effect of crippling the once vibrant economy to the point now that the Zimbabwean dollar is officially no longer legal tender in that country and the country, once the breadbasket of southern Africa, is now living of food handouts from its neighbours.

At the time the white farmers were hounded out of Zimbabwe they owned 70 percent of all arable land, a scandal in itself but the greater scandal is the colonial legacy that set up this unjustifiable imbalance of a key resource.

"The need for land distribution in principle is undeniable in former colonies like Zimbabwe, South Africa and even neighbouring Kenya. Zimbabwe chose the populist way of redistributing land where a more pragmatic solution, which recognises the economic importance of the existing players would have been taken into account...

The difficulty for economics is that it is difficult to carry out experiments like in a lab, but when countries like Zimbabwe come along they confirm or negate economic theory, unfortunately at the expense of the citizens of that country.

The main lessons that come from the Zimbabwean experience are that in trying to redress economic injustices uprooting the productive players needs to be done systematically so as not to disrupt the economic engine you hope the disadvantaged will benefit from.

Ugandans need no lectures in this as the uprooting of the Asian commercial class in the 1970s set the country so far back to the point that even 30 years of consistent economic gains have not repaired the damage.

And secondly when political expediency wins over good economic sense the consequences will be such that the political gains will only be a pyrrhic victory.

The chicken have come home to roost. It was reported this week that Harare is now making open overtures to the banished farmers to return and take back their properties. Lands minister Douglas Mombeshora last week said a select group of farmers will be invited to take over farms with “strategic economic importance” and that black beneficiaries of the redistribution will start paying compensation to the about 4000 farmers dispossessed almost two decades ago.

Only in Zimbabwe can a politician make such an about turn and survive.

In Uganda we are currently grappling with a shilling whose fall has only be stalled after determined action by the central bank.

The dollar has risen to sh3300 against the shilling from around sh2600 at the beginning of the year.

With our huge import bill – we import almost twice as much as we export in value, one can see why such dramatic movement would cause an uproar.

Essentially the local currency is falling through the floor because there is too much shilling chasing too few dollars.

Officials say a lower export receipts, specifically the collapse of south Sudan market, the slowdown of investment into the oil sector and reduce donor inflows are affecting dollar supply. Demand for hard currency is being fuelled by our huge investments in dams, roads and railways.

It is this delicate balance that we need to look to for a solution to our tanking shilling.

Either we put a hold to our infrastructure projects, which is out of the question as they are critical for future economic growth or produce more for export, which will take a while as, for example, expanding the acreage under coffee may take a few years to see results.

"The long and short of it is that it may take a while – weeks, even months, before pressure on the shilling is lifted...

The quick fix would be to decree that the central bank of Uganda defends the shilling at all costs, which would bring temporary relief. But once our reserves are drained the shilling would collapse way beyond the sh4,000 to the dollar mark we so dread and send the economy into reverse.

The moral of the Zimbabwe story, which can become our own if we succumb to populism, is the economy has laws which you subvert at your own peril.