Ambassador Marchal at the opening of the stakeholder conference on Coffee in Mutare

Ambassador Mr Marchal at the opening of the stakeholder conference on Coffee in Mutare.

High level Coffee stakeholder Conference

Mutare, 25 June 2010

Address of Ambassador Xavier Marchal

Head of Delegation of the European Union

This is one of my last formal event, as I am, sadly, ending my assignment as EU Head of mission to Zimbabwe in a few days.

My involvement with this country started five years ago with a serious and comprehensive attempt to engage with Government authorities on how to go about reviving the coffee industry.

The European Commission was here in December 2005 to assess the coffee sector. Our findings at the time were simple, and dramatic: 1) coffee production had declined from 10 000 tons in 2002 to less than 2 500 tons in 2005, mainly due to a land reform that had gone off track, resulting in precious coffee trees being replaced by maize on commercial farms; 2) the Mutare Mill, one of the best in Africa, was already operating at loss as it needed 4 000 tons to be viable; 3) most significant was the fact that the part produced by small coffee growers mainly from the Honde valley was only about 50 tons, or one per cent of the total.

It did not take to be a coffee specialist to understand the following: 1) without vibrant commercial coffee production, small communal coffee growers cannot exist, for technical and economic reasons; 2) this country needs to develop coffee production by small producers for social and political reasons; 3) small communal farmers and large commercial farmers need necessarily to develop and cherish their symbiotic relation, a question of survival for all.

And this was to become the basis of what has been ever since called the “Coffee Initiative”, spearheaded by the European Commission.

Unfortunately, it has unnecessarily failed so far. I will dwell on this in a few moments.

Today the coffee sector is moribund, with 300 tons produced in 2010. A sheer embarrassment, particularly for thousands of communal farmers who want to improve their livelihoods and income, and become part of the prestigious world fraternity of growers of what is called the “black gold”, in partnership with commercial coffee farmers.

But the potential is significant in term of coffee playing a significant role in the Zimbabwe economy and for Zimbabweans: coffee is in increasing demand worldwide; Zimbabwe coffee is of high potential quality; production reached a peak of 15 000 tons back in 1990; thousands of small farmers could rely on it to walk out of poverty; Zimbabwean commercial farmers are certainly among the best in the world and should not be forced out in the way this is being done; coffee can be “teamed up” with other very valuable crops such as macadamia nuts or avocados; and to top all of these, growing conditions are about ideal.

EC involvement to support small holder coffee producers of the Honde valley started back in 1982. Since, never have we abandoned our involvement and support, well know to growers whether communal or commercial. The climax of our support has been the establishment of the coffee Mill in Mutare, especially designed for small holders, a state of the art facility known around the continent.

In the course of the years the STABEX fund contributed with over €7.6 million to the coffee sector. The entire sector benefited from a comprehensive support approach: the Coffee Research Centre, the Zimbabwe Coffee Mill, the Small Scale Growers in Honde Valley and Commercial Growers after the 2002 hurricane “Aileen”.

But more than a natural disaster like “Aileen”, it is the way the land reform launched in 2002 was implemented, which led to a drastic reduction in the surfaces devoted to commercial coffee.

For the reasons I explained a few moments ago, the EC was forced to suspend its assistance in 2006. It was making no sense to support a coffee sector in which commercial coffee trees, each of them essential to communal farmers, were removed and replaced by maize. Needless to say here, this was not about the EC being against the land reform.

But we remained engaged with the aim of bringing back the coffee sector of Zimbabwe where it should be. I became personally and heavily involved and offered a way out, which was constructive and respectful of Zimbabwean sovereignty.

Everyone in Government who has something to do with coffee even distantly knows this.

After months of challenging if not protracted negotiations with the Ministers of Land and of Agriculture of the previous Government, back in 2006, we finally agreed on an exchange of letters as regards the way forward. The idea was simple: the EC offered to fund a high level workshop aimed at identifying what was needed to restore the coffee industry, and would fund the implementation of its recommendations if they would allow that goal to be achieved.

But the exchange of letters was never signed. I still don’t understand why, and I deeply regret this.

However, farmers never give up, and today we are here for a stakeholders conference that they want, and which I sincerely hope will eventually lead to a redress of the coffee industry.

This conference is based on parameters articulated by experts representing small and commercial farmers, which the EC has funded together with Government authorities. They are the following: 1) communication and dialogue amongst all stakeholders; 2) putting in place the right policies; 3) protecting the sustainability of the industry; 4) and securing its viability.

We could have done this back in 2006. It will be more difficult now since the coffee sector has basically disappeared from Zimbabwe.

Unless there is immediate intervention with a sustainable business plan, Zimbabwe will no longer be able to produce fine Arabica Coffee. But with good immediate political will and serious technical foundations, it is not an impossible goal to reverse this trend.

I am leaving Zimbabwe shortly. But this is not about me, or even about the EC. It is about Zimbabwe as a nation deciding if she wants a coffee industry, and if this is the case, taking action to make that happen.

Zimbabwe has a milling capacity to handle 50 000 tonnes of green coffee annually and has facilities including Zimbabwe Coffee Mill Limited, the Grain Marketing Board and at least ten Export Processing Zones which are now running far below their viable thresholds.

As I said, consultants have been hired to work closely with key stakeholders to understand the challenges being faced by the industry.  They worked to formulate a sustainable business model for the stabilization, recovery and growth of the Zimbabwe Coffee Industry.

If the industry is allowed to stabilize and to become self sustaining, there will be tremendous opportunities for growth by attracting and promoting new entrants to the Coffee Industry, which will in turn play a positive role in improving the living standards of vulnerable communities, creating employment and improving the Gross Domestic Product of Zimbabwe which will have knock on effects on the national economy.

This conference should encourage open debate to enable the conclusion of the proposed sustainable business plan for the rebuilding of the Zimbabwe Coffee Industry.

But what needs to be done is not purely technical. Political decisions need to be taken without which any attempt of revival of the coffee industry will fail. I call on the Zimbabwean Government to take those right decisions.

The recent eviction of the very consultant contracted to represent the commercial constituency in the symbiotic relationship I mentioned earlier, is very problematic in my view. Beyond legal issues which are being put forward, the Government needs to decide what it wants, act politically, and appreciate the need for compromise.

In the end, the overall community of actual and potential small and commercial coffee growers and stakeholders must clearly indicate that there is room in this country for a vibrant coffee industry for the benefit of all and of Zimbabwe.

Most importantly, I would like to highlight the significance of the presence of Deputy Prime Minister Khupe, as well as of Minister Ncube who is in charge of the coffee industry. Their participation is testimony of a strong Government commitment to resuscitate the coffee industry.

I hope that a positive way forward can be agreed at this conference. I do want to believe that this is a new beginning, and not the end of a lost cause.

Thank you.