How a coffee farmer sponsors govt. projects

Ethiopia, a poor East African country with record of abject
poverty, is now one of the fastest growing economies in that
region. This achievement followed an effective value chain
developed by the country's coffee farmers under the aegis of
Oromia Coffee Farmers Cooperative Union (OCFCU) that
does not only improved the earnings of the Ethiopian
farmers but also empowered the OCFCU to sponsor some
government projects.
Delivering a paper at the recently concluded conference on
Finance for Revolutionising agricultural value chain in
Nairobi, Kenya, co-sponsored by the African Rural and
Agricultural Credit Association (AFRACA) and the Technical
Center for Agricultural and Rural Cooperative (CTA), Mr.
Dessalegn Jena of OCFCU said his union provides social
services as part of its contribution to the government and
people of Ethiopia.
He said the union has built 81 schools and related facilities
and transferred to the government, constructed 20 clinics,
provided 89 sources of potable water, 50 kilometres of all
weather roads, built 7 bridges, four coffee processing mills,
46 warehouses, five flour mills and one coffee museum from
the country's coffee farmers' profit.
Jena, who said coffee farming is the most viable agricultural
activity in the country, revealed that agriculture accounted
for 46.3 percent of the nation's GDP, 83.9 percent of export
and employs 80 percent of labour.
He said small scale producers contribute over 90 percent of
agricultural products.
He said before the establishment of the Oromia Coffee
Farmers Cooperative Union, farmers in the country were
producing at a loss without an effective value chain, adding:
"We came together and formed the union with a view to
proving market information to the various farmers
cooperative societies in the country.
"The union is also helping farmers to sell their coffee
products at better price at local and international markets,
it also improves and maintain the quality, productivity and
sustainability of coffee production and provide coffee
farmers with social services. We have value chain
supporting facilities for our farmers that consist of 127 wet
mills, 26 dry coffee hullers and two coffee processing and
grading machines among others."
He said part of the problems Ethiopian farmers faced in the
past was the difficulty in accessing agricultural loans from
banks as most commercial banks in the country demanded
for huge collaterals before granting them loans with high
interest rates.
He added: "To address that problem, we established the
Cooperative Bank of Oromia designed to provide full fledged
commercial bank service, solve the financial challenges of
cooperatives, reach the rural communities where other
banks do not reach and expand saving habits in the rural
communities.
"At the moment, the Cooperative Bank of Oromia has Birr
7.3 billion as its asset, Birr 901.34 million capitals and its
loan portfolio Birr 3.2 billion. In 2012 alone, the bank
granted $12.3 million US dollars loan to farmers. In 2013,
the loan the bank granted to farmers hit $15 million US
dollars.
"Because farmers and farming activities everywhere require
insurance service, the Oromia coffee farmers union also
established our own Oromia Insurance Company (OIC) with
a share capital of $7.7 million US dollars and $2.4 million
US dollars initial paid-up. Cooperatives and farmers in
Oromia regional state alone own subscribed share capital of
$1.3 million US dollars in the insurance company."
Jena said the essence of establishing the insurance
company is to provide insurance services, index based
livestock insurance, farm insurance and address the need of
farmers in the country.