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Agribusiness Initiative Trust aBi Trust UEDCL Tower, 4th floor Plot 37 Nakasero Road P.O. Box 29851, Kampala Uganda Tel: +256 (0) 312 351600 Fax: +256.

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Presentation on theme: "Agribusiness Initiative Trust aBi Trust UEDCL Tower, 4th floor Plot 37 Nakasero Road P.O. Box 29851, Kampala Uganda Tel: +256 (0) 312 351600 Fax: +256."— Presentation transcript:

1 Agribusiness Initiative Trust aBi Trust UEDCL Tower, 4th floor Plot 37 Nakasero Road P.O. Box 29851, Kampala Uganda Tel: +256 (0) 312 351600 Fax: +256 (0) 312 351620 SUSTAINABLE COFFEE INITIATIVES IN UGANDA – FROM A DEVELOPMENT PARTNER’S PERSPECTIVE: aBi TRUST Presented by Clive Drew Agribusiness Director African Fine Coffees Association Conference & Exhibition Commonwealth Resort, Munyonyo, Uganda February 16 th 2013

2 Highlights of the Presentation Introduction to aBi Trust Where is the Planet Earth headed? What is Sustainable Coffee? Sustainability models supported by aBi Trust in Uganda Additive contribution Is Sustainable Coffee Sustainable? 2

3 Introduction to aBi Trust The aBi Trust is a Uganda Trust founded by the Governments of Denmark and Uganda The Trust has an endowment fund, and through delegated cooperation, the Trust has multi- development partner funding from Danida, USAID, EKN, EC, Sida & BEC & support from KfW & DfID Its Components include Value Chain Development, Financial Services, Gender for Growth & Investments The value chains supported under a “whole of value chain” approach are Coffee, Oilseeds, Maize, Dairy, Pulses and Horticulture 3

4 Introduction to aBi Trust, cont’d aBi Trust Vision is a competitive, private sector led agriculture in Uganda We are a perpetual Trust, so we are here for the long haul and less subject to project life cycles Our support is directed to Implementing Partners through cost-sharing partnerships that currently include: –National & Regional level Associations & Platforms –Producer Organisations –SMEs –Rural financial services outreach (Banks, MFIs, SACCOs, VSLAs) –Provision of Lines of Credit and Loan Guarantees –BDS Providers 4

5 Where is the Planet Earth headed? “Full Planet, Empty Plates” - Brown

6 Where is the Bull? 6

7 Competition for Space: Projected World Cereal Consumption 8 Source: FAO Other Livestock Human

8 The Yield (Productivity) Response 8

9 0 500 1000 1500 2000 2500 3000 3500 4000 4500 5000 Cereal Yields (Kg/Ha) in Developing Countries Sub-Saharan Africa East Asia & Pacific Latin America & Caribbean Middle East & North Africa South Asia 19612005

10 The tenets of sustainable coffee (3-P’s) 10 PEOPLE (Social) PLANET (Environment) PROFIT (Economic)

11 So the First World decided to “fix it” 11 What next? CSR?... Rights-based Gender & Youth Climate Change/Green Growth/Carbon footprint Food Security Land Rights, Succession Planning HIV/AIDS

12 Verification = Certification There are broader issues such as food safety that must be met to provide consumer confidence before many of the social “feel good” issues can satisfy the consumer Certification is there to provide consumer confidence, be it Sustainable or Specialty coffee – and there are a dozen such systems – with 4C as the benchmark Then there are multiple certifications in an attempt to further enhance market access or “feel real good” Then there is surplus certified coffee sold as conventional and double counting of sales because of multiple certifications (or conventional sold as certified) For smallholder coffee producers, certification is too complex, and the “feel good”, “happy” consumers are giving a competitive advantage to estate producers (or donor/NGO)! 12

13 The Perceived Market Driven Complexities aBi Trust defines Sustainable Coffee as any coffee that is subject to Good Coffee Practices The World needs more coffee, and especially more coffee entering international trade. That will only happen if the coffee value chain is sustainable There has to be a business case for it = benefit/cost Certified Coffee is being mainstreamed – but largely pushed onto the producer (and the donor) backs as a market access requirement High costs of certification programs forced the issue of Specialty Coffee in pursuit of the ‘premium’ to offset some of the costs or to command exclusivity in the market 13

14 The Coffee Sustainability Models Supported by aBi Trust in Uganda aBi Vision for a competitive private sector led coffee industry in Uganda is based on an agribusiness approach, where smallholders are the primary beneficiaries. The Business Case is: –Sustainability ≡ Profitability ≡ Impact Investing by aBi –If it pays it stays ≡Competitive ≡Repeatable≡ Exit Strategy –Private sector driven, a ‘win-win” for all actors in the VC –Scalable, Replicable The various models (to-date): Producer Organisations and higher tier structures involving GAP, PHH, output aggregation, value addition for farmers through participation in the supply chain to green coffee (e.g.HNS Foundation) 14

15 aBi Trust Sustainability Models, cont’d Eco-washing stations as the business hub, also supporting GAP, quality improvement through red cherries and a more consistent parchment and possibility of origin coffees (e.g.Kyagalanyi/Volcafe) Certified Organic coffee, including central washing stations (e.g. Kawacom/ECOM) Farmer Organisations with backward and forward integration and traceability through to export of green coffee (e.g. NUCAFE) Identification and profiling of origin coffees in the cradle of Robusta (e.g. SCI) Conventional coffee farmers supported in replanting, GAP, PHH, FFS to improve yields and quality, engage in bulking and value addition (e.g. DFAs, Co-ops) so they can be sustainable coffee farmers 15

16 Specialty coffees: “a special class” Some terms: Specialty, Fine, Fancy, Niche market, Gourmet, Differentiated, Premium, Branded coffee, De- commoditized, Trademark/logo coffee, origin coffee These do require Certification/Verification/Traceability Specialty coffee should also possibly satisfy the requirements of being sustainable coffee? Specialty has tones of intrinsic value to the affluent consumer (quality, nature, etc) and limited supply and a consumer willing to pay more for these values (“premium)” 16

17 Additive Contribution – and don’t put the cup before the bean! 17 CERTIFICATION VALUE ADDITION PHH/QUALITY GAP BASELINE PROCESSINCREMENT

18 Is Sustainable Coffee “Sustainable”? The long term future for coffee is Bullish From medium/long term, all coffee has to be sustainable from the perspective of all actors in the coffee value chain – especially the smallholder in the AFCA landscape Smallholders have the opportunity to implement many of the sustainable practices by practicing “coffee farming as a family business” through adoption of known practices then they will be sustainable “Sustainable” in a purely “Certification” sense for smallholder coffee farmers is probably as good as the next donor subsidy. 18

19 Is Sustainable Coffee Sustainable” cont’d? 19 Not one size fits all Smallholder participation is limited in a fully liberalised market. Improved volumes and quality will attract middlemen (hence side-selling), governance (trust) is a serious issue, cash is needed as liquidity in the supply chain, the sustainable (exit the donor) business case cannot subsidise the economically inactive, or those that compromise good governance Supply of Coffee is unlikely to satisfy world demand – especially for internationally traded coffee Furthermore, supply of Sustainable Coffee cannot satisfy projected market demands Sustainability principles apply to any agricultural commodity incl intercropping – and the KISS principle must apply

20 Thank you for bearing with me Webale nyo Ahsantene Amesegenalhu Merci beaucoup Gracias Dank u Shukrun

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