Toward a remunerating price tag to coffee: lessons from the liberalization of the coffee industry in Uganda

Abstract

Coffee is the main cash crop in the Ugandan economy contributing to over 50% of GDP, about 65% of the total export earnings and 80% of household employment. A predominately smallholder practice, coffee farming is done mainly by resource-poor farmers on holdings of 2 hectares of land or less. The perenniality of the crop dictates an intergenerational hold on land, which poses land ownership, inheritance, labor and gender complexities with serious consequences on land and environment degradation and, ultimately on incomes, welfare and survival of the coffee-farming households. It is now widely recognized that the smallholder practices have resulted in land degradation. Nutrient losses to the agricultural system are not being sufficiently replaced, which has subsequently had a serious impact on crop productivity. A trade account of gains and losses of nutrients in the export of the produce at national level is constructed and the sheer scale of resource loss put simply as the “invisible cost” is alarming. And yet evidence now available links soil degradation and poor farming practices to higher susceptibility of coffee to Coffee Wilt Disease (CWD) attack, for instance. Whereas liberalization in 1991 has revamped the sub-sector, it has not nonetheless come without any cones. A “too much opened up” case to critics, it has been distorted, misunderstood and out rightly exploited. With the depressed world market prices currently, pressure has mounted for Uganda to produce for gourmet and specialty market niches. This spells not entirely new challenges but, no doubt, bigger problems for an already over-stretched and more often overwhelmed regulatory system in place.