July 2005

For 19th century explorers, the Kagera region was in the heart of Africa, between the continent’s great lakes, where Livingstone and other adventurers searched for the source of the Nile. Today, Kagera is the north-west tip of Tanzania, remote and isolated between the Rwanda Mountains and Lake Victoria. In the past decades, the people there have had their share of misery. In the 1980s, a well-meant development project to increase the fish in Lake Victoria ruined the lake’s delicate ecological balance and led to endemic insect plagues gravely affecting agriculture in the region. And in the ensuing years, world market prices for coffee, Kagera’s only cash crop, plunged to record lows, reducing farmers’ income to less than a dollar a day, far below the poverty line. The consequences of the lack of income are not difficult to guess: no education, no health facilities, not even food for the family, none of the most pressing MDGs covered. It’s in this difficult environment that Kagera Cooperative Union (KCU) must operate.

Founded in the 1930s, it currently comprises some 90.000 small coffee farmers organized in 124 village cooperatives. In Kagera, “small” means half a hectare of land on average, which must feed a family of six and generate suffi cient cash income, through the sales of coffee, to pay for school fees, clothing, health care and all the daily necessities. Since 1988 KCU has been selling an increasing part of its members’ coffee under Fairtrade terms. Throughout the years, farmers’ and KCU’s total additional income through Fairtrade has surpassed US$ 7 million.

At the same time, the Union’s leadership thought hard how to use the extra money to achieve sustainable longer-term improvement in their farmers’ livelihood. The thinking concentrated on “Tanica”, the region’s only factory, set up by Tanzania’s coffee marketing parastatal in the 1960s to produce instant coffee powder. Yet the parastatal was doing little to boost the revenues of the factory. When the parastatal decided to privatize Tanica, KCU farmers approved that the Union use some of the Fairtrade income to buy shares – a few every year, as finances permitted. In 2004, after 14 years, the aim of owning 51% of the factory was reached. At last, KCU can implement its ambitious marketing plan to multiply instant coffee sales by making it available in every corner of Tanzania. Controlling Tanica fills the farmers with pride. From a business point of view; Tanica is bound to strengthen the Union as it diversifi es its income and reduces its dependence on exports.

Through the years, the Union also used part of the Fairtrade income to invest in the three schools it runs for the children of the coffee farmer villages. They hired more teachers and offered pupils more nutritious school lunches. Another project was to promote organic coffee production. The cooperative offered supplementary payments to farmers who do decide to switch to organic.

As a result, in 2004, organic coffee represented 7% of the Union’s total coffee exports. Yet of all the uses of the Fairtrade income, arguably the most significant and longest impact was achieved with very little money. Seeking to invigorate farmers’ participation in their cooperatives, in 2004 the new management proposed to the Union’s general assembly – the yearly event where delegates of all the 124 village cooperatives approve the budget and decide on the use of the Fairtrade benefi ts – to allocate about US$ 2.000 of the Fairtrade money to each of the village cooperatives. The assembly agreed, recommending that each village first decide on how to use the money before it was disbursed. Simple as the measure was, it was still astonishing.

In dozens of villages in Kagera’s hilly countryside, farmers are passionately discussing what to do with the US$ 2.000. Should the bridge of the main road that was washed away by the monsoon rains be reconstructed? Should a cooperative store be set up, so that the villagers no longer have to walk an hour to the next village to buy sugar or soap? Or is the money better spent on repairing the local school? In the end, most decided to invest in education. One cooperative is spending US$ 700 to buy schoolbooks, another is buying new blackboards, and many are repairing or expanding school buildings. Most importantly, the Fairtrade money gave Kagera’s farmers more incentive to debate future plans. Thousands of poor farmers came away confi dent that with the effort of all it is possible to avoid that the situation many of them had to face, living with less than one dollar per day, will never happen to their children.