Regional Markets

3 Cases
TechnoServe has also established community processing centres that help poor farmers
who cannot afford their own processing facilities.
Working closely with the government and other key regulatory stakeholders,
TechnoServe has been lobbying for reform and streamlining of coffee policy. One of
its studies (the Coffee Taxation & Benchmarking Initiative) focused on Tanzania’s coffee
taxation polices. It proposed a course of action for rationalising and harmonising
taxes and levies (which can have a strong impact on rural productivity) As a result of
these efforts, taxes in the Tanzania’s coffee sector were reduced from 21% to 14–16%
(TechnoServe 2006; World Bank 2007).
Producer and consumer prices
Coffee prices are vital for providing food security and livelihoods in the Kilimanjaro
region. TechnoServe’s intervention, particularly the promotion of entrepreneurial
actions and the quality improvement measures, resulted in new marketing channels. For
example, by upgrading coffee bean quality from a Class 9 to a Class 5, combined with
the improved marketing, the KILICAFE-affiliated producer organisations enjoyed a
70% price premium. Another example is the much publicised success of the first direct
grower-to-roaster transaction. Five grower groups (representing a total of 645 smallholders),
with the help of KILICAFE, sold 10,000 kg of washed Arabica beans to
Peet’s Coffee and Tea, a specialty roaster from the US. The transaction earned a 150%
premium for the participating smallholders (TechnoServe 2006).
Innovation and sustainability
The reintroduction of coffee production has allowed coffee farmers to adopt new business
skills, agronomic techniques and processing technologies. Through demonstration
plots farmers could become acquainted with new agronomic practices, which improved
the quality and the yields of their coffee. Today the quality of the beans from the participation
associations is quite good, and very few bags are rejected by buyers. The demonstration
plots provide the opportunity to showcase the new techniques for coffee
production. Farmers have also experimented with new livelihood sources (small fish
ponds) and new technologies, such as maize hulling machines.
Lessons learned
Several main challenges remain in the cultivation of coffee in northern Tanzania: low
productivity, shortage of land, poor coffee quality due to suboptimal post-harvest practices,
ineffective extension services, dwindling farmer numbers due to new employment
opportunities (e.g. tourism, transport and business). TechnoServe’s experience in
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