Ukwega and Ipalamwa

Ukwega

This morning we had wanted to start at 8:00 A.M.  However we found that we had a flat tire that needed to be repaired.  It took about an hour, so we didn’t get started until 9:00 A.M.

Ukwega is about a two-hour drive from Iringa, so we arrived around 11:00 A.M.  The scenery is beautiful.  The last portion of the drive is along a ridge line.  Venance Msigala estimates that we are at about 6,000 feet in altitude.  As we drive, we see many scenic views of the valleys below.  We also note how maize is grown on steep hillsides to take advantage of all of the crop-growing land possible.  There are also beans, bananas and pyrethrum grown in this area.  Pyrethre flowers, when dried, are used to produce pyrethrum, a natural insecticide.

When we start the meeting, there are fourteen officers, board members and members of both the SACCOS and the AMCOS present.  It is reported that there are 83 members of the SACCOS including 15 women and 68 men.  Of these, 50 are also members of the AMCOS, including 12 women and 38 men. 

They have submitted the paperwork for registration with the government, but they have not yet received their certificate of registration.  Venance Msigala will follow up with the Tanzania Cooperatives Development Commission to follow the paperwork. 

We then proceeded to begin our presentation on how the AMCOS will interact with the SACCOS.  Again there were many questions and lengthy discussions.   One of the questions that have been asked many times previously was whether the AMCOS could consider selling supplies to non-members.  We replied that it is up to the local AMCOS members.  However the prices to non-members will be higher than the prices given to members. 

Another question was asked about whether there were guidelines regarding how large of a loan is given to members.  We responded that the loan process for providing loans to members for the purchase of supplies from the AMCOS is different in that, when the loan is approved, the member is given a voucher for the amount of the supplies for which his loan is authorized.  Otherwise, the procedure for granting loans should be the same as before the AMCOS was in place.  All decisions on loans are up to the judgment of the loan approval committee.

There was a question about the cost of supplies.  In 2016, when members took out loans for supplies, the interest charged by the Joint SACCOS for capital loaned by the Joint SACCOS to the SACCOS was 15%.  This interest was then charged to the SACCOS member who was purchasing the supplies.  Jeff Duma then placed the order for the fertilizer.  There was a concern that with our discount plan, the price for fertilizer would be higher than previously charged.  We responded that the current plan is different than what was done in 2016. However, because we are dealing directly with suppliers, the prices that members pay should be less than the prices charged by distributors or other middlemen.

There was a concern that all supplies would need to be delivered to the village before the rains begin.  In this area, once the rains begin, it would be difficult for delivery trucks to reach the village.  We said that our timeline plan is that all deliveries should be made by October 1.  Members agreed that delivery by that date should be sufficient. 

There was a discussion about the One Acre Fund.  The One Acre Fund (1AF) supplies fertilizer to farmers at the beginning of planting season, on a loan basis.  The terms of the loan are that 1AF expects loan repayment on a regular basis immediately upon the granting of the loan.  Members reported that 1AF provided soil testing and provided Urea + DAP + NPK fertilizer to the farmers.  Members reported that the crops did very well.  However Urea + DAP will cause the soil to become even more acidic.  This is a problem at the high altitude areas.  In a later meeting we discussed this with Yara Fertilizer representatives.  We believe that we can provide farmers with better solutions.

Members reported that bean seeds were not available for planting.  Most farmers use seed left over from last year’s crop.  They have perceived that, as a result, their yields have been decreasing.  We suggested that Venance Msigala should investigate this with the seed suppliers that we are meeting. 

When farmers are selling at harvest, the prices are typically the lowest through the year.  Some farmers would like to leave their beans with the SACCOS as collateral for additional loans.  We responded that as the general rule, the SACCOS or the AMCOS should not accept the risk for decisions that farmers make.  As part of a warehouse receipt program, the SACCOS could grant a loan for 60% of the market price of crops at harvest so that farmers could have funds for the purchase of farm inputs for the next year, to pay for their children’s education, or for other purposes.  But the SACCOS should not accept the crops as collateral at 100% of market value.  Also, loans should not be given if there is not sufficient loan capital available to meet the needs of new loans for all members.

Our first interview at Ukwega was Bertha Ngusi.  Bertha is 51 years old and she has been a member of the SACCOS for three years.  She is married and has six children, three sons and three daughters.  Four of the children are married and two of the children are still living with Bertha.

Her first loan was for TZS 150,000 to purchase seed and fertilizer for one and a half acres of beans.  Her income from the loan was TZS 350,000 for a profit of TZS 200,000 (or about $88).  With the profits she bought three pigs. 

Her second loan was for TZS 350,000 to purchase seed and fertilizer for two acres of beans.  She earned income of TZS 930,000 for a profit of TZS 580,000 (or about $256).  With the profits, she bought maize as feed for the pigs and she was able to send her children to secondary school. 

Her third loan was for TZS 450,000.  With this loan, she was able to rent an additional acre of land, so she is now farming three acres of beans.  The crop is not yet sold for this year, so she hasn’t yet recognized the income. 

With the profits she is planning to purchase hybrid chickens and purchase a tiling machine, to tile other farmers’ fields on a contract basis.  She is also a sales agent for pyrethre flowers.  These flowers, when dried, are used to produce pyrethrum. 

This is a good example of how, with the access to credit through Micro Finance loans, and with hard work, SACCOS members are able to grow their businesses and increase their income, for the benefit of their families.

Bertha said that she gives thanks for the help and advice that Venance Msigala gives to her to help her increase her income.  “He does a good job as a teacher.”

Our next interview was with Samweli Kigala.  Samweli is 43 years old.  He is married with one child who is two years old.  He farms five acres of maize and has one pig.  He has been a member of the SACCOS for four years.

His first loan was for TZS 250,000 to purchase seed and fertilizer for two acres of beans.  His income from the loan was TZS 600,000 for a profit of TZS 350,000 (or about $150).

His second loan was for TZS 600,000 to purchase seed and fertilizer to plant three acres of beans.  His income from this loan was TZS 1,300,000 (or about $575) with net profit of TZS 700,000 (or about $310).

His third loan was for TZS 900,000.  He is waiting for the beans to sell before he recognizes the income. 

With the profits, he plans to build a small building that he can use as a restaurant to sell chips and soda pop.  He also plans to sell his beans at the Iringa market.  He previously sold his beans to middle men who came to the village.  He hopes that he will earn higher prices by selling in the market. 

Before we left for Ipalamwa, we were invited for lunch to the Pastor’s house.

We drove to Ipalamwa by turning back down the road that we drove to Ukwega.  Ipalamwa is about a half hour away from Ukwega.  We met with the officers and the board members of the AMCOS and the SACCOS.  There were supposed to be fifteen members at the meeting, but the Chairperson said that some members didn’t get the communication.

The AMCOS is registered with the Tanzania

Cooperatives Development Commission.  The certificate of registration was issued on May 15, 2018.

We heard more about the One Acre Fund.  Members said that the One Acre Fund delivers inputs on time.  Other villages have complained that often distributors don’t have supplies in stock and deliver inputs late or not at all.  It will be important to ensure that our AMCOS locations place orders on time for delivery on time.  We have currently included a sufficient interval for an ordering due date in our timeline milestone plan.

Another question was, “Why do we need to join two organizations and pay fees to two organizations when they are both under he same roof?  We responded to this question that even though our Iringa Hope organization works for both the AMCOS and the SACCOS, the Joint AMCOS and the Joint SACCOS are indeed two separate organizations and the requirement for separate registration fees is not optional but is a requirement of the Tanzania Cooperatives Development Commission.

Venance will be making recommendations of the seed varieties that are known to do well in each area. 

Another question asked was, “Can the AMCOS market two crops; maize and beans?”  Our response was that we are investigating alternative markets to ensure that there are markets available at the best price for the AMCOS members when they want to sell their crops.  Our first priority is for maize, since it is the predominant crop for this area.  We will also investigate markets for other non-perishable crops.

The Chairman of the SACCOS said that people from other lending institutions, including other cooperatives and the CRDB BANK, have contacted him.  Their interest rates are all very high.  He thanked us for the work that is being done.  He said that he tells all other institutions that before they contact him, they should contact Iringa Hope and discuss any proposals that they have.

He thanks Iringa Hope for the work that it is doing and he thanked Venance Msigala for the good work that he is doing to advise their members.

We then proceeded to have two more interviews.  The first interview was Jeneda Kasuga.  Jeneda is 50 years old.  She is married and has six children.  She has three daughters and three sons.  Their ages are 35, 25,19,12, 9, and 7.  She is a member of both the SACCOS and the AMCOS.  By coincidence, Jeneda is a relative of Gedion Chusi.  Gedion’s father is originally from this area.  Jeneda farms four acres.  She farms two acres of maize and two acres of beans. 

Jeneda’s first loan was for TZS 135,000 for cultivating beans and maize.  She reported total income of TZS 935,000.  She realized a profit of TZS 600,000 for her beans and an additional TZS 200,000 for her maize, for a total profit of TZS 800,000 (or about $350). 

Her second loan was, again, for TZS 135,000.  She received income of TZS 685,000 and a profit of TZS 550,000 (or about $250). 

Her third loan was, again, for TZS 135,000.  The yield for her crops are not yet in, so, she has not yet realized the income for the year. 

She has used her profits to purchase better food for her children, to send her children to school and it helped to pay for some hospital treatment that was required.  She said that she thanks us for the meeting to share information with the members and she thanks us for organizing the AMCOS.  She is confident that it will make a big difference in their lives. 

The next interview was with Aspilwe Kasuga.  Aspilwe is 38 years old and has been a member of the SACCOS for three years.  He is also a member of the AMCOS.

He has four children, one daughter and three sons.  His children are: twins that are 11 years old, a six year old and a three year old.   He farms four acres.  He has one and a half acres of beans and two and a half acres of maize. 

His first loan was for TZS 300,000 for seed and fertilizer for maize.  His income was TZS 1,950,000 and he realized a profit of TZS 700,000 for his maize and an additional TZS 950,000 for his beans, for a total profit of TZS 1,650,000 (or about $730).  With the profit he realized, he paid for uniforms and school fees for his children and he bought 4 goats.

His second loan was also for TZS 300,000.  The income that he generated was TZS 1,700,000.  He achieved a profit of TZS 600,000 for his maize and TZS 800,000 for his beans for a total profit of TZS 1,400,000 (or about $620).  With the profits, he made bricks for the house that he is building and he purchased iron sheets for the roof of his house. 

For the future, he plans to increase his savings in the SACCOS so that he can borrow more money, and he plans to purchase more land to increase the size of his farm. 

He said that he wants to thank Iringa Hope for bringing the SACCOS and the AMCOS to the village.  He said initially his income was down, but since he has been a member of the SACCOS, he is doing much better.

Then there was Ugesa

Ugesa is about a two-hour drive from Iringa.  Because of the long drive, we will not be visiting an additional village today.  It is a very scenic drive with pine trees that are being grown for lumber and several milling operations along the way and we encounter a number of trucks on the road, hauling lumber.

There are nine officers and board members that attended the meeting this morning.  We begin by reviewing the membership and the loans made in the last year. The Treasurer of the SACCOS reported that there are 137 members of the SACCOS, with 73 men and 64 women.  65 of these members are also members of the AMCOS.  They are in the process of registering as an AMCOS, but the registration is not yet complete.

The Treasurer reported that the total loans made last year was TZS 46,485,200 (about $20,500).  This included loans to 98 members, or about $210 per loan. Loans were made to 53 men, 42 women and three loans were made to institutions.  The repayment rate, so far, has been 90%.  This is an area that grows about 50% maize and 50% potatoes.  There had been too much rain for the potatoes and so the crop was not good.  The remaining loan payments are being rescheduled and the officers believe the loans will be fully repaid.

The government requirement for the registration of an AMCOS is that all members must pay an entrance fee and purchase shares in the AMCOS.  This AMCOS has set these fees as TZS 10,000 for the entrance fee and the cost of shares as TZS 10,000.  The AMCOS is requiring members to purchase 2 shares initially, and three more shares within two years.  So far, all 65 members have paid for

the entrance fee and the two shares, for a total of TZS 30,000 each (about $13 each).  The Government Commission also requires that the AMCOS must have TZS 300,000 (about $132) in assets.  The AMCOS is ready to join the Joint AMCOS. They plan to have a meeting in late July to allow the members to have a formal vote to join the Join AMCOS.

We then proceeded to deliver the presentation on how the AMCOS would work and the interactions between the AMCOS and the SACCOS.  Again, as in other village meetings there was much discussion and many questions. 

One of the questions was asked about what would be the ordering interval between ordering supplies and delivery.  We have proposed a timeline that would request that members’ orders be received from the AMCOS to the Joint AMCOS by September 1 for delivery by October 1.  Yara Fertilizer has assured us that this would be more than sufficient to deliver our forecasted demand of 10,000 bags of fertilizer.  However we have been advised that we should place our orders for hybrid seed as early as possible because some seed companies ran out of some varieties that farmers wanted to order last year, and farmers had to settle for some varieties that were not optimized for their areas. 

We have discussed how the Integrated Development Center buildings are designed to have warehouse space that enables AMCOS members to store supplies before planting.  They can store crops after the harvest to enable members to obtain possible higher prices after harvest.  A question was asked whether members could store green beans in the warehouse.  We advised them that the AMCOS could decide for themselves what guidelines to issue regarding what crops could be stored.  However, we recommend that only staple, non-perishable crops should be considered for storage in the warehouse, such as maize, rice or sunflower seed.

We have time for two interviews today.  The first interview was with Onesmo Nziku.  He is 27 years old, and has been a member of the SACCOS for two years.  He plans to be married later this year.  He farms three acres of maize, green beans and potatoes. 

His first loan was for TZS 600,000 (about $265) to purchase seed and fertilizer.  He was able to obtain a profit of TZS 900,000 (about $400).  He plans to take out another loan this year.  The time for his loan approval will be coming up soon.

Onesmo is currently building a house.  He says that he thinks he will be able to complete the house next month, before he gets married.  He thinks that his future is very bright, because he is able to take out loans that will increase his income.

Our next interview was with Atupavye Mgeyekwa.  She is married and has five children.  She has three daughters and two sons.  The oldest son and daughter are married and she has three children in secondary school. 

She farms three acres of maize, two acres of potatoes and ½ acre of green beans.  She has been a member of the SACCOS for three years. 

Her first loan was for TZS 300,000.  She used the money from the loan to purchase hybrid seed and fertilizer.  She made income of TZS 550,000 and a profit, after repayment, of TZS 250,000. 

Her next loan was for TZS 200,000.  She hasn’t yet harvested the crops, so she hasn’t recognized the income yet.  If the profit is great enough, she wants to build a house next year. 

She says that because of the SACCOS, her life is better and she has made a better life for her children.

With the interviews completed, we begin our drive back to Iringa. 

At Pommerini and Kitowo

Today we are starting our visit at Pomerini.  The SACCOS and AMCOS combined have 177 members.  There are 93 men and 84 women.  Of the 177 members, 65 are members of the AMCOS

Out of the 177 members of the SACCOS, all took loans last year except 5 members, who did not qualify for a loan because they were  new members.  A total of TSH 87,000,000 (about $38,500) was loaned last year.  TSH 27,000,000 (about $12,000) was loaned from the local SACCOS loan capital.  TSH 60,000,000 (about $26,500) were funds obtained from the Joint SACCOS.

Once again, there was a lot of discussion and many questions during our presentation of how the SACCOS and the AMCOS would work together. 

One suggestion that was made was that, if the vouchers that their SACCOS issues for the purchase of farming input supplies was going to use the same form as government vouchers, then we need to have our vouchers labeled differently to avoid confusion.

Another issue was the very low price of maize.  Not only is the price low, but there are no buyers for their maize, especially in Pomerini, which is far from the market in Iringa.  No buyer wants to drive this far to pick up bags of maize for resale in Iringa. 

The Secretary asked, "Now that the SACCOS and AMCOS is growing so large, have you thought of the AMCOS taking on the responsibility of value-added processing, such as milling maize into flour?"  This suggestion has been made a number of times at other AMCOS meetings.  After much discussion, everyone came to the conclusion that we may want to do that in the future.  In the short term, we should identify individuals that may want to invest in the equipment and start a business of milling and investigate working with them and selling to them.  Right now we need to focus on our immediate objective of ensuring that all the AMCOS are organized, registered, and prepared to begin functioning. 

There was a significant discussion of whether farming can be profitable by producing maize with the low price of TZH 330 per kilo.  Some members thought that raising maize would not be profitable at that price.  Some have said that implementing good farming practices with the use of fertilizer and hybrid seed is necessary to increase the yield to be profitable.  It was suggested that sunflower seed would be a more profitable alternative at the current prices.  We may see a larger shift to diversify away from maize during this coming planting season.

Once again there was significant discussion at this meeting but we still had time for two interviews at Pommerini.

Our first interview was with Anna Ngilangwa.  She has been a SACCOS member for five years.  She is married with six children and seven grandchildren. 

Her first loan was for TZH 1,000,000 to purchase seed and fertilizer for her farm of two acres.  She was able to produce 40 bags of maize (A bag weighs 50 Kg.).  She was able to generate a good profit, after repaying her loan of TZH 500,000.  She used some of her profits to send her children to school.  With the rest she bought some small pigs to raise for the market.

 

Our next interview was with Nehemia Magedenge, the Chairman of the SACCOS.  He is married with five children.  Two of his children are in college and three children are in primary school. His oldest child is at the University of Iringa studying Community Development.  His other child is at the University at Mafinga and is studying Electrical Engineering. 

Nehemia farms 10 acres.  He has planted three acres in trees and the other seven acres are planted with maize, beans, green beans, potatoes and tomatoes and some sunflowers.  He raises livestock including dairy cows, goats, pigs and chickens.

Nehemia has clearly been very successful in his business.  The Micro Finance loans have enabled him to purchase more livestock and grow his business income and have enabled him to fund his children’s college education.

I asked him about what he thought would be his biggest challenge as chairman of the SACCOS.  He said that many people are hearing about the success of the SACCOS and he sees a growing number of people who want to join the SACCOS, but with limited capital he wonders how they will fund the loans.  Overall though he anticipates a lot more growth in the coming years.

After finishing our interviews, we are on our to Kitowo

Kitowo

At the start of our meeting in Kitowo we presented our flow charts on the interactions between the SACCOS and the AMCOS.  Again there was much discussion and many questions.

The chairman of the SACCOS stated that there was a problem with the chairman of the AMCOS.  He said that, “He has been vacated.  He is no longer here.”  They will need to elect a new chairman.  At first this seemed like bad news.  However on reflection we realized that this is a good sign!  It shows that our organization is managing itself and our members are willing to take action when action needs to be taken. 

There was a question about whether non-members can participate and buy through the AMCOS.  This is a question that has come up in the past.  We explained that, indeed, non-members can purchase supplies through the AMCOS, but they will not be able to take a loan through the SACCOS and the AMCOS may decide that they will pay a discounted price, but not the low discounted price for supplies that will be available to members of the AMCOS.

Another question was asked about whether a member could take out a loan for supplies if they only have minimum savings.  We responded that the loans from the SACCOS are handled the same way as they were before the creation of the AMCOS.  That is, a member must have one third of the amount of the loan that they would like to take, in savings in the SACCOS.

Another question was asked about how the Joint AMCOS expenses were funded.  We responded that the cost of supplies will be marked up by a percentage sufficient to cover the expenses of the Joint AMCOS.  This is possible because we will receive a price from the supplier that is better than the price that members could obtain otherwise, because we are dealing directly with the suppliers.

There was a lot of good discussion, but we also found time for two interviews at Kitowo. 

Our next interview is with Devotha Msilu.  She is married and has three children.  She has a son who is 12 years old, a daughter who is 6 years old and a son who is one year old. 

Devotha farms one acre of maize.  She has been a member of the SACCOS for six years.

 After finishing interviewing Devotha we were off back to Iringa.  Tomorrow is another long day!

 

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.