On August 13, 2021, President Museveni signed the National Coffee Bill into law. The new law repeals and replaces Uganda Coffee Development Act, Cap 325, which has been in effect for 29 years. The National Coffee Act, per the authority, is intended to address farmers’ current demands as well as their long-term objectives but this is unrealistic and bound to fail.
The prior regularisation, according to the Uganda Coffee Development Authority (UCDA), only regulated off-farm activities of marketing and processing while on-farm activities like planting materials, nurseries, harvesting and post-harvest handling were outside its mandate. However, coffee accounts for 13-15 percent of total export profits and employs over 7 million Ugandans; every policy that affects it should be closely scrutinized!
The Act places all on and off farm activities in the coffee value chain under the UCDA. For example, according to the Act, “a person shall not operate a pulpery, buy coffee, grade coffee, roast coffee, brew coffee, operate a coffee shop or coffee store, a warehouse of coffee huller or process or export coffee on a commercial basis without a license issued by UCDA.”
These restrictions are a barrier to free trade and limit growth, innovation and efficiency in the coffee sector.
The Act also requires coffee farmers to register with UCDA and receive an identifying number, criminalising certain offences related to the production of coffee. For example, operating an unlicensed coffee nursery or seed farm, and selling substandard planting materials, are only a few of the offenses listed under section 53 of the Act. These limits are not well-intentioned, and they will quickly become problematic.
To begin with, registering all coffee farmers and issuing licenses to coffee merchants is an impediment to the industry. It is dangerous to put a high-priority sector in the hands of a government agency in a country where the government and its agencies are deeply involved in incessant corruption. In Uganda, the bureaucracy hinders efficiency and productivity. As a result, trying to register and license coffee farmers and traders will be a futile exercise.
Furthermore, the stiff penalties stipulated by the Act are suffocating to the coffee farmers. The Act provides for a fine not exceeding 100 currency points (2 million Uganda Shillings) and or imprisonment not exceeding four years, both of which are extremely heavy penalties. These regulations are a stumbling block for farmers and traders, and would not necessarily boost coffee production. It is just absurd to suppose that a law can improve coffee production!
The Act is a clear indication that Ugandan legislators are disconnected from the concerns of ordinary Ugandans. It would be preferable if the government implemented agricultural programs like Operation Wealth Creation (OWC) to improve the quality of seeds, fertilizers and other farming materials. Also, leasing advanced quality machinery to coffee traders would ensure the manufacture of healthy and quality coffee beverages. In this way, the new developments, advances and challenges that have emerged in coffee research and extension services would be realistically addressed.
Restoring the power of coffee trade cooperatives would ensure that coffee farmers and traders have a voice in determining the price of coffee on the market. Currently, a kilo of coffee beans is sold at 2000 Uganda shillings (less than a dollar), yet the same quantity sells for an average of 3 Dollars on the international market. Empowering trade cooperatives such as Bugisu Cooperative Union, Ankole Coffee Producers Cooperative Union among others, would give farmers bargaining strength in price determination, legal authority, and protection of their interests through collective bargaining. Going further, Uganda’s participation in international coffee treaties and accords would improve coffee production. This would allow coffee growers to expand their market, resulting in higher production.
Also, being a signatory to international coffee treaties would open dialogue on free trade and market policies for the benefit of farmers and traders. However, with Uganda’s withdrawal from the International Coffee Treaty, local coffee is bound to lose market to the detriment of farmers and traders. This regulation makes one wonder if the government is truly concerned about the 1.7 million households coffee employs.
Fundamentally, the Act fails to provide solutions to the challenges that coffee farmers and traders face. Instead, the Act complicates and obstructs the work of those involved in coffee production. The UCDA has used erroneous means in attempting to boost coffee production. The Act hence needs to be repealed before any harm is done to the coffee sector!