We, the small-scale coffee farmers can easily make our coffee farming profitable if we shift into miniature cooperative societies mode.
Here is how.
My experience tells me that coffee is all about two key achievements by the farmer; how many kilos you produce per stem and the quality of that coffee.
The quality will guarantee you the best price while quantity multiplies the price. You, therefore, earn more money, multiple times.
If you are a hardworking coffee farmer who produces more kilos of coffee per stem, and top AA grade, and you take your coffee to your local coffee society factory for pulping, then you are doomed.
Why? Because nearly 90% of the coffee that is delivered by farmers to those pulping factories is of lower quality yet it is mixed with your top grade.
This low quality reflects in the final pricing. It will end up knocking down nearly half of the amount of money your coffee was to earn you.
While your AA coffee will fetch a good price either at the auction or in a direct sale, you become a victim of averages particularly if the coffee is sold through the auction.
For instance, if the AA grade coffee from your society factory fetches Sh55,000 per 50kg bag and the other lower grades fetch an average of Sh25,000 per 50kg bag, it means even the AA grade owner will earn the average which is Sh40,000, knocking off Sh15,000.
See, the farmer who invested less will earn more courtesy of your better grade, yet you, who invested more, will earn less.
It gets worse where the averages are for more farmers, and per one kilo as is the case at the society factory level.
So, your investment in a better grade and more beans per stem, which is a costly affair in farm inputs and labour, fails to count because you sold collectively with farmers who produce lower quality.
Miniature coffee coop societies
Therefore, one option is for the hardworking farmers to consolidate their efforts by forming miniature societies, of 2 to 10 farmers for joint pulping and marketing.
As noted above, the common interest for such farmers should the commitment to individually invest to attain the AA grade and more kilos per stem.
If say you are three farmers, each investing well to produce grade AA and a good yield per stem – at least 8 kilos per stem upwards -, you collectively invest in a pulping machine.
Pulping machines cost an average of Sh50,000 upwards. Innovations have availed new pulping machines that do not require the farmer to ferment it for days, cutting the cost of production.
So, such coffee is then is pulped collectively, dried, taken to the miller and monitored, graded under your supervision and then either sold directly or through the auction. Either way, grade AA will fetch the best prices.
This means that the investment you made in your coffee, for grade AA and better yield, will not be compromised, because all the three of you committed to a similar goal.
Today, marketers are willing to negotiate predetermined minimum price assurance before taking the coffee to the auction.
For instance, some will guarantee you a price of Sh900 per kilo of milled coffee. This is just a working average.
This amount is about Sh150 kilo of the on-farm coffee bean. Minus expenses, that would give you at least Sh100 net income per kilo.
Assuming you have one acre of coffee, with 600 stems, producing 8 kilos per stem, you get a net annual income of Sh480,000 or Sh40,000 net per month.
If you eventually increase your yield to 15 kilos per stem, then, you get an annual income of Sh900,000 or Sh75,000 net per month from an acre and much more if you hit the psychological 20 kilos per stem, a net of Sh100,000 per month.
Therefore, the future for profitable coffee farming is in mini cooperative societies of up to 10 people, who agree to invest in the quality and quantity of their coffee.
The ripple-effect would be that such farmers can agree to add more value to their coffee, by for example flavouring it, turning to organic farming, making ready to drink coffee products, and selling it as a specialty brand among others. This will flow in more income.
It is possible.