Farmers in Ntuntu ward of Singida rural district, central Tanzania have joined hands to form a cooperative and edge out middlemen who connive to keep sunflower and millet prices low.
The 3,000 member Agricultural Marketing Cooperative Society (AMCOS) is now preparing to buy sunflower and millet produce at three times the price that middlemen have been offering to them.
Using the membership fee of Tshs 2,000 and share price of Tshs 50,000 each from 69 members who have already paid up for AMCOS membership, the cooperative members have opened a bank account and secured a Tshs 150 million loan from the government-ran National Micro-finance Bank (NMB).
“Farmers take the produce to a local warehouse and they are issued with a receipt for their produce pending full payment,” Willberd Kimario, an ActionAid staff facilitating the farmers says.
The local government has already supported rehabilitation of warehouses at Ntuntu and Ntewa wards for this project.
The warehouses were built by the Community Development Trust Fund during the era of Mwalimu Nyerere when there was a strong cooperative movement.
“The government guarantees the loan from the Bank against the stock in the warehouse and farmers are paid 60 percent of the agreed price on delivery while the rest is paid after the produce has been sold”, Willberd explains.
Singida is the highest producers of sunflower and millet in Tanzania. Ntuntu ward alone produced 1,950 tonnes of sunflower and 835 tonnes of finger millet last year in 2009.
But middlemen took most of the profits leaving farmers with barely enough to keep them going.
50-years old Teresia Paulo is among the farmers in the ward that have endured the back-breaking labour only to enrich middlemen.
“When the produce was still in the farm, the middlemen came and gave me an advance of Tshs 8,000 for a 70kg bag of sunflower”, she says.
“When I harvested the produce, I pleaded with them to increase the price but only stopped at Tshs 10,000”.
“Since all my four children had been chased from school and were waiting for money to return to school, I ended up selling all the 30 bags of sunflower at Tshs 10,000 per 70kg and all five millet bags at Tshs 12,000 per 100kg”
Teresia who is only one of the many farmers says the cooperative could not have come at a better time.
AMCOS treasurer, Petro Nkii says the co-operative has already established the buying price of Tshs 21,000 for the 70kg-sunflower bag and Tshs 45,000 for the 100Kg-millet bag.
This is about three times the price the middlemen offered to farmers.
“When prices increase, we will increase the amount of money we pay to farmers but when it reduces, we will take it to private firms in Singida town and extract oil from the seeds so we get maximum value of our produce” , Petro says.
This is one of the 12 co-operatives that ActionAid has supported the farmers to register in Singida rural district.
“We are aiming at helping farmers register cooperatives in each of the 28 wards of Singida Rural district by December this year (2009)”, Willberd Kimario says.
AMCOS treasurer says they plan to unite with other cooperatives in the district to establish their own plant for extracting oil from sunflower seeds.
Sunflower husks fetch higher prices than oil at Tshs 300 to Tshs 500 per kg in Tanzania. They are used to make animal feeds for chicken, cattle, pigs and also camels in Saudi Arabia where they are exported.
ActionAid begun working with farmers and local government to mobilise people to form and join cooperatives after a baseline survey revealed exploitation by middlemen as the key contributor to poverty in the area.
The organisation supports awareness on cooperatives, training leadership on management, cooperative law, warehouse receipt system and financial management.