Drew, Clive (Agribusiness Director, ABI Trust)

Report
Agribusiness Initiative Trust
SUSTAINABLE COFFEE
INITIATIVES IN UGANDA – FROM A
DEVELOPMENT PARTNER’S
PERSPECTIVE: aBi TRUST
Presented by
Clive Drew
Agribusiness Director
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
www.abitrust.com
African Fine Coffees Association Conference &
Exhibition
Commonwealth Resort, Munyonyo, Uganda
February 16th 2013
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
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 multidevelopment 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
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
Where is the Planet Earth headed?
“Full Planet, Empty Plates” - Brown
Where is the Bull?
6
Competition for Space: Projected
World Cereal Consumption
Other
Livestock
Human
Source: FAO
8
The Yield (Productivity) Response
8
Cereal Yields (Kg/Ha) in Developing Countries
5000
4500
East Asia & Pacific
4000
3500
Latin America &
Caribbean
3000
South Asia
Middle East & North
Africa
2500
2000
1500
Sub-Saharan Africa
1000
500
0
1961
2005
The tenets of sustainable coffee (3-P’s)
PEOPLE
(Social)
PROFIT
PLANET
(Economic)
(Environment)
10
So the First World decided to “fix it”
What next?
CSR?...
Rights-based
Gender & Youth
HIV/AIDS
Climate
Change/Green
Growth/Carbon
footprint
Land Rights,
Succession
Planning
Food Security
11
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
12
donor/NGO)!
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
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
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
Specialty coffees: “a special class”
• Some terms: Specialty, Fine, Fancy, Niche market,
Gourmet, Differentiated, Premium, Branded coffee, Decommoditized, 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
Additive Contribution – and don’t
put the cup before the bean!
CERTIFICATION
R
E
L
A
T
I
V
E
VALUE ADDITION
PHH/QUALITY
I
N
C
O
M
E
GAP
I
N
C
R
E
M
E
N
T
BASELINE
PROCESS
INCREMENT
17
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
Is Sustainable Coffee Sustainable” cont’d?
• 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
19
must apply
Thank you for bearing with me
Webale nyo
Ahsantene
Amesegenalhu
Merci beaucoup
Gracias
Dank u
Shukrun

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