It is common for households to manage coffee farming enterprises successfully and become prosperous. However, it is also quite often that these kind of families lose the wealth they have built and go bankrupt due to death or aging of the family heads who run the businesses.
Joseph Nkandu, the executive director, National Union of Coffee Agribusiness and Farmers Enterprises (Nucafe), believes that teaching Ugandans to build and sustain family-based coffee enterprises is crucial for creating sustainable wealth and jobs.
“Research done by many scholars indicates that 75 per cent of the world’s businesses are family owned,” he says. “Research has also indicated that even the multinational companies we see today have their roots from family businesses.”
He wants to see a situation where families that set out to become coffee farmers pass the businesses to their children eventually so that ownership continues from one generation to another.
“When families own a coffee farm for generations, they accumulate a wealth of experience in terms of skills,” Nkandu explains.
“They build a name for themselves which they guard jealously. Their product becomes a brand whose origin can be easily traced. It helps to improve quality and quantity of the coffee produced.”
But continuity of family farming businesses from generation to another is hampered by parents not creating a passion for farming in their children.
“Most parents don’t disclose how much the coffee growing business brings in, and so the children don’t take it seriously. Another weakness is that most farmers don’t keep books and there is general lack of transparency,” he adds.
If the family invests in value addition, more employment opportunities are created for household members.
Parents must be helped to realise the importance of being open about what is earned from the business and to keep their offspring attracted to coffee farming.
However, many coffee growing areas are densely populated which affects agriculture. The traditional succession practice is that when the family head dies, the children share the land, which results in smaller plots of land allocated to each child.
If a man had four acres on which he grew coffee, his nine children would have to share the land equally.
Power of groups
On such a scenario, Nkandu observes: “Dividing and sharing the land would not be advisable. Rather, they should keep the farm intact and manage it as a family. With proper books of accounts, it should be possible to know the income and this can be shared by the family members.”
Nucafe encourages smallholder farmers to join farmer organisations while remaining individually as family farming businesses. Coffee can be so well paying when the farmers get into value addition and join to work in groups.
This, against the backdrop, that scarcity of jobs in Sub-Saharan Africa is envisaged to be the main challenge in the first half of the 21st century.
According to Nkandu, this challenge needs to be addressed starting with the basics, which policies and education systems in many Sub-Saharan Africa countries have not embraced.
Therefore developing and establishing an entrepreneurial culture and a policy environment for family businesses, should be strengthened with succession planning in any sector of the economy. This is the foundation to creating wealth and jobs that are needed by current and future generations.