Regional Markets

3 Cases
KILICAFE supports coffee growers in three ways: improving and promoting quality
coffee; assuring access to finance, and linking farmers to premium coffee markets. The
Tanzania Coffee Association (TCA) is an umbrella organisation, which was established
in 1995. TCA’s key activities include: promotion of measures that increase productivity
(i.e. through appropriate technology, use of disease resistant varieties, application of
organic fertilisers etc.); promotion of ecological wet processing of coffee; enhancing the
commercialisation strategy of Tanzania’s coffee industry in specialty markets; promotion
of local markets; policy advocacy in coffee regulation and licensing, and others.
Coffee cooperatives buy about 60% of smallholder productions, and also link farmers
with input suppliers, transporters, and financial institutions. On behalf of their farmers,
cooperatives sign contracts with input suppliers. They pay transporters for collecting
and transporting the coffee from the small processing centres to the curing company.
The cooperatives check that only quality coffee is collected. They have training programmes
in place to assists farmers in the processing of quality coffee. When the government
subsidises inputs, it uses the cooperative structure to reach farmers.
The other portion of the smallholders’ crop (40%) is being handled by private buyers.
Due to competition among private traders, and the limited volume of coffee available
during harvest time, private buyers tend to offer higher prices than cooperatives (usually
cash payment at farm gate). However, the benefit of this higher price is offset by
the drawbacks of dealing with traders—most of them do not supply inputs or provide
loans as part of the business relationship.
Next, the coffee reaches the intermediary processors, who remove the outer hard cover
of the coffee bean and pack the coffee into containers for export. Through the coffee
auction, they sell the lower quality coffee to national buyers. The Coffee Curing
Company, located in Moshi, is the main processor in the Northern Zone.
After purchasing the beans, roasters prepare the coffee in its final form for retail. In
addition to roasting the beans, also grinding, instant coffee and other final processing
is sometimes done by these companies. Most of Tanzania’s coffee is roasted outside the
country: by Peet’s Coffee and Tea, Starbucks Coffee Company, and Dallis Bros. Coffee
in the USA; by List & Beisler GMBH in Germany; and by Volcafe Ltd. in Japan.
Stakeholders who support the coffee value chain
Transporters move inputs from suppliers to farmers as well as coffee beans from farmers
to the cooperatives, next to the coffee curing company and finally to the ports where
the coffee is exported. Due to increased economic activities and improved infrastructure,
the number of transporters is increasing in the country. Financial institutions, like the
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