Then there were visits to Mgama and Ihemi

Today we are at Mgama and Ihemi.  Both of these villages are in the process of organizing as AMCOS, but have not yet registered.

Our objective for the visits is two-fold.  First to discuss how the Agricultural Marketing Cooperative Society (AMCOS) and the Savings and Credit Cooperative Societies (SACCOS) should work together.  They should enable members to obtain a Micro Finance loan from the SACCOS to purchase farming inputs such as hybrid seed and fertilizer and use the AMCOS to have direct access to suppliers for lower priced, quality and on-time delivery of farming inputs, such as hybrid seed, fertilizer, insecticide and herbicide.  The AMCOS should also seek ways to market members’ crops to obtain better prices.  The second objective for the visits is to understand where each of the villages are in the process and to see what we can do to help them in their work to prepare to submit the paperwork for registration with the government.

 To be able to visit each of the villages, we are trying to visit two villages in a day. However there have been so many questions, discussion and helpful suggestions from the members in each of the visits, we haven't always had enough time to interview individuals about their experience about the benefits of being members of the SACCOS and what it has meant to their families.  Of course, our first objective is to ensure that there is a thorough understanding of how to implement a plan for their AMCOS, working with their SACCOS, so we always cover this first.

Mgama

Our first visit of the day was to Mgama.  While we were waiting for the members to arrive, we drove a little further down the road to see the new Integrated Development Center (IDC) that is being built.  The construction seems to be moving along well.

Today, nine persons attend our meeting.  The officers of both the AMCOS and the SACCOS are present.  There are 115 members of the SACCOS in Mgama and all are expected to become members of the AMCOS. There is a requirement that each AMCOS will have a minimum of twenty members.  This will not be a problem at this location.

A meeting had been scheduled at the end of June for the organization of the AMCOS.  However there was a “tragedy” in the village and the meeting is being scheduled for later in July.  Often when there is a funeral in the village, everyone attends and anything that had been scheduled is canceled.

The Mgama AMCOS has determined that they will require members to purchase five shares that will cost TZH 50,000 per share.  There also will be an entrance fee of TZH 20,000 charged to members who want to join the AMCOS.  This will make the total cost for members to join the AMCOS TZH 70,000 (or about $35).  The Tanzanian Cooperatives Development Commission requires that we charge a fee.  The amount of the fees is determined by each AMCOS location.

When members asked about the prices that their AMCOS will charge we explained that the cost the Joint AMCOS pays to our supplier will only be marked up to cover the expenses incurred by the Joint AMCOS.  We further explained that, with the discount that we will receive from our suppliers is based on the forecast of demand from all of the AMCOS.  Based on this forecast we expect that our members will be charged prices that are competitive with any other prices that they could obtain.

There is an ongoing concern in Iringa about the low price of maize.  The members at Mgama believe that there is a role for the AMCOS to research additional market opportunities for their crop.  They also have a lack of trust in the existing buying companies.  The net result is a concern that there will not be a market at any price at harvest time. 

We noted that new Integrated Development Centers (IDC’s) are being built at both Mgama and at Ihemi.  The IDC’s are being built with warehouse capability to store about 450 bags of maize.  The AMCOS members will have the capability of storing their grain at the AMCOS location until several months after the harvest time so that they may obtain higher prices.

Members are also looking for recommendations of other crops to grow when maize prices are low.  This is a very difficult thing to do since there is no way to know what prices will do over the coming growing season.  Diversification is one strategy that we have been recommending to them to reduce the risk of low prices in any one commodity.  We always them that the CMSO (Communities Microfinance Strengthening Organization, the newly incorporated version of the Micro Finance Institute.) will be focusing efforts for obtaining supplies and marketing for three stable, non-perishable crops in this first year; maize, rice and sunflower seed.  For most of our members this seems to be what they are looking for.

We were hoping to obtain more detailed information regarding the status of the number of members who had purchased the necessary shares for membership and the registration fee for the AMCOS.  However the Secretary, who had the information was held up and was not able to attend the meeting.  We will need to obtain the information as a follow up.

The members discussed the opportunity for soybeans.  Some time ago, Silverlands, a local poultry producer encouraged farmers to raise soybeans.  Farmers in the Songea region responded by growing large amounts of soybeans and then found that the international market channels had not been developed and the domestic market was not sufficient to purchase the supply on the market.  Since then, most farmers have avoided production of soybeans.  

Members encouraged us to investigate additional alternative channels to market their maize.  They are hoping that we can provide higher prices and more demand.

These are just a few of the many recurring discussion items from our far-ranging discussion.  We could have talked much longer, but once again, we were already behind our planned schedule for leaving for our next meeting at Ihemi.

At Ihemi

The key officers and board members of both the SACCOS and the AMCOS were in attendance at this meeting.  They said that there were more than 60 members planning to be members of the AMCOS. 

We started this meeting by discussing the interactions between the SACCOS and the AMCOS.  Once again there was a lively discussion about how the AMCOS would work with the SACCOS.  Members are generally very positive about the benefits of their AMCOS but they have many good questions that need to be discussed.  Some of the items we discussed at this meeting are:

A question was asked, “Could the AMCOS/SACCOS take crops in lieu of re-payment of the loan?  This question was also asked in previous sessions in other villages.  The reply that we provide is that we cannot let the AMCOS or the SACCOS take ownership of crops.  The farmer must take ownership of the risk.  If the AMCOS were to take ownership of crops, then they would own the risk, and in fact, then all the other members would assume the risk of that one farmer.  So the answer is always, “No.”

Another question asked was whether the AMCOS could store all types of crops in the Integrated Development Center (IDC) warehouse.  There was an interest in storing potatoes.  We responded that we recommended storing only stable, non-perishable crops, such as maize, rice or sunflower seeds.  However it is not our decision, rather it is up to their local AMCOS board. 

A question was asked if a member could sell to a buyer directly, instead of selling through the AMCOS.  We responded that there are advantages to selling through the AMCOS, but you can sell directly if you wish.  One big advantage is that the AMCOS can arrange transportation to a buyer, with one truck transporting the crops from many farmers at one time, as opposed to each farmer having to arrange the transportation of his crops, individually.

A question was asked about whether the Iringa Hope staff would recommend the crops to plant.  We told them that the Iringa Hope staff will respond with opportunities to purchase the farming input supplies needed to plant different crops, and advice regarding the best farming practices for different crops, but the decision of what crops to plant and how much to spend on farming inputs would be up to the individual farmer.  The risks of production should be borne by the farmer, not by the AMCOS or the SACCOS.

The officers reported that when they were talking to the Registrar’s office, the Registrar said that an “Economic Viability Form" was required to be completed, and that the AMCOS needed to show that they had TSH 3,000,000 (about $1,325) in assets as a requirement for registration.  We had not heard this before.  The Economic Viability form was required for the Joint AMCOS which is called a secondary AMCOS, but we were not aware of any requirement for the primary AMCOS.  This seems to be a new requirement.  We will have to investigate this further.

The discussion took a long time, so by the time we are done it was time to drive back to Iringa.

Certificate of Registration

Last week we visited the Regional Registrar’s office in Iringa to receive our certificate of registration for the Joint AMCOS.  This reflected many hours of work by Venance Msigala, our Iringa Hope Agronomist.  There were several changes in the requirements that meant many repeated trips to the Registrar’s office.  Now that we have received the registration for the Joint AMCOS, we are working to finish registering each of the local AMCOS.  It is amazing how long and complicated the process for this is!