Our last visit was to Isimani (August 1)

The Isimani SACCOS was started in 2013 with 66 members. They now have 57 active members.  The membership consists of 35 women and 22 men.  17 officers and board members of the SACCOS and AMCOS were present. 

A total of TZS 49,200,000 (or about $21,800) was loaned last year.  Of this, 21,400,000 TZS was from Internal SACCOS funds and TZS 27,800,000 was from loans from the Iringa Hope Joint SACCOS.  A total of 33 loans were made.  The average loan was for TZS 1,490,000 (or about $660 per loan).  The loan repayments have already started and TZS 1,020,000 has been repaid to the Iringa Hope Joint SACCOS. 

The AMCOS was registered in 2018 and is a member of the Joint AMCOS.  There are 30 members of the AMCOS.  Of the 30 members, there are 13 men and 17 women. 

The AMCOS operates a five-acre farm.  The farm has three acres of maize and two acres of sunflowers.  An insufficient amount of fertilizer was used and only ten bags of maize were harvested from the three acres of maize. 

Venance Msigala gave a presentation on how the AMCOS and the SACCOS would work together.  Again there were many questions.  One of the AMCOS members asked about whether the SACCOS and AMCOS work separately?  Are they separate organizations, or do they work together?  Ascriti Msemwa, the Chairwoman of the SACCOS directed her answer to the member.  It was clear that she understands the organization very well.  It appeared that some of the misunderstanding is as a result of their AMCOS making loans of fertilizer, separate from the SACCOS. 

Sisto Uhagile, the Chairperson of the AMCOS said that the AMCOS members are new, so they are looking for direction.  They lack funds at this time.

Rinusi Ngoro, the Chair of the SACCOS loan committee, said that there had been problems with AMCOS members taking out loans for fertilizer from the AMCOS and not paying the money back.  He felt very strongly that all AMCOS members should also be members of the SACCOS, and take their loans from the AMCOS.

Consolata Mng`Ong`O, the Secretary of the SACCOS agreed that all AMCOS members must become members of the SACCOS.  Sisto Uhagile, the Chairman of the AMCOS stated that the AMCOS is new, and that the registration process should be stopped until all AMCOS members become members of the SACCOS.

There was another question about why members needed to pay for shares and fees in both the SACCOS and the AMCOS.  We responded that those are rules of the Tanzania Cooperatives Development Commission and not rules made up by our SACCOS and AMCOS.  Sisto Uhagile, the Chairman of the AMCOS stated that the members understand that they need to become members of the SACCOS, however they may not be able to pay for the fees and shares of both the SACCOS and the AMCOS at the same time. 

Peter Silayo asked what fertilizer members are using.  Ascriti Msemwa, the Chairwoman and Rinusi Ngoro, the Chair of the SACCOS loan committee responded that they use cow manure.  We are still working to help members recognize the value of using inorganic fertilizer with organic fertilizers such as cow manure. 

Rinusi Ngoro, the Chair of the SACCOS loan committee stated that they had previously bought from distribution and were promised low prices, but ended up with high prices for the supplies.  He said that if you want to help us, we need low prices for supplies. 

Ngoro went on to say that there is no market for their crops.  After further discussion, when members say that there is no market for their crops, they mean that when they want to sell their crops, middlemen do not show up in the village to buy their crops.  It does not mean that there is no market anywhere.  However it does mean that members need to find ways of transporting their crops to the location where buyers are located.  This is exactly the solution that the staff at Iringa Hope is proposing.  The staff is identifying buyers who buy regularly and reliably, and is developing plans for the AMCOS to arrange for contract trucking to collect the grain from villages and to deliver the grain to buyers. 

Having answered all the questions, we began our first interview with Sophia Chambo.  Sophia is 32 years old and has been a member of the AMCOS for one year.  She has three children.  Her children are two boys, 16 and 13 and one girl who is 10 years old. 

 

Sophia farms five acres of maize, sunflowers and groundnuts.  Of the five acres, two acres are owned and three acres are rented. 

So far, she has used local seed and has used manure as fertilizer.  She said that the AMCOS has been very helpful, helping her to understand better farming practices.  She intends to begin using hybrid seeds and organic fertilizer.  She says that she and her husband farm together and contract for the use of oxen to plow the land. 

Our next interview was with Rinusi Ngoro, who is also the Chair of the loan committee.  Rinusi is 52 years old and has been a member of the SACCOS for three years.  He farms 20 acres.  He raises 10 acres of maize and 10 acres of sunflowers.  He also has a shop, selling domestic supplies.  He has six children, two girls and four boys.  The children range in age from 32 years old to 11 years old. 

Rinusi’s first loan was for TZS 900,000 to purchase fertilizer and inventory for his shop.  The weather was not good that year and his income was TZS 500,000 from his maize and TZS 500,000 from his shop.  From this income, he repaid his loan and was left with TZS 100,000 of profit after repayment of his loan. 

He has savings of TZS 300,000, so the maximum loan he is able to obtain is TZS 900,000.  So his second loan was also TZS 900,000 to purchase DAP and CAN for four acres.  He used 35 bags of fertilizer for maize and 20 bags of fertilizer for sunflowers.  His income from farming was TZS 1,400,000 so his profit was TZS 500,000 (or about $221) after repaying his loan

His third loan was for TZS 900,000 again, for DAP and CAN fertilizer for his 10 acres of sunflowers.  His harvest is not yet complete, but he expects to harvest 35 bags of sunflowers. 

Rinusi explained that when he said there was no market, he really meant that no middlemen had come to the village.  He said that last year the price for sunflowers was TZS 50,000 per bag.  This year the price is TZS 35,000 per bag. 

He said that last year the price for maize was TZS 60,000 per bag.  This year the price is TZS 35,000 per bag. 

He said that the middlemen only show up when the price is low.  No middlemen show up when the price is high. 

 

He said that the original AMCOS is still in existence, but the repayment rate from their members is very slow. 

Rinusi said that his objective is to earn enough money to put his children through school, expand his shop business and to rent more land to expand his farming.

At Tungamalinga (July 31)

Today we are at Tungamalenga.  This is my last week in Iringa, and we have a busy schedule of meetings.  Tungamalenga has registered their AMCOS with the commission and has joined the Joint AMCOS, so they are further ahead in their planning than some of the other villages.  The chairman of the SACCOS, Absalom, is also the Chairman of the Joint SACCOS. 

 

This SACCOS is a strong organization, with 63 members.  40 are men and 23 are women.  The AMCOS has 77 members.  40 are men and 37 are women.  The AMCOS members who are not members of the SACCOS yet are expected to join the SACCOS.

The amount loaned last year was TZS 55,000,000 (or about $24,000).  This amount was loaned to 42 members.  23 of these loans were to men and 19 were to women.  The average size of the loans was TZS 1,300,000 (or about $580). The funds loaned are made up of TZS 23,000,000 of internal SACCOS capital, and TZS 32,000,000 loaned from the Iringa Hope Joint SACCOS.

Loan repayments will take place from July 31 through August 15.  Paddy prices (Paddy is rice with the hulls on) are very low at this time, and some members are asking for rescheduling of their loans, but the expectation is that all loans will be repaid, although somewhat later. 

Venance Msigala presented the information about how the SACCOS and the AMCOS will work together.  Again, there were many questions.  One of the questions was that, since the Tungamalenga SACCOS serves members in villages that are far apart, the cost of a truck to pick up grain from the far away villages would be high.  We responded that it is up to the local AMCOS to determine the most cost effective means of getting their grain to a buyer.  We will assist them in locating the buyer that will be the most cost effective and we will assist them in identifying the most cost effective means of getting the crops to the buyer, but it will be up to the AMCOS and the Joint AMCOS to manage the process.

Another question that was asked was whether members can purchase supplies from the AMCOS by paying in cash.  This question has been asked a number of times in other villages.  There is not a problem with members paying cash for supplies, but in most cases, members will apply for loans because they don’t have the cash for the purchase of supplies. 

One of the AMCOS members asked whether they would borrow from the AMCOS or whether they would borrow from the SACCOS.  There continues to be some confusion, since, three years ago, the AMCOS bought fertilizer and provided it to members as a loan.  We responded that only the SACCOS made loans and the AMCOS only procured supplies, using funds from the SACCOS.

One of the AMCOS members stated that the SACCOS should not loan cash to members for supplies, because the member could take the cash and buy their supplies from a distributor, instead of buying through the AMCOS.  We responded that members would only want to buy their supplies through the AMCOS if the AMCOS can provide better pricing for the supplies than the distributors. 

Another question was asked about whether the AMCOS could purchase the machinery that removes the hull from paddy that converts paddy into rice.  The price for rice is about TZS 15,000 per bag higher than the price for paddy.  We responded that the economic analysis could be performed to determine what volume of paddy would need to be processed to pay for the machine with a reasonable payback period.  The AMCOS could consider doing this, but we should first plan to begin basic operations of purchasing supplies and marketing crops successfully. 

We asked whether any individual member or group of members might be willing to invest in the machine and start a business converting paddy into rice.  They responded that no member had the funds or would be willing to make the investment.

After the discussion, we held two interviews.  The first interview was with Msafiri Mwenga.  He is 36 years old.  He has been a member of the SACCOS for three years.   He is a member of the SACCOS, but not the AMCOS (He is planning on joining but has not yet done so.).  He is married with three children.  His children are a boy who is 10 years old, a girl who is 6 years old and a 1-year-old boy.  

Msafiri farms five acres of rice.  He grows a variety of rice called SARO 5, that should yield 30-40 bags per acre. 

His first loan was for TZS 600,000 to purchase 10 bags of Yara fertilizer.  His income was TZS 1,000,000 and so his profit after repaying the loan was TZS 400,000 (or about $180). 

His second loan was for TZS 300,000 to purchase five bags of fertilizer.  His income was TZS 450,000, and so his profit after repaying his loan was TZS 150,000. 

We asked why he decreased his purchases of fertilizer each year.  He responded that, in the first year, he borrowed as much as his savings allowed.  Following that year, the Iringa Hope SACCOS had only a few bags left over from the previous year, and the SACCOS had only purchased fertilizer from Yara for one year.  Then, instead of taking out a loan for as much as he needed, he only purchased the amount of fertilizer on hand.  He should have been using 3 bags of fertilizer per acre, which, for his farm would be 15 bags of fertilizer per year. 

His third loan was for TZS 120,000 to purchase two bags of fertilizer.  He has not yet harvested the rice, so he hasn’t yet recognized the income for this loan.

He wants to sell his crop as rice and not as paddy.  Last year, he took his paddy to a company in Iringa, Lufumbe Machine, to remove the hulls from the rice, so he could then sell it as rice, at a higher profit. 

Msafiri is building a house with his profits.

Our next interview was with Silivia Kabwa.  Silivia is 38 years old and has been a member of the SACCOS and the AMCOS for 4 years.  She has four children.  The children are 3 girls and 1 boy.  The boy is 16 years old and the girls are 12 years, 7 years and 2 months old.

Silivia farms six acres.  Four acres are in rice and two acres in maize.  She also has a shop where she sells domestic supplies such as cooking oil.  Her first loan was for TZS 300,000 for buying 12 bags of fertilizer, used only for the rice.  She earned TZS 900,000, so her profit after repaying her loan was TZS 600,000 (or about $265).

Her second loan was for TZS 600,000.  She used the loan to purchase 12 bags of Yara fertilizer from the AMCOS, and to pay laborers.  She earned TZS 1,300,000, so her profit after repaying her loan was TZS 700,000 (or about $310).

Her third loan was for TZS 1,000,000.  She has not yet harvested the crop, so she hasn’t recognized the income for this year yet. 

Her yield from her rice farm is increasing, and she is investing her profits into growing her business at her domestic shop and she is spending her profits to send her children to school.

After our interviews, Absalom Kilipamwambu, who is the Chairman of the SACCOS and the Chairman of the Joint SACCOS, wanted to show us the storage facilities in the area, where farmers are storing their rice production after harvest.  Tungamalenga has an Integrated Development Center with a warehouse, however the warehouse has already been filled with bags of rice.  They could use a warehouse several times larger.  The members anticipate

higher prices that will be available several months after harvest time.  We walked across a field to view a building that was built by the government in 2017.  The building has a capacity of 5,000 bags of rice and currently has about 3,000 bags of rice in storage. 

Absalom explain the need for additional storage to Venance Msigala and Deborah Siekman.

Having completed our interviews and the tour, we head back to town.