Written by Nathanael Simba Cubaka, Cooperative Advisor DR Congo
In the east of the Democratic Republic of Congo, Agriterra implements the Acting Now for Food Security and Nutrition project in the provinces of North and South Kivu. In South Kivu, on the Ruzizi plain in Uvira territory, we recently marked a milestone: for the first time, 5 cooperatives signed corn delivery contracts with 5 buyers. This is a first, because it's being done before the start of the season. Here's how we did it.
On 26 September 2024, representatives from five cooperatives - ADPA, COOCAPA, COOPABA, COOPADARU, and COOPRITU - gathered at Hotel Wema in Uvira, South Kivu, at Agriterra's initiative. All these cooperatives are Agriterra customers. , The meeting was also attended by delegates from maize-buying companies: Groupe solidaire EKA, Kivu Agrobusiness, Provende Kivu, Ets CAT, Furaisha Kashemwa and also the Saccos PAIDEK and SMICO.
Prior to the meeting, each of the agricultural cooperatives drew up a corn data sheet to assess the cost of production in their area. Each cooperative presented its production capacity to buyers at the meeting, demonstrating that the Ruzizi plain is vast and that they have the capacity to produce large quantities of maize. However, producers lack the means to expand their farms and, even if they did, they have no market for their production.
That's why Agriterra has organised this meeting between cooperatives, buyers and microfinance institutions to solve all these problems.
During the meeting, the parties interact. Buyers are informed by producers of their delivery capacities: quantity, variety, color of corn to be delivered, moisture content, etc. Buyers proposed initial prices, which led to negotiations, with both sides finally agreeing to a price range of $0.35 to $0.42 per kilogram, subject to adjustment based on market conditions before the final sale. Contracts were then signed in the presence of PAIDEK, a microfinance company. Each cooperative secured a contract with specific terms.
A further discussion between the cooperatives and the buyers will take place two weeks before the dry corn is harvested from the fields. This discussion will focus on renegotiating the price in line with the market, so as not to prejudice either party. The price obtained during this new negotiation will be the final price at the time of sale. The fact remains that corn prices vary according to supply and demand, creating tensions between buyers and cooperatives. There's no doubt that, from this point of view, growers don't have much room for manoeuvre when it comes to negotiating prices. However, the glass should not be seen as half empty. For the first time, farmers know in advance that they have contracts that will enable them to sell large quantities of corn. This is a game-changer, because by receiving his money all at once, the farmer can plan his activities and know how to reinvest the income from growing corn.
Prior to Agriterra's involvement in the maize sector, the members of these cooperatives were almost exclusively involved in irrigated rice production. Those who did produce corn did so on a very small scale. So, the 5 cooperatives are embarking on a new adventure. Following the contract signings, our next step is to train cooperative members in good farming practices to meet production demands and environmental standards.
These training courses will involve several cooperative members. ADPA will train 220 members through its G20 groups, which serve as hubs for sharing good farming practices led by designated “agrileads.” Similarly, COOCAPA will train 140 members, COOPABA 280, COOPADARU 160, and COOPRITU 280. Each group’s agrilead will demonstrate techniques to improve yield, with their fields serving as model plots.
To implement good farming practices, the farmers need access to credit. After all, this work requires occasional labour, which must be paid for.
To produce more, several bottlenecks had to be removed. One of these was the signing of contracts with buyers. Indeed, contracts become guarantees for agricultural cooperatives to access credit for marketing agricultural products. , This opens the way to individual credit for the members of the agricultural cooperatives we support. However, cooperative members still need to be fully informed about the available credit from microfinance institutions and other savings and credit cooperatives in the region.
That's why, in August, we organised a tour of the Uvira territory, to train the members of the corn growers' cooperatives in financial education and credit management. In each of the cooperatives, we presented the savings and credit cooperatives present in the area. The staff of these Saccos were invited to present their products. Two credit institutions were invited: PAIDEK and SMICO. Each agricultural cooperative sent 20 members.
The general observation is that farmers do not have access to credit due to a lack of information and a lack of guarantees. As far as the lack of information is concerned, we can say that farmers are better informed as a result. The lack of guarantees is another matter. In this respect, we are looking into the possibility of using deeds of sale of fields as guarantees for individual credit. There is also the guarantee that the cooperative can provide. In this respect, the cooperative must sign its member's credit application. This becomes like a moral guarantee. The cooperative first assesses the member's ability to repay the loan. The cooperative's agronomist will follow up to ensure that members do not sell without repayment.
PAIDEK’s participation during the contract signings with maize cooperatives made them a crucial partner in this initiative. The microfinance institution has committed to financing various stages of the maize production chain. We hope that during this test phase, at least 20% of cooperative members will benefit from credit during season A. Since contracts have already been signed between buyers and cooperatives, the microfinance institution is committed to granting loans to producers, cooperatives and even buyers. Through PAIDEK, the grower is backed by the cooperative, which manages all of their production. The cooperative, in turn, holds the buyer as collateral, with the buyer agreeing to pay the cooperative directly through an account at PAIDEK.
There is no maximum limit for individual loans. The granting of credit will be based on the farmer's needs and abilities, as well as on the expected yield. Thanks to the loan agreement, we hope to see an increase in the area sown and the adoption of good farming practices. Our dearest wish is to see producers and their cooperatives gain access to credit to honour contracts with buyers. This will enable producers to increase yields, by adopting good farming practices. Above all, it will enable members to increase their incomes. This is how we improve the services provided to enterprising farmers. This is how Agriterra is taking the cooperatives of maize growers in the Ruzizi plain to the next level.
