A Coffee Shot to Boost Burundi Economy? Farmers Are Lukewarm

JOHANNESBURG (Capital Markets in Africa) – Bumper coffee harvests were supposed to fuel Burundi’s recovery from three years of political upheaval. Tell that to Jean Ntungiyabandi, one local farmer who’s just called it quits.

The tiny East African nation, which counts Starbucks Corp. among its customers and gets at least 80 percent of its foreign exchange from coffee, wants to double output by 2023. But delays in local payments are squeezing its 60,000 small-scale producers, complicating plans to revive the economy as Burundi tries to recover from an economic and political crisis that’s claimed at least a thousand lives.

“Coffee, as far as I’m concerned, is finished,” said Ntungiyabandi, a father of five who has a small plot in Mwaro, central Burundi, and previously grew as much as 300 kilograms (661 pounds) a year. “I will exploit my land in another way.”

Still, in more than a dozen interviews in seven of Burundi’s 18 provinces, most coffee farmers said they’re determined to stick it out, even as factors including low prices and fertilizer shortages mean they make little or no profit and are unable to hike output.

Coffee-growing, encouraged in Burundi in the 1930s when it was a Belgian colony, is a vital cog in the agriculture-led economy, the smallest in East Africa. More than half the country’s 11 million people depend on it for their livelihoods, and it’s key to plans by President Pierre Nkurunziza’s government to revitalize economic productivity that’s been in the doldrums since deadly unrest flared in 2015 as he secured a third term.

Angry Farmers
“Farmers are angry because they’re earning little,” said Joseph Ntirabampa, leader of the Coffee Farmers Confederation, which is lobbying authorities to raise the prices paid to producers. He said the average coffee plant produces 800 grams (1.8 pounds) per annual harvest; on a typical 100-tree plot, with the beans bought at 500 francs per kilogram, that can mean income of just 40,000 francs ($22) a year.

“We want the government and partners to invest in coffee by supplying enough fertilizers,” which can increase output from each tree, Ntirabampa said. Authorities pledged in August to invest $81 million in steps including fertilizer distribution.

The industry regulator has accused local buyers’ associations of not exporting some of their purchases, as well as failing to repatriate about $23 million from foreign sales that were made. Both situations, they say, held up farmers’ pay.

Growth Pangs
Economic growth this year in Burundi, which is about the size of the U.S. state of Maryland, is estimated at 0.4 percent by the International Monetary Fund — and a coffee renaissance may be some way off.

Burundi produced 16,079 tons in 2017-18, some 20 percent more than the previous season, but still about 13 percent less than in 2014-15, according to the central bank.

Immaculate Sindabimenya, a 60-year-old who’s farming a small plot about 40 kilometers (25 miles) from Burundi’s commercial capital, Bujumbura, is among those finding times tough.

“What I get from this coffee is not even half of what I spend on maintenance” of the farm, she said. “Sometimes I feel I could quit this.”

Agriculture Minister Deo Guide Rurema has defended the amounts paid to farmers. In an interview with local newspaper Burundi Eco in August last year he said the government’s 2016 decision to set the minimum price at 500 francs per kilogram has protected producers from speculators and that fertilizers are available. Government officials didn’t respond to calls seeking comment.

‘Derisory’ Pay
Francois Mbabare, who has a small plot in the central province of Gitega, described the prices paid as “derisory” and said officials should take part in coffee-farming to understand the hardships.

“We work for nothing, especially since we’re not allowed to set prices for the coffee we produce ourselves,” he said.

For some farmers like Hakizimana Emmanuelline, who was widowed during Burundi’s civil war in the 1990s, coffee-growing has become so integral to their family and community that they can’t imagine abandoning it.

“I can’t do much with the income from coffee, but nor can I live without it,” she said from her farm in Kayanza province in the north of the country. “I am happy to see it even though I benefit almost nothing.”

Source: Bloomberg Business News