My first visit was to Ilambilole and Nduli

Our first visits to villages on this trip are to Ilambilole and Nduli.  These villages are both close to Iringa.  The purpose of our visits is to explain how the AMCOS cooperative will work.  On our way we stopped to pick up Dickson Msungu who is both the Secretary of the Ipogolo AMCOS and the Secretary of the Joint AMCOS.  He joined us for the meeting at Ilambilole.

We have two flow charts that we brought to use to explain how the SACCOS and the AMCOS will work together.  The first step is that a member will contact the Savings and Credit Cooperative Society (SACCOS) and apply for a micro finance loan sufficient to pay for the supplies (such as fertilizer and hybrid seed) that the member will need.  When the loan is approved, the member will receive a voucher for these supplies.  The Agricultural Marketing Cooperative Society (AMCOS) also receives the order.  All the orders from each of the AMCOS locations will be sent to the Joint AMCOS, the umbrella organization which will place an aggregated order on the supplier.  For example, we expect that the Joint AMCOS will place an order on our fertilizer supplier for an order of about 500 metric tons of fertilizer, or about 10,000 50 Kg bags of fertilizer.

At the time that the delivery is needed, the AMCOS arranges for a truck to pick up the order.  The truck will deliver it to the Integrated Development Center building in the village where the supplies will be stored in the warehouse section until the member needs it for planting.  So members will have the supplies available when they need them, in the village.  The Joint AMCOS will send a check to the supplier when the supplies are picked up.

There will be a similar process for selling.  The AMCOS can aggregate the grain of all of its members and when they decide the price is right, they can contract a truck to take the grain to the milling company.  The milling company sends a check for the grain to the Joint AMCOS.  Any funds that were borrowed from the SACCOS by the member will be repaid to the SACCOS directly by the AMCOS.  The funds remaining after the loan is paid, will be given directly to the member. 

For many of those locations where there are both a SACCOS and an AMCOS, we have built an Integrated Development Center building.  These buildings have been built with various grants together with funds donated by the Peter J. King Family Foundation.  The buildings include space for the SACCOS and AMCOS offices, meeting space and warehouse space.  Members can store their grain in the secure warehouse space until some months after the harvest when they feel that the price will be higher.  This enables the members to increase their income by taking advantage of the higher prices. 

We used the two flow charts of the supplies purchasing process and the product sales process for the first time.  It seemed like this made it easier for members to understand how the Member, the AMCOS, the SACCOS, the Joint AMCOS, the Joint SACCOS and the suppliers all interacted with one another.  There was a lot of discussion and a lot of very good questions.  Venance effectively handled the answers to all the questions.

The members reported that some local farmers had entered into contracts and taken loans with NMB Bank.  “The terms were very harsh.”  The farmers were very sorry that they had entered into the contracts. 

It was reported that a company called “Brittany” was selling bags for storage, made out of tarpaulin.  Our AMCOS will be offering a storage bag called PICS for “Purdue Improved Crop Storage.”  These bags were developed at Purdue University to minimize the amount of crops lost during storage due to mold and insect damage.  We have 3,000 of the PICS bags on order for sale by the AMCOS to members. 

Ilambilole had a forecast of the demand for farming input supplies, and they decided that they need to add some supplies to the forecast and said that they would provide us with an updated copy in a week.

We had a special situation at Ilambilole.  Their partner congregation, Our Saviour’s Lutheran Church had made a donation that would enable Ilambilole to be the trial organization to implement the Warehouse Receipt Program.  This is a special program that has been documented by the Tanzania Cooperatives Development Commission. 

In many cases farmer members harvest their grain, and, instead of storing their grain and waiting for higher prices in later months, members sell their grain as soon as it is harvested because they need the money.  This is in spite of the fact that the prices are the lowest during the harvest season.  Some members sell their crops to “Middle Men,” who will come to the village to buy grain at harvest time, offer farmers an even lower price, and then sell the grain at a higher price in town. 

With the Warehouse Receipt Program, the member can store their grain at the IDC building, get a receipt for the grain that they have stored, and get a loan for 60% of the harvest time value of the grain from the SACCOS.  Then when the price is higher, some months after the harvest, they can decide to sell the grain. After selling their grain, they repay their loan for the 60% of the harvest time value of the grain, re-pay any other outstanding loans from the SACCOS that they may have, and then get the remainder of the sale of the grain, in cash.

In many cases, farmers need the money at the time of harvest to purchase supplies for the next planting season, pay for their children to go to school, or for just normal living expenses.  The Warehouse Receipt Program will enable them to have the cash they need when they need it, and enable them to obtain higher market prices when they sell the grain some months after storage. 

The members at Ilambilole were very enthusiastic about the program.  They recognized the clear benefit that this program would provide them.  The program was made possible by a donation for the loan funds needed for the program by their partner congregation, Our Saviour’s Lutheran Church of Hastings, Minnesota.

We asked if any members would like to describe what the program would do for them and if they would like to express their thanks to Our Saviour’s by video.  Four members volunteered.

The first member was Biata Mgimba, the Chairperson of the Ilambilole SACCOS.  She said that this program would be very popular and it would help the AMCOS grow in membership because so many people would want to participate in the program.  She believes that it will raise her income and enable her to send her children to school.  She wants to thank Our Saviour’s Lutheran Church.  “God bless you!”

 The second person to volunteer was Edda Lihweuli.   She said that she is happy because the middle men come at harvest time to buy their grain at low prices.  Now she can store her grain in the warehouse and get a higher price.  She also said that because of the SACCOS program, she can send her children to school.  She said, ”Please convey my thanks to Our Saviour’s for their assistance!”

Next was Mashaka Mwano.  Like most members, Mashaka is a member of both the SACCOS and the AMCOS.  He said that leaving the grain in the warehouse until the price goes up will be sure to improve members’ lives.  “Next time that you come back to Ilambilole, you will be sure to see a difference!”  He said that he knows that a lot of

people helped to make this happen.  “Thanks to the people at CMSO (Formerly known as the Micro Finance Institute), and the people at Our Saviour’s Lutheran Church in Minnesota.!”

 The last person to volunteer to speak was Kornel Lihweuli.  Kornel has been the Treasurer of the SACCOS and has recently volunteered as the interim Treasurer of the AMCOS.  Kornel said that, for a long time, people just accepted low prices at harvest.  Now they will know that they can wait for higher prices.  Because people needed the money to send their children to school, they sold at low prices.  He said that he believes that this program will bring lots of changes and

development for the SACCOS and the AMCOS.  “I want to take this opportunity to thank Our Saviour’s Lutheran Church and our friends in the U.S. for all that they are doing to help us!”

We wanted to hear more, but we were already late for our meeting at Nduli.  Because of all of the questions and discussion, the time has gone by very quickly.

We arrived at Nduli late, and there were only two members there to meet us. 

 It was reported that, out of 58 members, they were only able to grant 12 loans, because there was not sufficient loan capital available to grant loans for more people.

They were enthused that their members would be able to order supplies through the AMCOS directly from suppliers, as opposed to purchasing through distributors.  They felt that, in some cases, distributors had not provided the full weight of the fertilizer in the bags that they purchased, and that in some cases they were not provided with the correct hybrid seed that they thought they had purchased. 

110 bags of maize were stored in the Nduli warehouse portion of the Integrated Development Center (IDC).  Farmers had hoped for higher prices, but unfortunately, this year the prices continued to fall. 

Again there were lots of questions about how the SACCOS and the AMCOS would work together.  After a long discussion, it was already late and we started back to Iringa.