Aid in Action

Burundian Farmers Receive First-Ever “Quality Premium” for Specialty Coffee

 | Monday, March 23, 2009

The first-ever quality premium for specialty coffee was paid to Burundian coffee farmers at Bwayi Washing Station in Kayanza Province in February. These payments were a direct result of 2008 changes made to coffee marketing legislation supported by USAID, the World Bank and the International Monetary Fund (IMF). The legislation allows for direct sales contracts between Burundian producers and international coffee buyers, roasters or importers and permits the payment of a quality premium to those responsible for producing specialty coffee (including producers, washing station management teams and dry millers).

USAID Burundi’s Agribusiness Project (BAP) was initiated in October 2007 and is implemented by Development Alternatives, Inc.  The project’s initial focus has been on the coffee value chain and support for privatization of the coffee sector, including refinement of Burundian specialty coffee.  Four coffee washing stations -- Bwayi, Ngogomo, Teka and Murambi -- were initially selected to pilot high quality coffee production and farmer-buyer direct business relations (eight more stations have since been added). 

In 2008, farmers brought 808,464 kilograms of coffee cherries to Bwayi coffee washing station that was subsequently transformed into 120 metric tones of green coffee. 

Following a 2008 BAP-organized coffee buyer’s visit to Burundi, two specialty coffee sales contracts with provision for quality premium payments were signed with two of the four pilot coffee washing stations. Both contracts specified the unit price and the extra amount provided for quality premium pay. The contracts also specified the percentage of the total quality premium pay that would be given to each of the entities playing a role in the coffee production. Farmers from the Bwayi coffee washing station ended up selling fully 53 metric tons (of the original 120 tons) through direct sales contracts. 

As a result, approximately $17,605 in premium payment was provided to the 3,272 participating Burundian farmers. Farmers divided the premium among all farmers who sold their cherries at Bwayi coffee station, based on each farmer’s coffee volume.

An event was held to mark the historic premium payment transaction. Turnout was impressive, and included farmers, the president of the Coffee Farmers Federation and management officials from coffee washing stations in the area. The farmers appreciated the honor associated with a premium payment, and the local Radio station, Isanganiro, recognized the hard work invested to produce fine coffee in its French and Iocal language broadcasts.  (Note: The second pilot washing station has yet to hold a special premium pay event.) 

Farmers left with added motivation and a firm commitment to redouble efforts to improve the productivity of their plantations and the quality of their coffee, and anticipate attracting more buyers in 2009 and increasing the volume of coffee sold through direct sales.