Rewarding loyal members leads to commitment and increased coffee production

The 2015/2016 coffee season was a record year for the Mviwambi cooperative in Tanzania, purchasing over 500 tonnes of coffee beans from its members. This was in spite of the fact that the previous season was a disaster, with members selling much less coffee to the cooperative. In an effort to tackle this issue, focus was shifted to the most loyal members and they were the first to be rewarded when things started looking up.

Mviwambi is a Tanzanian coffee bean cooperative with 1800 members. It collects and sells the coffee beans grown by its members and supplies high quality fertilisers and pesticides. There were several aspects of this cooperative which attracted Agriterra, including cost-awareness, a sense of solidarity and its potential for growth. The board of management is highly motivated and very active. They also recognise that small-scale farmers benefit hugely from working together in a cooperative context. 

Decrease in coffee collection
During the disastrous year of 2014/2015, many members suddenly turned their backs on the cooperative. This was because private coffee traders were offering more for the coffee than the cooperative could. In this case, making the switch is a logical decision; however, it's not a sustainable solution in the long term. Due to high interest costs for the supplier of pesticides and fertiliser, as well as the inflexible attitude of the local bank dictating the purchasing price, it was difficult for Mviwambi to compete with the private purchasers. But in 2015/2016, something changed.

Since 2014, the cooperative has been working with Agriterra on a range of business development elements, such as  business planning, financial management, marketing, member commitment, governance and member financing. As a result of these positive developments, the cooperative - via Agriterra - received a loan from the French investment fund, SIDI. The loan was used to purchase large batches of fertiliser and pesticides.

Focus on loyal members
To be able to compete with the traders, it's essential to build up equity capital, as that's when interest expenses will start to decline. But how do you convince the members to invest in their cooperative? Especially after a season which left everyone disappointed with the low prices. The cooperative opted for a strategy which places loyal members at its core. They invest and are therefore the first to reap the rewards from the cooperative. This means they are the first to gain access to good quality and affordable fertilisers and pesticides, giving them a greater incentive to invest in their cooperative. Now that the cooperative is proving its worth, more farmers want to sign up.

Following a careful member screening process and the signing of contracts, production resources were acquired. As a condition to joining, members had to sell their coffee to Mviwambi. Plenty of 'disloyal' and non-members were keen to order fertilisers and pesticides from Mviwambi, given how difficult it is to get out in the Tanzanian countryside, but Mviwambi worked on the basis of the rule: first supply the coffee, become a member or pay a contribution. This has already produced the following results:

  • Record year of coffee bean production
  • Dozens of new members have registered
  • Members who invest, enabling the repayment of the SIDI loan

Future
Mviwambi clearly demonstrates that 'disloyal members' go back to being loyal members if you approach them on their calculating attitude.

"We have to pull out all the stops to maintain competitive services and prices so there's no reason to go looking elsewhere", says Chotel Nsembele, chairperson of Mviwambi. "After a couple of seasons they'll also develop an emotional commitment and have less trouble investing in their cooperative". 

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