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!

On June 20th I was at Mgera and Mkwawa

Today we are visiting Mgera and Mkwawa.  Mgera is the name of the area.  The SACCOS was initially registered as the Kitapalimwa SACCOS.  We met at Mlangali, which I was told is one of the “Hamlets” nearby. 

This was a special visit for me, since I first visited Mlangali in 2014 and 2016.  I was part of a group representing Zion Lutheran Church in Cottage Grove, Minnesota, which is the partner congregation of the parish at Kitapalimwa.  We helped to establish the SACCOS at Kitapalimwa in 2014.  While we were there, we visited the 12 “Preaching Points” near Mlangali, holding medical clinics at a different village every day. 

We stayed at the home of Pastor Regina Kibasa in Mlangali.  She graciously shared her home with us.  We had many pleasant evening meals there, followed by many evening checkers games with members and officers of the SACCOS and many of the Evangelists of the Preaching Points and translators including Kelvin Mwano and Goodluck Kihongosi.

It was good to see Jomo Mahenge, the Chairman, Ayoub Mtweve, the Treasurer, Howa Sanga, the Secretary, and Mary Sanga, again.  There were hugs all around when we met again.

Kitapalimwa is preparing to register their AMCOS.  When we described how the AMCOS and the SACCOS would interact together, there were many questions.  The officers of both he SACCOS and the AMCOS were present.  There are currently 61 members of the SACCOS and the AMCOS.  This includes 29 women and 32 men.

We discussed the importance of obtaining the forecast for the demand for farming input supplies.  The officers of the SACCOS are looking forward to completing the construction of the new Integrated Development Center (IDC) at Mlangali which will include warehouse space.  They inquired about the availability of the new PICS bags that will enable them to store their maize without losing part of the crops after harvest due to insect damage or mold.  We told them that we expect the PICS bags to arrive in the next week.

The meeting at Mlangali.  Howa Sanga (behind Ayoub Ayoub Mtweve) SACCOS Secretary, Ayoub Mtweve, SACCOS Treasurer, Jomo Mahenge, SACCOS Chairman, Mary Sanga, member of SACCOS and AMCOS, Sophia Kalonga, AMCOS Secretary and Lawrence Msigala, AMCOS Chairman

It was nearing the time when we had to depart for our next visit, Mkwawa.  We just had time for one interview.  We spoke to Mary Sanga, who we had interviewed in the past, but she loves to talk about how the SACCOS has made a difference in her life. 

Mary Sanga is married and has three children.  The first two children are already married and her third child is in secondary school, Form 3 (equivalent to our Junior year in high school).

Mary farms 10 acres of maize, 2 acres of tomatoes, and 2 acres of sunflowers.  This is a lot to farm.  She hires a team of oxen to cultivate the land, and she hires laborers to help her to farm.  In 2014, the first year of the SACCOS, she took a loan of TZH 500,000 (about $220).  In 2015 she took a loan of TZH 1,000,000, followed by loans of TZH 1,000,000 in both 2916 and 2017.  With the profits from her loans, she has sent her children to school and bought additional property.  She intends to buy 2 milling machines and provide a contract service of milling maize to flour.

When the IDC is completed, she plans to use the warehouse to store grain, so as to obtain the higher market prices some months after harvest.  She is looking forward to having the AMCOS registered and in operation.  She thinks that the AMCOS is going to improve her productivity.  She looks forward to having the farm inputs available on time.  When she has purchased the inputs from distributors in town, the supplies are not always available when she needs them.  She also said that she looks forward to the AMCOS helping her to market her crops.  In the past, when she has sold to a middleman, she has gotten lower prices than the market prices that she will receive using the AMCOS.  It is always a pleasure talking to Mary.  She is a very good businesswoman.

We then drove on to Mkwawa.  Mkwawa is close to Iringa, and many of the members have jobs in Iringa as well as farming small plots of land near their homes in Mkwawa.  The AMCOS is a registered member of the Joint AMCOS but has not yet completed registration with the government.  There are 43 members of both the SACCOS and AMCOS.  This includes 23 women and 20 men. 

Again there was a lively discussion during the presentation of the AMCOS/SACCOS interaction process with many questions.  There were some “What if” questions as members tried to anticipate the kinds of situations that may arise and they would be called on to manage.  One member asked whether a member of an AMCOS who did not want to become a member of a SACCOS but wanted to purchase supplies through the AMCOS by paying cash, would be allowed to do that.  We said that it was our experience that every member wanted to be part of the SACCOS so that they could take advantage of taking loans.  We asked whether they had actually encountered such a situation.  They said no.  This is not a situation that we expect to encounter.

A member suggested that they could charge fees for storing crops in the warehouse.  We responded that the local AMCOS was in charge and could decide locally whether to charge fees such as that. 

Another question was asked that has recurred several times. “What happens when there is no market available at any price?”  This is part of the concern that the price of maize has fallen to TZH 330/Kg, when it was TZH 1200/Kg as recently as May 2017, a drop of nearly 75%!  There have been many questions about finding more marketplaces that can purchase maize from farmers.  This is an issue that we will continue to investigate. 

We are also being asked about whether the AMCOS could enter into value-added processing of milling maize into flour.  We have considered this, however, we will be investigating other sources of milling buyers in the short term.  In the longer term we will need to consider all options.

The discussions lasted long, so we are headed back to Iringa. 

So this is Ipogolo

Today we are at Ipogolo.  We are met by Rev. Robinson Sakafu, who asks us to join him in his office for chai before the meeting.  Rev Sakafu is new to the Ipogolo parish.  He has only moved here two weeks ago.  He has not had previous exposure to the Iringa Hope SACCOS or AMCOS, but he is very interested in learning about us and enthusiastic about the benefits to his congregation. 

There are 80 members in the SACCOS here.  There are 45 members who belong to both the SACCOS and the AMCOS.  This includes 24 women and 21 men. 

The SACCOS officers are not present at the beginning of the meeting, because they are working.  We encourage both SACCOS and AMCOS officers to be present for our meetings to ensure that there is agreement on how the two organizations will need to work together.

The members expressed their anticipation in having the AMCOS in operation.  They said that when they bought products through distributors, they didn’t have any trust that they would be receiving the products they had ordered, or that the fertilizer would not be re-bagged with filler product.  They also said that there were problems with availability.  Often the products were not available at the time that they were needed for planting. 

They were satisfied with the presentation of how the AMCOS and the SACCOS would interact with each other.  However they were looking forward to receiving more detailed instruction on the record keeping requirements and the documentation that would be required.  We told them that we are planning to give detailed directions in a training session that would be announced shortly. 

There were some questions about how things would operate.  One question was whether the AMCOS could take the funds that members had invested to purchase shares to purchase supplies.  We responded that the purchase of supplies would be provided by the funds loaned for the purchase of supplies by the SACCOS, so there would be no need to use the funds generated by the purchase of shares by the members of the AMCOS.

There also was an ongoing concern that there is no market for the sale of maize.  It seems that many farmers here stored their maize from the previous year’s crop in the hopes that the price would rise and then they would sell their maize.  Unfortunately, maize prices continued to fall from their high of TZH 1,200 per Kg in May 2017 to the current price of TZH 330 per Kg today.  As a result, there are two years of harvests available to sell at this time.  This seems to be presenting more of a supply than the capacity of milling companies.  As a result there is little to no market for buying the maize being offered by the farmers. 

After the discussion, we interviewed two persons.  The first to be interviewed was Atu Naymoga.  She is married and has three children and six grandchildren. 

Her first loan was in 2015 for TZH 900,000, or about $400.  She used the loan for seed for raising maize on her 2 acres and for her charcoal business.  Unfortunately, the weather was not good and she had a bad yield so she only made a little money. 

The second interview was with Shdack Kilamgwila.  He is married with three children.  He farms maize and raises pigs.  His first loan was in 2015 when he took a loan for TZH 300,000.  He invested TZH 200,000 to buy 4 pigs and spent TZH 100,000 on input supplies for his maize.  He estimates that he made a profit of TZH 600,000.  He repeated the same in 2016, and again made a profit of TZH 600,000 (or about $800).  He was not able to take a loan in 2017 because there were not sufficient funds to loan to all those members who applied. 

With his profits, he bought a lot on which to build a house.  Although the house is not yet finished, he and his family have moved into the house while they continue to work on finishing it. 

Jared Kivike, the new chairman of the SACCOS, had arrived late, so we invited him and Gideon Mdegala, the chairman of the AMCOS to remain so that we could talk to both of them together.  They were joined by Dickson Msungu who is the Secretary of the AMCOS and also the Secretary of the Joint AMCOS and Rev. Robinson Sakafu.

We asked the two chairmen about what they thought the biggest challenges would be for them in the coming year.  Kivike said that there were a number of members that had loans that had not yet been re-paid.  Kivike said that all the members had been contacted and were paying slowly, but regularly.  There were three members who had been farming, but had gotten government jobs and had moved away.  Their directors had been contacted and the money was re-paid.  These are just some of the challenges facing the officers of the SACCOS and AMCOS.  However they are responding by taking the correct actions. 

For the past year, the SACCOS had loaned TZH 20,000,000 (about $8,850) of their own capital, and TZH 10,000,000 that they had borrowed from the Joint SACCOS.  In spite of this there was still a shortfall of about TZH 25,000,000 (or over $11,000) for which members wanted to take out loans, but for which there was not sufficient loan capital to meet all the members’ demands. 

While it is frustrating to be short of capital to meet the demand, it is also good to see that the members are doing well and appreciate what is available.  Problems like these are issues that have to be dealt with by a growing organization.

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.

Reviewing Fertilizer Needs

Last Friday, Venance Msigala, the CMSO staff Agronomist and Gedion Chusi, the Intern Agronomist , spent much of the day reviewing the forecast of demand from each of the villages for fertilizer and other farm inputs in preparation for our meetings with suppliers.  The forecast for fertilizer from the individual AMCOS organizations could be more than 500 metric tons, or 10,000 bags of fertilizer at 50 Kg per bag.   

Over the weekend, we met a local dairy farmer who also had large fields of maize.  He told us that because the price of maize had recently dropped so low, he had decided not to plant maize this year, and instead, at the current low prices, he would buy maize feed for his cows from other local farmers.

The current price of maize in Iringa is TSH 330/Kg.  (TSH = Tanzanian Shillings, $1.00 = TSH 2,260)  This is equivalent to a price of $3.72 per bushel.  The current price of corn in the U.S. is $3.91.  So the prices between Corn in the U.S. and Maize in Tanzania are not that different. 

However in comparison, the price of maize as recently as April 2017 was TSH 1200/Kg.  This is the equivalence to $13.52 per bushel.  By comparison, the highest price for corn in the U.S. over the past 40 years was $8.25 in 2012.

 When the price of maize was TSH 1200/Kg.  The impact for farmers was very positive for those with maize to sell on the market. However, small holder farmers consume a large portion of their crop of maize.  For consumers, the price was very negative, since maize is a primary source of food in Tanzania.  In response to an outcry from consumers, and in an effort to contain inflation, the Government placed an export ban on unprocessed grains in June 2017.  In November 2017, the export ban was lifted, but prices have continued to fall to the present level. 

At current prices, maize production should be profitable, both with the expenses of the use of hybrid seed and fertilizer or without the use of hybrid seed and fertilizer.  However it will not be nearly as profitable as a year earlier.

We met with Dionis Tshonde, the local agronomist and sales representative for Yara Fertilizer on Monday, June 18.  He reviewed with us the fertilizer program that Yara had for farmers of Maize, based on soil type. He also reviewed the pricing for Iringa Hope Joint AMCOS, based on our projected demand.  Based on our forecast of a demand of 500 metric tons, we could present more demand than YARA’s largest distributor, and we could be the largest fertilizer customer in the Iringa area. 

Based on the typical expected yield of maize in most farmer’s fields, the level of expected depleted nutrients based on continuous corn crops, and very low levels of 1% organic matter in the soil, Tshonde recommended application of three 50Kg bags of YaraMila Cereal fertilizer.  Yara recommends this fertilizer for cereal crops needing nutrient elements.  Two bags should be applied at planting and one bag applied later as side dressing.  Without adding nutrients to the depleted soil, the maize crop is rather sparse.  With these enhancements our members yields are very similar to those in the US.  (The illustration below shows what happens when maize is grown with various soil deficiencies.  We have observed these problems in the maize that has already been harvested.))  

 We will begin negotiations with Yara management for final prices, based on our demand forecast.

Norm Siekman Working In Iringa 2018

The Iringa Hope Office on the campus of the University of Iringa.  The Building was sponsored by the Peter J. King Family Foundation.

Hello, my name is Norm Siekman.  This is my third trip to Tanzania, and my first trip as a member of the Board of Directors of Iringa Hope.  During this trip I will assist the staff of Iringa Hope in Iringa in the development of the Iringa Hope Agricultural Marketing Cooperative Society (AMCOS).  I will share a description of the functions of that cooperative in the paragraphs below.

First, I will share a little history of my work with Iringa Hope.  My first trip to Tanzania was in October 2014, as part of a group led by Peggy Howell coming to Iringa from Zion Lutheran Church to visit our partner parish of Kitapalimwa.  Each of the ten of us coming to Iringa had a project that we wanted to share with the members of the parish in Kitapalimwa.  My project was to assist the village of Kitapalimwa in the initial development of their Savings and Credit Cooperative Society (SACCOS) to provide Micro Finance loans to its members.

During that two and a half week visit in 2014, we stayed in the hamlet of Mlangali, at the home of Pastor Regina Kibasa and visited each of the twelve preaching points surrounding Kitapalimwa. Ryan Engelstad, the nurse with our group, held a medical clinic in each of the villages, assisted by other members of the group.

In 2016, I returned to the parish of Kitapalimwa with the group representing Zion Lutheran Church in Cottage Grove.  This time I spent half of the time in Mlangali and half of the time with the staff of Iringa Hope as they were leading training for the officers of each of the Savings and Credit Cooperative Societies (SACCOS) that manage the Micro Finance loans in each of 33 villages where Iringa Hope has a presence. 

I left Minneapolis on Monday, June 11, arrived in Dar es Salaam on Tuesday June 12, and after an all-day drive from Dar es Salaam, arrived in Iringa last evening on Wednesday, June 13.  So this is my first day in the Iringa Hope office where I will be working from now through the first week of August.  The office is located in the Peter J. King Family Foundation building on the campus of the University of Iringa. I was greeted on my arrival by the familiar faces of the staff of the Micro Finance Institute (the MFI has recently been spun off from the University as a non profit called the Community Micro-finance Strengthening Organization - the CMSO).  I had met nearly everyone during my last two visits in 2014 and 2016.

For this visit, I was asked by Dr. Tom Hendrickson, the Chairman of our Iringa Hope Board of Directors in Minnesota to come to Iringa to assist the staff in Iringa in the Development of the new function provided by Iringa Hope, the Agricultural Marketing Cooperative Society (AMCOS).  The SACCOS and the AMCOS are two types of cooperatives in Tanzania that are registered with the Tanzania Cooperatives Development Commission (TCDC) established in Tanzania by the Cooperative Societies Act.

Our first SACCOS location was established in 2008 at the village of Ihemi, under the leadership of Tom Hendrickson.  Since then the network of SACCOS offices providing Micro Finance loans has grown to 33 locations. 

In the small villages in the region of Iringa, farmers are typically farming two to four acres of crops, in most cases, Maize.   They are aware of modern farming practices, such as using hybrid seeds, instead of the traditional seeds from the previous year’s crop and using fertilizer, but unless they have the money saved, or have access to credit, in most cases, they aren’t able to afford the expense of purchasing hybrid seed and fertilizer. 

With the access to credit available through micro finance provided by the Iringa Hope SACCOS, many farmers can now afford to buy better seed and fertilizer.

However, access to credit alone doesn’t help if quality seeds and fertilizer aren’t available at the right time, at a reasonable price.  Each AMCOS cooperative, managed by officers elected by local members, will, with the assistance of the Iringa Hope staff, be able to access seed, fertilizer and other farming inputs.  These will be delivered to their village location, at prices that they would not be able to have obtained by buying through distributors.

So this year, working with the Iringa Hope staff, we are assisting villages to organize local AMCOS cooperatives, which are registered with the government.  There is a Joint AMCOS organization, with its own elected officers and Board of Directors that coordinates the activities of each of the local AMCOS cooperatives and aggregates the orders of supplies from each of the separate locations.  We then develop contracts with the major suppliers of farming inputs for the aggregated demand forecasted by each of the AMCOS.

In our first meeting with the staff we discussed the objectives for my stay and the objectives for establishing AMCOS organizations in potentially each of the 33 SACCOS locations offering micro finance loans.  Our plan is to meet with major suppliers of fertilizer, seeds, herbicides, insecticides, and any other supply products needed by the members.  We are also meeting with the major buyers of agricultural crops that our members raise to determine ways to obtain the best prices for their products.

 Following our meeting the MFI Executive Director, Enock Ugulumu, accompanied us on a visit to the executives at the University of Iringa and then on to visit General Secretary Nayman Chavalla and Pastor Lusungu Msigwa at the Iringa Diocese of the Evangelical Lutheran Church in Tanzania.  After this day of meetings, we are on to beginning our work on AMCOS development.