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12. VCA4D Southern Highlands of Tanzania.Coffee

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12. VCA4D Southern Highlands of Tanzania.Coffee 1 Value Chain Analysis for Development (VCA4D) is a tool funded by the European Commission / DEVCO and is implemented in partnership with Agrinatura. Agrinatura (http://agrinatura-eu.eu) is the European Alliance of Universities and Research Centers involved in agricultural research and capacity building for development. The information and knowledge produced through the value chain studies are intended to support the Delegations of the European Union and their partners in improving policy dialogue, investing in value chains and better understanding the changes linked to their actions VCA4D uses a systematic methodological framework for analysing value chains in agriculture, livestock, fishery, aquaculture and agroforestry. More information including reports and communication material can be found at: https://europa.eu/capacity4dev/value-chain-analysis- for-development-vca4d- Team Composition Economist: Ruerd Ruben Social expert: Catherine Allen Environmental expert: Fayçal Boureima National expert: David Gongwe Mhando Assisted by Youri Dijkxhoorn The report was produced through the financial support of the European Union. Its content is the sole responsibility of its authors and does not necessarily reflect the views of the European Union. The report has been realised within a project financed by the European Union (VCA4D CTR 2016/375-804). Citation of this report: Ruben, R., Allen, C., Boureima, F., Mhando, D., Dijkxhoorn, Y. 2018. Southern Highlands coffee value chain analysis in Tanzania. Report for the European Commission, DG-DEVCO. Value Chain Analysis for Development Project (VCA4D CTR 2016/375- 804), 124p + annexes. 2 Table of Contents TABLE OF CONTENTS ...................................................................................................................... 3 ACKNOWLEDGMENTS .................................................................................................................... 8 ACRONYMS .................................................................................................................................... 9 EXECUTIVE SUMMARY .................................................................................................................. 10 1 FUNCTIONAL ANALYSIS OF THE COFFEE VALUE CHAIN IN TANZANIA ..................................... 12 1.1 BACKGROUND .................................................................................................................................. 12 1.2 PRODUCTION ................................................................................................................................... 12 1.1.1 Coffee production at the household level ..................................................................................... 15 1.2.1 Organic coffee ........................................................................................................................... 15 1.2.2 Impact of climate change ........................................................................................................... 18 1.3 COFFEE HARVESTING AND PROCESSING ................................................................................................ 19 1.3 AUCTION ......................................................................................................................................... 21 1.4 EXPORTS ......................................................................................................................................... 23 1.5 MARKET OUTLETS ............................................................................................................................ 24 1.6 CERTIFICATION ................................................................................................................................. 25 1.7 PRICES ............................................................................................................................................ 26 1.8 STRUCTURE AND GOVERNANCE OF THE TANZANIAN COFFEE SECTOR......................................................... 26 1.8.1 Institutions and governance of the coffee sector in Tanzania ....................................................... 27 1.8.2 Input provision Node .................................................................................................................. 28 1.8.3 Production node ......................................................................................................................... 29 1.8.4 Processing node ......................................................................................................................... 30 1.8.5 Curing and warehouse node ....................................................................................................... 30 1.8.6 Marketing and exporting node .................................................................................................... 30 1.9 STAKEHOLDER ANALYSIS OF THE COFFEE INDUSTRY IN TANZANIA ............................................................. 30 1.9.1 Policy, regulation and licensing ................................................................................................... 31 1.9.2 Research .................................................................................................................................... 33 1.9.3 Seedling production and distribution ........................................................................................... 33 1.9.4 Training of farmers ..................................................................................................................... 33 1.9.5 Infrastructure ............................................................................................................................. 34 1.9.6 Production ................................................................................................................................. 34 1.9.7 Financing ................................................................................................................................... 36 1.9.8 Processing (primary and secondary) ............................................................................................ 36 1.9.9 Marketing .................................................................................................................................. 37 1.9.10 Taxation (Government and /district councils) .......................................................................... 38 1.9.11 The contribution of coffee to public revenues ........................................................................... 41 1.9.12 Transport .............................................................................................................................. 41 1.9.13 Auction .................................................................................................................................. 41 1.9.14 Export ................................................................................................................................... 42 1.10 KEY DRIVERS .................................................................................................................................... 43 2 FIELD STUDY: SCOPE, APPROACH AND METHODS ................................................................. 45 2.1 REGIONAL IMPORTANCE OF THE COFFEE SECTOR .................................................................................... 46 2.2 REGIONAL FARM STRUCTURE .............................................................................................................. 48 2.3 REGIONAL CROPPING CALENDAR ......................................................................................................... 50 2.4 SCOPE OF THE ECONOMIC ANALYSIS .................................................................................................... 52 2.5 SCOPE OF THE ENVIRONMENTAL ANALYSIS ........................................................................................... 53 2.6 SCOPE OF THE SOCIAL ANALYSIS ......................................................................................................... 54 2.7 FIELD VISITS ..................................................................................................................................... 55 3 ECONOMIC ANALYSIS ............................................................................................................ 57 3.1 FINANCIAL ANALYSIS ......................................................................................................................... 57 3.2 ASSUMPTIONS USED IN THE MODEL ..................................................................................................... 61 3.3 ECONOMIC ANALYSIS AT VALUE CHAIN LEVEL ........................................................................................ 62 3.4 ADDED VALUE GENERATED IN THE COFFEE VALUE CHAIN ........................................................................ 64 3 3.5 MACRO-ECONOMIC RATIOS ................................................................................................................ 66 3.6 CONCLUSIONS OF THE ECONOMIC ANALYSIS ......................................................................................... 67 4 ENVIRONMENTAL ANALYSIS ................................................................................................. 68 4.1 GOAL AND SCOPE DEFINITION ............................................................................................................. 68 4.1.1 Description of studied system ....................................................................................................
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