7 reasons why Uganda declined to join the Extension of the International Coffee Agreement 2007

A total of 77 Members of the International Coffee Council, meeting in London on 28 September 2007 signed the International Coffee Agreement (ICA) 2007, the seventh Agreement since 1962.

The 2007 Agreement was intended to strengthen the International Coffee Organisation – ICO’s role as a forum for intergovernmental consultations, facilitate international trade through increased transparency and access to relevant information, and promote a sustainable coffee economy for the benefit of all stakeholders and particularly of small-scale farmers in coffee producing countries.   

Uganda, the second leading coffee exporter in Africa after Ethiopia and the seventh leading exporter in the world, joined the ICA 2007 in 2009 with a view of enhancing its interests.

However, on 10 September 2021, the Government of Uganda notified the Depository of the ICA 2007 of its intention not to join the extension of the International Coffee Agreement 2007. The extension of the ICA came into effect on 2 February 2022 and will be in effect until 1 February 2024 to give more time for negotiation of a new agreement.

In a statement issued by the Uganda Coffee Development Authority (UCGA), Uganda has raised key issues that the agreement has not addressed including the following:

i.               Barriers to trade imposed through high tariffs on processed coffee by developed/importing countries which disadvantage producer countries like Uganda resulting in farmers getting low prices.

ii.              Promotion of value addition: Uganda needs unconditional market access that allows for export of value-added coffee not only green coffee. The ICA should have increased focus on value addition with protracted programs that aim at transferring value to the farm gate prices.

iii.            Coffee price volatility which threatens the incomes of farmers and the sustainability of the coffee sector. There is urgent need to address and solve the structural weaknesses of the coffee sector and to ensure its sustainable growth and prosperity for farmers and all stakeholders.

iv.             The lopsided classification of coffee by ICO which only lists Brazilian and Colombian types of coffee and refers to the rest under the category ‘others’.

v.              ICO indicator prices which are used by coffee buyers as a benchmark yet their computation may not have sound statistical basis, thereby disadvantaging especially Robusta coffee producers.

vi.             ICO not focusing on programs that could benefit coffee producing countries but spending over 70% of funds contributed by members on staff emoluments and administrative costs which is increasingly making ICO less valuable to its members.

vii.           Projects to address challenges in coffee producing countries: Since 2012, when the Common Fund for Commodities stopped funding ICO member countries’ projects, member countries have requested for an alternative to aid them to address challenges such as climate change, low production and productivity, pests and diseases and price volatility.

UCDA, however, revealed that Uganda will continue to engage with the International Coffee Organisation (ICO) to negotiate better terms. 

“It is important to note is that the negotiations will have no effect on coffee trade as ICO does not market coffee,” they said in a statement. 

“Furthermore, following the expiry of the extension, Uganda like any other coffee producer, will ratify the new agreement once her interests have been catered for.”