Coffee farmers and co-operatives in Tanzania will, starting this month, sell their produce only through the annual coffee auctions to benefit from the growing global coffee market and to stop the rampant coffee smuggling to neighbouring countries by individual growers.
The annual auction is scheduled to take place in Moshi this month under the supervision of the Tanzania Coffee Board, the official auctioneer and growers are required to sell their produce only through farmers co-operatives. The selling of coffee directly from farms has been banned.
The announcement was made by the Agriculture Minister Charles Tizeba when he met Uganda's Minister of State for Co-operative Unions Frederick Ngobi Gume this week in Kagera. They resolved to monitor cross-border trade and smash the coffee smuggling rings.
Mr Tizeba said that the annual coffee auctions are properly planned to ensure that farmers are paid at market price for their crop.
Middlemen in Tanzania have been blamed for the low prices and late payments, forcing farmers to seek alternative markets. Apart from Uganda, farmers in the Kilimanjaro and Arusha regions are said to smuggle their coffee to Kenya.
Tanzania is the fourth coffee-producing country in Africa -- after Ethiopia, Cote d'Ivoire and Uganda -- with an annual crop ranging from 46,000 tonnes to 60,000 tonnes.
The Kagera Region alone produces about 12,131 tonnes of coffee annually, a third of which is reported to be illegally sold in Uganda due to unpredictable prices in Tanzania.
On average, Tanzanian coffee fetches Ush2,000 ($0.5) per kilo, against Tsh1,460 ($0.6) on the local market.
However, production has dropped in the past 10 years and Mr Tizeba said that the government has plans to to revive the sector by encouraging use of inputs, introduction of pests and disease resistant varieties and setting up small and medium-scale processing plants -- and better marketing.
Coffee was once once a leading foreign currency earner for Tanzania, and currently accounts for about five per cent of total exports by value, generating $100 million (Tsh220 billion) annually.