Ibero Uganda’s Mityana and Masaka Buying Stations
In November 2019, Ibero Uganda set up two new regional coffee buying stations—one in Mityana, approximately 70km west of Kampala, near Lake Wamala; and one in Masaka, just over 100km south of Mityana. The motivation for building the stations was to bring services closer to Ibero’s clients. The benefits, though, both to farmers and to Ibero Uganda, have exceeded those hopes.
Having a presence in the field has provided an avenue for more frequent exchanges between Ibero and its customers, building better working relationships. The stations have increased accessibility to market, and farmers feel encouraged to deliver any quantity of coffee they have collected, whereas previously they would have to wait to collect volumes large enough for a truck.
In a short period of time, the buying stations have also managed to solve some direct challenges many farmers faced. To start with, farmers enjoy reduced transport costs, versus bringing coffee to Kampala. The security risks associated with coffee transportation on highways—e.g. theft, accidents, etc.—have also been eliminated where highways can now be avoided.
One of the unintended benefits has been advancements on the subject of gender. We have noticed an increase in the number of women involved in marketing. Because of the convenience of location and faster turn-around times between collection, bulking, processing and ultimately marketing coffee, we see more women participating in both coffee collection and delivery to the buying stations.
There has also been quality improvement in coffees received from the farmers. Farmer group representatives are given immediate feedback on the quality aspects they need to address, and our teams are seeing immediate improvements in quality in subsequent deliveries. Moreover, because we have an opportunity to bargain more closely with our clients, there has been an increase in the volumes of coffee delivered to us that would have otherwise been lost to buyers closer to the farmer.
“Transportation of coffee from one place to another for long distances requires special vehicles and proper handling of the commodity. This, alongside other expenses like food, transport and accommodation of farmer representatives, adds to the overall cost of marketing coffee,” said Mr. Katwere Moses Nkowe, chairman of the Nabumbugu Farmers Cooperative Society. “If purchased locally, and close to farmers, it drastically reduces the overall costs associated with the marketing of coffee and, ultimately, allows farmers to get a better price.”
Ibero is also giving back to the community by hiring young people as off-loaders. All the off-loaders at our coffee-buying stations come from the nearby communities.
Coffee farmers are enjoying fair and transparent grading and are being offered competitive prices in line with world market rates. And all transactions at Ibero buying stations are efficient and impartial. From independent farmers with just one sack of coffee to larger co-operatives with truckloads, all are guaranteed payment within one day of delivery.
Because it is a win-win for both farmers and Ibero, over time we expect to increase the volume and quality of coffee purchased, from both farmers and traders alike.
During COVID-19, Remaining Committed to Farmers
On March 18, when the government of Uganda implemented the first national measures to prevent the spread of COVID-19, we at NKG BLOOM were still finishing a major distribution of fertilizer. We quickly transitioned from the usual, large gatherings to small, local distributions, to ensure that we could maintain safety distances and protect our team and farmers.
We were all relieved that we managed to deliver the requested fertilizer in time for the farmers to apply it with the rains. But the period of relaxation that usually follows a disbursement round did not set in.
Instead, we were faced with many of our young Field and Risk officers stuck in villages far from their families, and with uncertainty among farmers about the future. We ourselves were also uncertain, as we wondered about the duration of the measures and the implications they would have on our work, which is based on maintaining close relationship with farmers. Still, prioritizing the health of our team and farmers, we halted all field activities and determined that our Kampala staff should work from home.
Since then, we have worked on, and continue to work on, finding solutions to further our services for farmers, while keeping everyone safe. We started with internal trainings and materials for the team, to inform them about how to prevent the spread of COVID-19. And then we extended the knowledge to farmers, as we called every single one of them to learn how they are doing and, when needed, give them advice about on how they can protect themselves.
Eventually, we also went back into the field to pay visits, wearing masks and walking long distances, as cars couldn’t be hired until mid-May and motorcycle can only transport goods and not people.
While the times have been challenging, we are proud to see that our team is more motivated than ever to support farmers, and that farmers remain committed to coffee and NKG BLOOM. Efforts to digitize— like mobile money payments, applications for advances and balance checks via USSD codes—have provided great advantages for us, as we continue our work, and we are exploring new ways to bring knowledge to farmers digitally.
Still, at the end of the day, coffee is a physical product and needs to be moved by people. The buying stations we set up this year have been very supportive and have worked to implement safety measures and ensure that farmers can continue to safely bring their coffee to us. Both in moving toward digitalization and shortening supply chains, COVID-19 has served as a catalyst, accelerating modern developments.
Standing jointly with the Ugandan coffee sector, Ibero Uganda and Kaweri, we’re proud to have contributed to Ugandan government’s effort to fight COVID-19 and support the country’s vulnerable populations.
Closing the gender gap
This February, Ibero started its couple seminars with the aim to close the gender gap within farming households making them more resilient to shocks, increasing coffee production, and income. More seminars will follow, once COVID-19 permits.
If women had the same access to productive resources as men, families could increase their yields by 20-30 percent (FAO). That’s an impressive productivity gain with the potential to improve farmer livelihoods without adding to costs. So, what can we do to bridge the gap?
Let’s start by looking into the nature of the problem. Within the coffee sector in Uganda, there’s ubiquitous evidence to suggest serious gender inequality. This inequality stems from unequal pay for the same work, and women performing tasks that are less-well paid, like sorting coffee by hand. However, the most significant gender gaps are observed within households. Both men and women are collectively responsible for various activities at their coffee farms, such as harvesting, weeding and drying. However, women often don’t own the land or other productive resources, and the proceeds from the joint activities are considered to belong to the men. Thus, the men decide how the money gets spend.
This unequal access to the income generated jointly, has three main negative repercussions: 1) Women have less incentives to put their best efforts and invest money into the farm, if they don’t have a say how the returns get spend. 2) Limited empowerment of women undermines the potential of future generations and entrenches these generational inequalities for many years to come. Evidence suggests, that women tend to spend more on health care, nutrition and education. 3) It incentivizes women to ‘steal’ some of the produce to earn money that they can freely use. However, as this produce has to be sold secretly, it often gets sold unprocessed – in cherry not as dried coffee (kiboko) – and at low prices, reducing the income of the household.
Faced with this gender reality, and the desire to change it, Ibero Uganda Limited together with its partners decided to launch a gender-based intervention approach known as ‘couple’s seminars’. The main objective of these couple seminars is to promote joint planning and decision making at household level to ensure that both gender groups have the same power, opportunity and voice to participate in the coffee growing activity, take better decisions on how to run their business, and ultimately generate higher income and manage it better.
Over 20 couples were invited to participate in the first two-days seminar in February in the Lwengo district, where a Village Coffee Organization (VCO) was established by Ibero about a year ago. During the seminar participants were given the opportunity to interact, identify sources of gender inequality within their household and understand the impact these inequalities have had on their household’s welfare.
In just two days, it was possible to observe tangible differences in couples’ behaviour! For example, a female participant opened up on how she had been stealing and selling off fresh and dry coffee which went on unnoticed by her spouse for a longer period of time. This was, she said, due to the fact that “I am actively involved in all pre- and post- harvest activities of coffee such as coffee picking and drying, and yet, received nothing after the sale”. Her spouse recognised that the source of this behavior was the missing appreciation of each other’s contribution. The two reconciled and promised to start a new journey jointly.
At the end of the seminar, all participants voluntarily made commitments on the changes they want to implement, and to share their learnings with other members of their producer organizations. One couple decided to plant two new coffee trees as a mark of the new beginning and to remind them that they do better working jointly rather than individually or against each other. Follow-up visits will show how the commitments get realized, given that behavior changes don’t happen overnight.
Farmer has clearly improved family's livelihood after year one
Meet Mrs Naggayi Florence, mother of 6 children, taking care of all expenses by herself. She gets her income mainly from her one acre coffee garden. Before Ibero Uganda offered her the high quality fertilizer advance scheme, she used to struggle and earn less than UGX 100,000 (USD 27) in a season. This would not sustain her from one season to the next, she would use all the money on family day-to-day expenditures. The greatest challenge was how to pay school fees for her children since paying school fees and coffee harvest do not coincide. The village traders used to give her loans at a low fixed price per kilogram of coffee throughout the season.
After less than a year of joining NKG BLOOM, she has not only been able to get a fair price for her coffee but also to pay for the school fees from the NKG BLOOM Mobile Money credit line. This credit line is available any time she needs it, through sending a simple USSD-code from her personal phone: “It has never disappointed me”, she says. She is already expecting to at least double her harvest for the next harvest and hence her income increasing substantially as well. And this is just the beginning after less than a year applying fertilizer and practicing good agricultural practices.
Neumann Kaffee Gruppe (NKG) takes its business in producing countries to the next level with the creation of NKG BLOOM, a globally unique impact
banking–backed initiative which will reach 300,000 coffee families by 2030.
NKG BLOOM - Coffee sourcing with a purpose.
Hamburg, Germany: Neumann Kaffee Gruppe (NKG), the world's leading green coffee service and trading group, has for decades pioneered real sustainability in the coffee world with a clear vision for the necessity of an economically viable business for all involved in the green coffee supply chain. NKG runs a diverse variety of sustainability projects, in all sizes and scopes, in nearly all coffee-producing countries. These include activities such as those of International Coffee Partners, as well as managing its own larger scale farms as vital parts of coffee communities in Brazil, Mexico and Uganda. Now, NKG is furthering these efforts and introducing a new dimension to its business — and an important step towards responsible business conduct.
In response to the long-term impact that price-volatility, climate change, adverse weather conditions and politics are having on coffee farmers’ ability to generate a reasonable return from their work, NKG is introducing NKG BLOOM: a long-term sustainable-sourcing initiative designed to address poverty in coffee communities, financially empower coffee farmers and ensure a healthy future for coffee.
NKG BLOOM is not a quick fix or customer drivers’ scheme but a long-term investment in and commitment to the weakest of those involved in the green coffee chain in full knowledge of their critical importance to the business of NKG and our industry overall. NKG BLOOM is a unique combination of field-based educational efforts, real-time mobile technology and the industry’s first impact banking–backed initiative for coffee production.
“NKG NKG BLOOM is not a marketing strategy, it is not a philanthropic endeavor or a feel-good project. It’s about the way we want to do business in the long term. It will cost us a lot of money and effort, but it is simply the right thing to do,” says David M. Neumann, Neumann Gruppe’s Group CEO. “Lending to smallholder farmers in some of the poorest places in the world is a risky proposition, but it´s critical to unlocking the potential that these farmers hold for global agriculture and development in their own countries and communities.”
To form the core of NKG BLOOM, NKG led the creation of a Coffee Smallholder Livelihoods Facility — an innovative $25 million revolving facility involving leading European banks ABN AMRO, Rabobank and BNP Paribas that was signed into existence in August of this year.
Also, and for the first time, the partner banks will share the direct risks on farmer defaults. The facility is further backed by two complementary default guarantees by the U.S. Agency for International Development (USAID) and IDH the Sustainable Trade Initiative.
NKG has set itself the ambitious goal of reaching at least 300,000 coffee families through NKG BLOOM, in 10 major coffee producing countries by 2030. In doing so, it will offer urgently needed resources, such as finance, farm-input and know-how. In 2017, a pilot project was launched as NKG BLOOM Uganda.
NKG is working with NewForesight, an independent strategic consultancy
specializing in sustainability challenges, as external long-term partner and validator of NKG BLOOM, to ensure it indeed delivers provable, structural changes. In 2019, NKG BLOOM will be
introduced in Colombia, Honduras, Kenya and Mexico, and furthered in Uganda, with the establishment and staffing of permanent Farmer Services Units (FSUs) based at the respective local NKG
company. The FSUs will be charged with realizing NKG Bloom's three key tenets:
• Enabling farmers to realize their full potential
• Supporting inclusive sustainability
• Striving for transparency and traceability
“Ultimately, the Smallholder Livelihoods Facility enables us to bring the power of the global financial markets — long the missing piece — to smallholder coffee farmers,” says Catalina Eikenberg, who heads NKG Sustainable Business Unit in Hamburg. “We’ve set ourselves an ambitious goal and we’re excited to make it happen.”
NKG BLOOM - Coffee sourcing with a purpose.
Get to know our global website:
First success of Village Coffee Organizations (VCOs) for
non-organized farmer groups
From October 2018, Ibero Uganda decided to offer its services to farmers not organized in farmers’ groups. We developed what we call the ‘Village Coffee Organizations’ (VCOs). We go to districts where coffee farmers never received good agricultural trainings nor finance, and we train them. We organize Farmers Field Schools (FFS) and we build capacities with lead farmers that are chosen among their pairs. We explain the benefits of selling their coffee already processed. We encourage them to add value to their production, so not only the farmers produce more, but they also get a better price for it. Here are 2 success stories among the VCO farmers:
In October 2018, 58-year old Luyinda Edward, joined the NKG BLOOM programme under the new and innovative business model of the Village Coffee Organisation (VCO). Edward lives in Ndagwe Sub-county in Lwengo district and has 18 acres of coffee trees. When Edward joined the programme, he started attending Farmer Field School (FFS) sessions that were organized as part of the activities under the programme for retooling farmers with agronomic skills required to improve the health of their coffee trees. For example, through these sessions, Edward admits that his coffee picking behavior has improved significantly and so is the quality of coffee from his farm. He has also learnt to implement important agronomic practices such as desuckering which, prior the FFS, were not prioritised. The FFS sessions have also promoted a harmonious working relationship within the community in his village. Before joining NKG BLOOM, Edward was clearing a loan from another source and could not afford buying fertilisers. He therefore enrolled on the program and was advanced 575 kgs of fertiliser (NPK) in March 2019 season. He has been applying fertilisers once a year but now thanks to NKG BLOOM programme, Edward is able to access and apply fertilizer to his coffee trees twice a year. Edward admits noticing a price difference through selling coffee to Ibero (Uganda) Limited than he would get when he sold the coffee at the hulling station.
Sseruyange Joseph decided to start selling his coffee to Ibero (Uganda) Ltd in November 2018 through Ndagwe-VCO. He owns 5 acres of coffee trees and was advanced 200 kgs of fertiliser (NPK) in the March 2019 season. During the same period, Joseph was also advanced a tarpaulin which ensured that he stopped drying his coffee on bare ground. He was also advanced a mobile money pre-payment for his coffee of UGX 500,000, which he used to top-up on his savings and used it to acquire a piece of land that he plans to use to expand his coffee farm. With fertiliser from NKG BLOOM, Joseph admits that the health of coffee trees has shown great improvement. For example, blossoming flowers have been intense that before and the coffee trees are ever green despite the dry season.
First NKG BLOOM DAY during 6th cycle of fertilizer disbursement
On the occasion of Mr. David Neumann’s (NKG’s Group CEO) visit to Uganda, which has coincided with the sixth cycle of fertiliser disbursement, Ibero organized a “NKG BLOOM DAY". This event took place on 19th of August 2019, in the Nabumbugu farmers’ cooperative, where Ibero had launched the NKG BLOOM operation in March 2017. In doing so, Ibero brought together all partners with a keen interest in promoting value chain development in Uganda to witness the implementation of NKG BLOOM Uganda operations as well as give them an opportunity to interact with coffee farmers that have benefitted from the services of the Ibero Farmer Service Unit. Working together with the right partners made financing coffee smallholders possible (follow the link to see > our partners).
Not even 3 years after the beginning of the NKG BLOOM Uganda, the services offered to smallholders evolved. We don’t only distribute high-quality fertilizer on advance, we are developing a whole environment to support coffee farmers and their farmer groups: from mobile money advances for farmers to further invest in their farms or to pay for school fees to incentivizing farmers’ groups to bulk more and better quality green coffee. We are even about to pilot long-term finance to allow farmers to invest in their coffee garden in a sustainable manner. From a Farmer Financing Unit, we are evolving into a Farmer Service Unit. We are not a project. We are here for over 20 years, and we will keep growing, and blooming together with the farmers.
But it’s not just that: against all odds, we have over 99% repayment! To us, this is the best evidence that what we do makes sense to the farmer: the farmers we work with are entrepreneurs: they understand the advantages and benefits of what we offer, and because of it, they want to continue, and every season, we have more farmers applying to the scheme. And every season, we receive more coffee.
Within this 6th distribution of fertilizer, we distributed over 600 tons of fertilizer to almost 5000 farmers in 70 different farmers groups located in 10 districts.
Fertilizer distributed to more than 2.500 farmers in 2018
During the latest disbursement day, we doubled the number of farmers that have being distributed fertilizer between March and August 2018.
In 2018 overall, we distributed 540 tons of fertilizer to over 2500 coffee smallholders. Compared to the overall fertilizer Ugandan consumption (estimated at around 55,000 tons per year in 2016) NKG BLOOM Uganda is contributing 1% of the Ugandan fertilizer consumption!
It is also estimated that the majority of the fertilizer used in Uganda is going to the big sugar cane and tea plantations. World Bank statistics estimate the average usage of fertilizer in Uganda is 2.1kg per ha (just for comparison, it is 202kg per ha in Germany). This fertilizer enables smallholder to double their coffee income in less than 2 years. And with adding the mobile money component, we enable farmers to get rid of middle men and get a fair price for their coffee.
We keep on working hard to support even more farmers in the upcoming year!
Farmer harvests 6-7 kg cherries per coffee tree instead of 2 kg
In 2014, 39 year-old Mukabera Rose decided to take charge of her life again and left her abusive husband. She started making a living through her 2 acres of planted coffee, pigs and
chickens. In August 2017, she took
USD in mobile money advance, which she used to pay for school fees and buy cow dung to fertilize her orange trees. For the first time in her life she did not have to go to the local coyote to access
cash for this critical need.
Through NKG BLOOM Uganda, she applied chemical fertilizer in March and August 2017 to her coffee trees for the first time in her life and could harvest 6-7 kg cherries per coffee tree instead of 2 kg without applying fertilizer. That's an immense improvement. Keep it up, Mukabera!
Farmer estimates that his production has increased
Genza Simon is 27 years old and supports a family of 7 persons. He owns 500 coffee trees on an area of 1.5 acres and had never used fertilizer before he started participating in NKG BLOOM Uganda
nine months ago.
After his successful application he received a fertilizer advance of 100 g per tree in March and 100 g per tree in August. Now it is main coffee harvest season and he estimates his coffee production per tree has tripled from 2 kg to 6 kg. That is a 200% increase in less than a year - we are impressed!
Meet one of the customers of our Farmer Financing Unit (FFU)
Rajab Kiwanuka has participated in NKG BLOOM Uganda for the last two seasons and has already sold 17.087kgs of kiboko (dried coffee cherries) to the DC. By now, he has borrowed 500kgs of CAN and 500kgs of NPK fertilizer for his farm measuring 10 acres as well as approx. $600 in cash. We are looking forward to see more farms bloom and farmers smile like Rajab!
NKG BLOOM Uganda officially launched in Hamburg
On Thursday, September 14th, all partners of NKG BLOOM Uganda met in the headquarters of Neumann Kaffee Gruppe in Hamburg for the official kick-off of NKG BLOOM Uganda. The event was opened by David M. Neumann (Managing Partner of Neumann Gruppe GmbH) followed by several partners and stake-holders in the presence of the Ambassador of the Republic of Uganda, J.M. Muhindo. Speakers representing their companies or organisations presented their individual shares in NKG BLOOM Uganda, what challenges they faced so far and why they continued to be very enthusiastic about the programs’ success. Catalina Eikenberg, Head of Sustainability at Bernhard Rothfos, confirmed this enthusiasm by bringing the first positive results and lessons learned.
The presentations were followed by a Q&A session and a demonstration cupping, after which all guests had the opportunity to get to know each other over a light dinner and drinks.
Second fertilizer disbursement succeeded
From 15th to 17th August, representatives of Yara and Ibero Uganda has been disbursed the next Yara fertilizers, reaching 493 farmers at seven DC's. Around 200 farmers in a pilot DC also
have access to cash advances which they can request through their mobile phones, using a USSD code and mobile money.
One of our participating farmers
This is Haawa Namusoke. She has 2.5 acres of planted coffee and supports a family of 5. She is the head of household. She took an advance of 300 kg of Yara fertilizer and approximately $100 in cash from us in March.
The first coffee will be
After the first fertilizer application in March, the coffee is growing very well and is ready to harvest soon.
Mobile Money Cash Advance
is ready to use
Together with the Ibero Farmer Financing Unit team the first farmers are testing our mobile money cash advance request by dialing a USSD code.
General Assembly in Nabumbugu
A couple days ago, we held a general assembly in Nabumbugu to introduce our products to the farmers. It is the first DC where we have disbursed fertilizer and cash to so far.