Member of the Month

November 2008: ZAMBIA COFFEE GROWERS ASSOCIATION (ZCGA)

Mission statement:
To produce responsibly and sustainably high quality washed Arabica coffee in response to the discerning market requirements and meaningful economic sector for livelihood.

Mr. Joseph Taguma (left), ZCGA General Manager and EAFCA Chairman (2007-09)

Goals:

1. To develop and implement social development among all members to improve the economical and social development of Zambia
2. To develop and sustain our social achievements as much as possible through our own efforts of the entire workforce
3. To put in place all the required systems to communicate the development and achievements of our social and economic efforts

History: Coffee production in Zambia waited until the 1980's to be initiated in earnest, though first recorded exports date from 1948. However, commercial production only started in 1978 with modest initial successes, coupled with the need to diversify Zambia's exports. This resulted in the government seeking foreign donors for assistance to promote commercial coffee growing in the country.

The idea of a producer association was first initiated in 1986 under the World Bank’s first Coffee Project (Coffee I) and the Zambia Coffee Growers’ Association (ZCGA) establishment was part of the very first preparations for the Coffee II project. The establishment was done as an Act of parliament known as “The Coffee Act of 1989”, with ZCGA being the operative wing of the sectors policy making body, The Coffee Board of Zambia.

The general objectives are:

1. To provide a forum for the existing and new coffee farmers through which they would put forward joint views on the industry strategy
2. To provide the government and international development organizations with a credible counterpart in their dealings with the coffee industry
3. To take charge of the regulation of the industry as advised by the Coffee Board of Zambia, including dealings with the International Coffee Organization (ICO), the Inter African Coffee Organization (IACO) and other international bodies
4. To promote the coffee industry in general

A much more specific objective was to create a credible grower controlled alternative to the existing parastatal marketing channel that handled Zambia’s small coffee crop at that time. ZCGA was thus born and began handling the marketing function.

However, a lot has transpired since the above were put into place. The Zambian coffee industry has passed through a number of difficulties, which have limited the development of the industry. The industry has also not been spared by low coffee prices, droughts and high interest rates.

Services:

1) Marketing: ZCGA’s marketing committee sells coffee for its members through both spot tenders and forward sales. Apart from this, a number of members who meet certain criteria are authorized to conduct their own independent marketing. All physical exports are however, handled by ZCGA and are usually routed via Durban, South Africa, using road and rail. In recent years, rising production in the North has led to the increased use of the port of Dar-es-Salaam in Tanzania.
                                      
The increase in overall production has now led to new marketing initiatives, the most  exciting of which is the Zambica Estates amalgamated “Falcon” – AAA grade (screen 19); “Eagle” – AA grade (screen 18) and “Hawk” – C/PB grade (round screen 14 and slotted screen 11) aimed at the specialty markets of the United States, Japan and Europe.

2) Quality control: The quality control team provides feed back to growers on the quality of their coffee and on the standard of field work and wet and dry processing.  This service is also essential for determining the sales value for auction export coffee and coffee products that qualify to be in the premium quality segment and sold on direct offer basis. Lastly, the quality control team also guarantees the quality of coffee products meant for export before exports are sanctioned.

3) Milling and warehousing: The Association has milling facilities that serve growers without their own facilities and was especially set up to serve the interests of small scale farmers.

Furthermore, the facility is also used to blend coffees from members that may have bits and pieces of products of similar quality but can’t make export lots on their farms. This is then shipped to the association mill for blending and thereby providing members with a continuous sales program through the season and therefore a regular income.

The Association also provides warehousing facilities for members that wish to store their coffee before shipping it or for purposes of pre-shipment finance.

4) Shipping: The Association prepares shipping documentation and clearance with customs for all its sales and sales by individual members with direct sale authorization. This is required by law as well as for logistical purposes as most of coffee export documents such as “export permits” are issued in the capital Lusaka.

Shipments are prepared and directly loaded into containers at the association warehouse or on the grower’s farm. The Association hires lorries to carry containers of coffee to the ports of exit. It also books vessels on the internet at its Lusaka office and issues bills of lading for some of the selected shipping lines, a service that’s extremely invaluable for a landlocked country.

5) Representative (secretarial service): The Association represents its members in government and international organizations related to its affairs and other beneficial interests. It also provides statistical data to the government, Customs Revenue Authorities, the Central Bank and other organizations such as the press.

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