The Tanzanian government has ordered coffee farmers to stop selling their produce to middlemen and traders who roam villages, saying all coffee should now be sold through auctions.
The order immediately revoked thousands of coffee buying permits held by traders who have been operating in the 16 coffee producing regions of the country.
Addressing a recent meeting of coffee farmers in the city of Dodoma, Prime Minister Kassim Majaliwa said starting this month all coffee will be sold through government supervised auctions.
“Coffee will be sold through auctions only. No licences should be provided to traders to buy coffee in the villages. If there are companies that have people in the villages with cash for that purpose, they should recall them as soon as possible,” Majaliwa said.
He also ordered regional and district commissioners to ensure that the law is enforced so that farmers can benefit from the sale of their produce. The middlemen were ripping off the farmers by buying the coffee at very low prices and reselling at higher profit margins in the urban and export markets, he added.
The PM said such activities were killing the profitability of the sector, leading to depressed production as farmers abandon coffee and try other cash crops to cut losses, according to Majaliwa.
Meanwhile, he has dissolved the Tanzania Coffee Development Trust Fund and ordered the Controller and Auditor General (CAG) to investigate its activities.
The dissolution followed an outcry that it was not serving its intended purpose of driving the development of coffee farming and its value chain. It was funded through deductions from farmers. However, Majaliwa said instead, the trust had become a financial burden and could have been set up illegally.
“While government is striving to reduce unnecessary pressure through deductions from farmers, there is a body that is swindling the income of the farmers. This is not acceptable,” he said.
The Trust’s offices have since been closed to pave way for an audit of its funds.