Neumann Kaffee Gruppe (NKG), understanding the need for economic viability for all participants in the green coffee supply chain, announced a new, expanded version of NKG BLOOM. While NKG BLOOM initially referred to a smaller, Uganda-focused effort, the name is being applied to a far larger and more advanced initiative furthered by a unique impact banking–backed facility and a goal of reaching 300,000 coffee families by 2030.
Redeveloped as a long-term sustainable-sourcing initiative designed to address poverty in coffee communities, financially empower coffee farmers and ensure a healthy future for coffee, NKG BLOOM will be introduced in at least 10 countries by 2030 and will continue to grow in Uganda.
"NKG BLOOM is not a marketing strategy, it is not a philanthropic endeavor or a feel-good project. It’s about the way we want to do business in the long term. It will cost us money and effort, but it is simply the right thing to do,” says David M. Neumann, Neumann Gruppe’s Group CEO. "Lending to smallholder farmers in some of the poorest places in the world is a risky proposition, but it´s critical to unlocking the potential that these farmers hold for global agriculture and development in their own countries and communities."
Coffee is by far the largest export product of Uganda, accounting for 20% of export revenues. With approx. 1.3 million households, Uganda has the largest number of coffee farming families in the world.
Despite favorable agro-climatic conditions for its production and a constant global increase in demand for the product, those smallholder coffee farmers still operate at a very low productivity. The reasons for this are varied, such as a lack of
reliable access to agronomic skills, inputs, finance and markets. The farmers as well as Ugandan exporter Ibero are falling far short of their possible potential.
Therefore, NKG BLOOM Uganda was initiated by importer Bernhard Rothfos and Ugandan exporter Ibero, both members of Hamburg based Neumann Kaffee Gruppe. They established a network of partner companies in order to create NKG BLOOM Uganda, a sustainable sourcing strategy.
At the heart of NKG BLOOM Uganda is the set up of a fully fledged Farmer Service Unit within the Ibero operation. This unit provides fertilizer and cash advances to farmers, as part of a 2-year crop-nutrition program that should increase farm-level productivity by at least 75% after 2 years. Moreover, Ibero is setting up, through a complex and innovative set of partnerships, an ecosystem of support to farmers that includes agronomy and financial literacy trainings. For Ibero, this is a business opportunity and not just a CSR initiative. The idea is to be able to grow its sourcing capacity and ultimately its business competitiveness hand in hand with the growth of farmers.
Several years before NKG BLOOM Uganda was initiated, the non-profit foundation Hanns R. Neumann Stiftung (HRNS) has started its work in Uganda in
order to build the Coffee Farmer Alliance (UCFA) -
laying the foundation for NKG BLOOM Uganda:
In Uganda, smallholder coffee farmers from several coffee regions are organized in 82 Depot Committees (DC's), which are registered companies with up to 800 farmers and so-called Producer Organizations, a group of up to 30 farmers. All DC's are organized by the Coffee Farmer Alliance (UCFA).
In January 2017, NKG BLOOM Uganda has started and has already disbursed fertilizers to 493 farmers at 7 Depot Committees.
Today, the average Ugandan farmer produces only 550 kg of green coffee per ha, in one main crop and one fly crop, while its counterpart in Vietnam yields on average 2.500 kg per ha. But Demo-plots of HRNS in Uganda prove, that the average yield of the Ugandan farmer could increase up to 1.625 per ha within only two years. What the Ugandan farmer needs is basically fertilizer and cash (besides agronomic training).
A 2 year crop nutrition program cycle is the starting point for Ibero Uganda and all partners to improve the smallholder coffee farmers' livelihoods and to establish the sustainable sourcing strategy in Uganda. Every farmer has to meet specific eligibility criteria and to complete an application process before he is getting two guaranteed fertilizer and cash (mobile money) disbursements. After every two disbursements, the farmer has to fully repay the disbursements by bringing coffee to exporter Ibero Uganda. The farmer cannot reapply for the next two disbursements before the repayment is fully done.
From October 2018, Ibero Uganda decided to offer its services to farmers not organized in farmers’ groups. We developed what we call the ‘Village Coffee Organizations’ (VCOs). We go to districts where coffee farmers never received good agricultural trainings nor finance, and we train them. We organize Farmers Field Schools (FFS) and we build capacities with lead farmers that are chosen among their pairs. We explain the benefits of selling their coffee ... more
During the latest disbursement day, we doubled the number of farmers that have being distributed fertilizer between March and August 2018. In 2018 overall, we distributed 540 tons of fertilizer to over 2500 coffee smallholders. Compared to the overall fertilizer Ugandan consumption (estimated at around 55,000 tons per year in 2016) NKG BLOOM Uganda is contributing 1% of the Ugandan fertilizer consumption ... more
In 2014, 39 year-old Mukabera Rose decided to take charge of her life again and left her abusive husband. She started making a living through her 2 acres of planted coffee, pigs and chickens. In August 2017, she took 120 USD in mobile money advance, which she used to pay for school fees and buy cow dung to fertilize her orange trees. For the first time in her life she did not have to go to the local coyote to access cash for this critical need ... more
Genza Simon is 27 years old and supports a family of 7 persons. He owns 500 coffee trees on an area of 1.5 acres and had never used fertilizer before he started participating in NKG BLOOM Uganda nine months ago. After his successful application he received a fertilizer advance of 100 g per tree in March and 100 g per tree in August. Now it is main coffee harvest season and he estimates that his coffee production per tree has tripled from 2 kg to 6 kg. That is a 200% increase in less than a year - we are impressed!
Do you want to know more about the latest progress at NKG BLOOM Uganda?
NKG BLOOM Uganda can only be successful with the help of the following partners and suppliers:
"Combining private investments with GIZ experiences in financial product refinement and farmer training, this project is an innovative attempt to bridge existing gaps in the access to financial services for smallholders.”
"NKG BLOOM Uganda is not just another CSR project to include in a company´s annual report. It´s about transforming the heart of the coffee sourcing business in a manner that holds the potential to lift thousands of smallholder farmers out of poverty."
"The most satisfying feeling is to see the look of gratitude in the eyes of a farmer in whose life you have made a positive impact. That is what is happening with NKG BLOOM Uganda. The first batch of farmers have started seeing good results on their gardens and over 92% of them have already paid off all or half of their advances and have come for the second batch."
"NKG BLOOM Uganda is providing smallholder farmers a key service that most financial institutions have to date not been able to offer effectively. Access to financial services is critical for farmers to invest in production and to break out of the vicious cycle of dependency towards middlemen."
Learn more about how our project partners and suppliers support NKG BLOOM Uganda: