Agriterra’s advice has led to great success
Written by Ibrahimu Mwankanye, Cooperative advisor Tanzania
In Mufindi District in Tanzania, a total of 1,807 small tea farmers are organised into 16 Primary Tea Cooperatives. These cooperatives sell green tea leaves to three major tea processing factories: UNILEVEL TEA CO. LTD (now known as AKATERRA TEA CO. LTD), MUFINDI TEA & COFFEE CO. LTD and KISIGA TEA FACTORY CO. LTD.
In 2020, Agriterra started collaborating with one of the 16 Tea Primary Cooperatives, known as MKONGE TEA Block Farm Primary Cooperative. Characteristics of the cooperative:
- Servicing a total of 652 tea farmer members
- Biggest tea block farm in Mufindi District with more members
- Producing an average of 2.3million kgs of green tea leaves per year
- Owning an office & warehouse (for storage)
- Having strong board members & management team
- Possessing 3 trucks & 1 tractor for the transportation of green tea leaves to the tea processing plant
The collaboration started with member commitment, strengthening of the organisation through financial management and governance training and the development of a strategic plan.
In the implementation of the Action Plan for 2020, one of the key initiatives was to conduct a workshop for the development of a Strategic Business Plan for 3 years. The ambition of MKONGE Tea farmers was to establish their own Tea Processing Plant. In the Action Plan 2021 the primary objective was to initiate this establishment. The work plan focused on a feasibility study on tea production in Mufindi District.
Proposed site for construction of Tea Processing Plant
In November 2021, Agriterra Tanzania collaborated with tea experts from Kenya, namely Mr. Nelson Kibet Ngeno (Kenya local Agripooler & General Manager of FINTEA Cooperative) and Wilfred Chepkwony as Kenya Cooperative Advisor.
In joint collaboration with the Tanzania Cooperative Advisor, the feasibility study led to the conclusion that MKONGE Tea Block Farm alone cannot sustain a single processing line in the tea processing factory. It emphasised the need for Mufindi out-growers to unite to ensure an adequate supply of green leaf.
The majority of farmers support the collective vision, now known as the Mufindi Smallholder Farmers' Dream. The recommendations include consolidating efforts among Mufindi out-growers for a sustainable green-leaf supply and drafting a business plan for the Tea Processing Plant in 2022.
Between 30th April and 9th May 2022 a Business Plan for a Tea Processing Plant was developed. The recommendations emphasised that Mkonge’s dream of setting up a tea processing factory is feasible only if all current out-growers in Mufindi area unite.
On 5th February 2022 MUTCOJE LTD (MUFINDI Tea Co-operative Joint Enterprise LTD) was formed, consisting of 16 Tea Primary Co-operatives engaged in tea cultivation in Mufindi District. It was officially registered on 22 September 2022. The farmers shared common needs, which included access to agricultural inputs (fertilizers and chemicals) and markets to sell their farm products at a reasonable time and price.
As a positive outcome of the establishment of the union, significant strides have been made in serving its members:
- In 2022 – 2023, MUTCOJE LTD successfully applied for a bank loan from CRDB Bank for purchase farm inputs (fertilizer). As a result, in March 2023, the CRDB Bank approved a Bank Guarantee of TZS 643,160,000 in favour of the fertiliser supplier to sell to MUTCOJE LTD 9188 bags of YARA Mila Java (NPK) for distribution among its farmer members.
- All outstanding payments to tea growers from the Tea Processing company were paid.
- All payments to tea farmers should be paid based on an agreement with buyers (within 14 days after the collection of green tea leaves in the tea collection centres.
- The green tea leaf price increases per kg from 314 TZS to 366 TZS (marking the first increase in over 5 years)
- In 2023-24 MUTCOJE LTD applied for a bank loan from NMB Bank, amounting to TZS 400,000,000 for the purchase and supply of 5000 bags of fertilizers.