Coffee tree nurseries are now a business in DRC

In the eastern part of the Democratic Republic of Congo new business opportunities arise for coffee nursery growers. The New York Stock Exchange shows a growing trend for Arabica coffee, and large buyers show renewed interest for Congolese Arabica. Yet the plantations are old and the production needs to be increased. After working with farmer organisations for the production of coffee seedlings, VECO changed its paradigm and now co-invests in the businesses of private nursery growers.

Wednesday 1st of February 2017 in Beni city. VECO RDCongo holds its side event during the week for promotion of agribusiness that is taking place here, organised by the Christian Bilingual University of Congo (UCBC).

“The current situation is favourable”, says Ivan Godfroid, regional director of VECO RDCongo. “The growing trend for Arabica coffee on Wall Street offers better prices and brings farmers back to coffee growing. With its coffee programme, VECO demonstrates that Congolese Arabica is a speciality coffee of superb quality that can reach far better prices than what is currently the case in the New York Stock Exchange. The commercial approach leads to growing income for the members of the coffee cooperatives – doubling or tripling, depending on the upscaling level.”

The international context looks promising, but locally the situation is almost alarming: coffee trees have grown old, as did the farmers. “On average, farmers are between 55 and 60 years of age, and coffee trees are between 35 and 50 years old. Because there are no regeneration cuts or general land management operations, productivity is low”, Godfroid confirms. This raises concerns for the future of the coffee industry. The offer of Arabica coffee could be much lower than the demand, which is steadily growing by 2 to 3% yearly. The attractive potential of the global market generates enthusiasm for an increase in production. “We must therefore support the planting of young coffee trees by making quality seedlings available.”

The challenge was finding how to produce 3 million quality seedlings. The first approach involved producing seedlings in close collaboration with farmers’ organisations. “A participatory process was launched to identify the farmers' preferred varieties (4 were identified: Rumangabo, Riuru 11, Blue Mountain and Clone). All costs incurred to produce the seedlings were covered by the VECO project. One seedling costs 47 Congolese franks to the project (in 2014). The income generated by selling the seedlings would strengthen the organisations' financial autonomy. That was the idea”, says the regional director of VECO RDCongo.

Achievements: 47 nursery gardens of the farmers’ organisations were supported and 2 million seedlings were produced. “Yet, few seedlings were actually sold! Why was that? The provincial government thought the best way to revive the industry was to have a free distribution of the seedlings. Secondly, some companies give out the seedlings for free to bind the farmers and prevent them from engaging with other companies. Sometimes farmers also adopt a wait-and-see policy. There is also distrust amongst the farmers: some think that if they buy seedlings from a farmers’ organisation maybe they will be bound to that organisation with potentially a hidden agenda”, Ivan claims.

A series of conclusions can be drawn from the nursery-project. “First, the poor sale of seedlings. In that sense, the offer did not create its demand. Then, the poor sustainability of the project approach: the farmers’ organizations involved were happy just to survive. A real commercial drive was lacking. At the same time, however, we saw that private nursery owners (who had no part in the project) were able to sell their seedlings”, Godfroid adds.

Hence the new model established in 2016. “We saw that coffee growers do have the capacity to buy new seedlings. It is really not necessary to hand them out for free or at a very cheap price. Therefore we changed our approach: we now support commercial nurseries by co-investing with micro-entrepreneurs. We are striving to standardize the approaches of production and selling of coffee tree seedlings between stakeholders, to prevent conflicting approaches. A coffee tree can generate at least $130 for 30 years of production. Investment is necessary”, says Ivan Godfroid.

“The starting point is the real demand for seedlings identified by each nursery owner in terms of orders. We co-invested with nursery owners. We selected the best nursery owners and enhanced their capacities in collaboration with a third-party institution: Graben Catholic University (UGC), from Butembo. The nursery owners were trained to control production costs and were trained in terms of marketing concepts.”

These are the steps that can be highlighted: first we identified and selected the 26 best nursery owners during the test phase (effective demand for seedlings, experience and dedication), then the 26 nursery owners were trained by UCG professors (technical and managerial aspects). After that, we assessed the nursery owners' reports and established the needs in terms of extra support and assistance by VECO and UCG.

The participants were trained on several aspects of agronomy regarding the running of a nursery: multiplication of the coffee tree (generative multiplication, i.e. from a seed, and vegetative multiplication, i.e. from a cutting), quantitative selection (treatment) of coffee seeds and other crops, general running of a nursery (from germination to delivery of the seedlings to clients). The nursery owners were also empowered on economic aspects regarding the management of a nursery, including keeping records such as inventory, spending, stocks, sales and other activities.

As of September 30, 2016, the demand for seedlings amounted to 515,955, of which 91,299 were for Beni territory and the rest for Lubero territory. Figures are on the rise: by 31st December 2016 cumulated demand had risen to 672,123 seedlings. Nursery owners keep recording demands for seedlings.

“The commercial approach involves always starting from demand. Changing mentalities and learning from past mistakes takes time. Co-investment is necessary for a manifest ownership. Production is progressive, yet depends on the cultivation areas. The challenge of a likely competition with distributors of free seedlings remains. There is a real need for nursery owners to organise themselves and set up a system of local guarantee/solidarity”, argues Ivan.

“Activities designed on a commercial basis are more sustainable, we think. At this moment we are verifying our hypotheses.”