A friend of mine teaching political economy at University of Leeds recently published a book that offers some useful insights on the politics of coffee growing and trading in Uganda.
Jörg Wiegratz's 2013 book, Neoliberal Moral Economy: Capitalism, Socio-Cultural Change and Fraud in Uganda attempts to explain, and theorize the scaring levels of fraud under Museveni's Uganda - through the lens of coffee trade.
With extensive fieldwork among coffee farmers and traders in Bugisu, the book investigates and documents the horror of government intervention/regulation, which continues to fight to create monopoly traders, at the expense of locals. Now that the country is discussing coffee, below is an excerpt on the fight for control of Bugisu Cooperative Union and, by extension, coffee trade in Bugisu. [pp. 301-303]
People characterized the state's response to the BCU's revival movement [in the 2000s] as hesitant, slow or hostile. The state's use of financial resources, political intrigue and pressure to influence the election of the chairman was assessed as constituting an unprecedented level of political influence peddling in cooperative affairs.
Yet, the NRM-backed candidate lost the heated election in 2008 which reportedly was followed anxiously outside the election tent by thousands of farmers who were ready to protest if the result had turned out to be different. Reportedly, a couple of people with voting rights who had received some sort of financial gift from the NRM allegedly returned the money and voted for [Nathan Nandala] Mafabi; these were the decisive votes in the struggle between, as a key supporter put it, 'developmentalists and opportunists'.
After the election, Mafabi's position was reportedly attacked repeatedly by the old management and some of the central government officials on legal grounds, but he was able to win the support of many NRM-leaning actors and regained farmers' trust, many of whom started to supply coffee on credit by the next harvest season following his election...
Donors showed little interest to engage with BCU; one interviewee argued that this could be due to their fear of the government and its perceived stand against the BCU, though talks with a couple of donor representatives suggest that they were for ideological and political-economic reasons in favour of the status quo: capitalist firms linking up with individual farmers/farmer groups.
A high-level EU official made dismissive remarks about the statement and efforts of the then Finance Minister [Ezra] Suruma, and parts of the state more generally, to return to more collective modes of production and trade, aka cooperatives, is an old approach, back to the twentieth century.
In its first seasons under the new leadership, the BCU had done well. Many farmers were hopeful and delivered good-quality coffee, at first on credit. The BCU collected rents from the buildings it owned in Mbale, which were also used to pay for the supplied coffee, and tried to retrieve its export license (which was lost in the crisis years), find foreign coffee buyers and revive the old systems of farmers' support (extension services, second-payment, bonus systems).
Export relations to China and Japan were established, and a school bursary scheme for members' children were revived. BCU reportedly made annual net profits by 2011 of about Shs 2.5b (Daily Monitor, 2011). There was a significant coffee price increase in the region; the BCU revival arguably contributed to this price surge.
The organization was apparently able and willing to pass on to members large parts of increased coffee prices in international markets (2005-2010, high coffee demand and low harvests), for which it was praised publicly. One commentator observed that 'the farmer, who in the pre-Mafabi era earned about UGX 800 for his kilo of coffee, now gets UGX 6,200.
This price badly beats the one paid by private buyers who generously offered about UGX 2,500 before the dawn of the "Mafabi magic"' (Sengoba 2011). BCU signalled to farmers that it is not exclusively the remote 'world market' that shapes local price dynamics; collective price politics of farmers can pressurise dominant buyers in the region (such as K) to increase their prices. A decisive state intervention in BCU's revival process endangered the organisation's recovery.
In December 2010, just before the February 2011 presidential elections, the state suspended the new Mafabi-led management on the basis of mismanagement allegations (balance sheet falsification), which were brought forward by parts of the old BCU leadership.
The BCU board legally challenged the suspension, but despite the court's declaration that the enquiry and the suspension were unlawful - which was celebrated by farmers and elders and seen by them as 'the first step towards liberating the union from government interference', as the newspaper put it (DM, 2011), the government installed a caretaker and a legal battle of several years ensued.
There were protests in Mbale against this latest state move. It was seen as suspicious for the government to act upon a petition from the old BCU directors (SM 2011a).
The government caretaker, however, occupied the union's offices and interfered with and later effectively halted much of its operations (his actions including on appointment and other matters were challenged by the suspended BCU management). Despite the court ruling, the caretaker 'vowed never to vacate office, adding that he has an appointment from the highest authority.
"I cannot succumb to intimidation by your lawyers because none of you knows how and why I was appointed to this office. I will only listen to the appointing authority"' (SM 2011a).
The author is a PhD fellow at Makerere Institute of Social Research.