Grantee:                   Mshikamano Farmers Group
Country:                   Tanzania
Project Title:           Mshikamano Integrated Coffee 
                                    Market Development               
Project Amount:    US $228,500
Duration:                  FY 2004-2008  
 

The Mshikamano Farmers Group (MFG) is an association of small-scale coffee farmers in the Mbozi District, a mountainous region of southwestern Tanzania near the border of Zambia. MFG was created in 1995 by 48 family farmers with the goal of consolidating their production and selling their harvest in volume to domestic and international markets. The establishment of MFG has allowed its members to move away from prior dependence on lower-price “farm-gate” sales to higher-price sales to regional coffee auctions and international buyers. 
 
In the United States, MFG green beans have been roasted, blended, packed and marketed through contracts with various American supermarkets and coffee roasting companies. In 1999, MFG established a partnership with Up-Country International Products, an American company that sells Mshikamano coffee under the Sweet Unity Farms brand. MFG currently sells about 30 percent of its production to American buyers, and its sales to American companies earn an average of $1 more per kilogram compared to prices it receives at Tanzanian coffee auctions. The coffee is roasted by an American business partner in New York City and sold in standard 12-ounce units as whole-bean and ground coffee.
 
MFG has grown rapidly over the past decade in membership and production. The group now includes 300 farming families from five local villages. MFG’s combined coffee production has risen to nearly 200 tons per year, and the group generated sales of 272 million Tanzanian shillings (US $245,000) in 2003.  Rising global coffee prices are expected to increase the group’s earnings in the near term.
 
MFG provides its members with a wide range of services, including:

• Support for the collection, transportation, and raw processing of members’ coffee harvests;
• Negotiation of processing fees and bulk sales with local curing plants and international purchasers;
• Bulk purchase and distribution of essential coffee inputs to members (fertilizer, farm implements, and other tools); and
• Direct marketing to potential American and international coffee roasting companies.

ADF is providing MFG with investment capital in the amount of US $210,000 to help it finance a revolving loan fund for its members that will provide farmers with the capacity to purchase new inputs and further expand their production. ADF funds will also provide MFG with marketing funds to establish direct contact with potential American buyers.
 
Foundation monies will finance the purchase of pulping and fermentation machines that are used in removing the fruit casing that surrounds freshly picked coffee beans and for curing beans in preparation for roasting. The acquisition of on-site processing equipment will help MFG speed up the market delivery of its harvest and allow the group to take advantage of higher early season prices. The value-added processing equipment will help MFG earn a significantly larger share of the profit that is generated by the global exchange of coffee for cash.
 
In addition, ADF is providing MFG with a special marketing grant of US $18,500 that will allow three of its members to attend the Smithsonian Institution’s 39th Annual Folklife Festival as featured participants in the festival’s new Food Culture USA program. Food Culture USA will highlight 40 years of change in the American diet, and MFG will be one of three small producer groups from the developing world that will receive recognition for their successful efforts to market to American consumers.
 
The Folklife Festival, which will be held on the National Mall in Washington, DC between June 23 and July 4, 2005, attracts an average of 1.1 million visitors every year. MFG will use the event as an opportunity to make direct unit sales of coffee to festival visitors and generate new partnerships with major American coffee roasters.  
 
For more information on the 2005 Smithsonian Folklife Festival, click here.
 
Overall, it is expected that ADF’s support for MFG will allow the group to:

• Expand its membership from 300 to 500;
• Increase total coffee sales from 272 million Tanzanian shillings (US $245,000) to more than one billion Tanzanian shillings (US $910,000); and
• Increase average members’ earnings from 220,000 Tanzanian shillings (US $200) to 728,000 Tanzanian shillings (US $655).