Mabale Growers' Tea Factory Ltd.

About the Tea Factory

Location:Kyenjojo District, Western Uganda
Established:
1994
Fairtrade Certified:1999
Members/shareholders1,000
Total registered tea suppliers
2,240 (1,573 actively supplying tea)
Total production of made tea:2,600 tonnes (2006)
Percentage exports:95%
Fairtrade sales:52.5 tonnes - 2% of total (2006)
Total area under tea (estates and farms):2,517 hectares
Average farm size:3.3ha of which 1.5ha under tea
Harvest:Year-round































Introduction


Mabale Growers’ Tea Factory is located at an altitude of around 1,500 metres on the lower slopes of the Rwenzori Mountains near Fort Portal in the west of Uganda, the country’s main tea growing area.

The factory is a farmer-owned enterprise comprising a tea processing factory, Nyamasoga and Mparo tea estates, and a eucalyptus plantation that provides fuel for the factory furnace. Its origins go back to the 1960s when it was built and operated by the state to support small-scale tea growers by providing processing facilities. Like many tea estates and farms, Mabale was abandoned during the chaos of the Amin regime (see Background, page 7). In the 1990s the factory was renovated and the tea estates rehabilitated under a government scheme to boost rural incomes. This included transferring ownership to the small-scale tea growers who sell their freshly plucked ‘green leaf’ tea to the factory.

Mabale works closely with its sister organisation Mpanga Growers’ Tea Factory, which has a similar set up (see Mpanga profile). The two factories compete with 11 private tea estates in the area that grow tea as well as buying in green leaf from local growers.

Apart from the tea estates and some small businesses in Fort Portal, the main town in the area, there are few local employment opportunities and, like much of Uganda, the area is almost totally reliant on agriculture. Most of the population are subsistence farmers who have sufficient land to provide food for their families, perhaps selling any surplus to local markets or traders, but without income from a main cash crop with which to purchase goods and services over and above their basic needs. Few of the scattered villages have electricity, water is supplied from wells or pumps, and most people do not even have access to a bicycle.

Mabale Growers' Tea Factory


The factory buys in freshly picked green leaf from more than 1,500 registered small- and medium-scale tea growers, a thousand of whom are shareholders in the factory. The green leaf is processed into eleven grades of made (processed) tea using the Crush Tear & Curl (CTC) method preferred for fine-grade mass market teas used in quick-brewing tea bags. Eighty percent of the teas are primary grades with Broken Pekoe, Pekoe Fannings and Pekoe Dust making up the bulk. The tea is packed and trucked to Mombasa auction in Kenya where it is bought by international buyers for export.

The factory plays an important local economic role by providing small- and medium-scale tea growers from a large surrounding area with a dependable buyer for their crop which it also processes and markets via auction and private buyers. The furthest collection centre is 90km from the factory, beyond the range of the private estates, so providing a vital service to these tea farmers. Registered suppliers sign a contract which includes receiving a minimum price of 200 Ugandan Shillings (USh) a kilo (in 2007) plus a second payment of an additional 25%-30%, depending on average auction prices. This is slightly higher than the current price (USh180-200 a kilo in 2007) paid by private factories, which is cut when auction prices fall. So the guarantee of a stable minimum price, long-term relationships and contracts to buy all leaf of the prescribed quality are highly valued by the farmers who supply Mabale.

The factory management is investing in improving the efficiency of the factory and its operations in order to improve the quality of its tea. A modern production line has been installed to increase capacity and field extension officers are employed to give farmers technical and business advice. The investment in resources helps to improve quality and maximise the prices fetched at Mombasa auction which enables the factory to increase payments to farmers. The enterprise is providing an opportunity for a growing number of forward-looking farmers to increase their income and improve their family’s livelihood through growing tea. With this extra income comes the potential for smallholders to expand production or diversify into other cash crops such as avocados.

Fairtrade and Mabale


Mabale became Fairtrade certified in 1997. Fairtrade sales stood at 52.5 tonnes in 2006, accounting for just 2% of total sales, with the figure expected to fall to 1.6% (42 tonnes) in 2007. But the Fairtrade premium is making a valuable contribution to the factory, its members and the wider community. The premium is an additional payment included in each Fairtrade sale that is reserved for business and community development projects. It is directly administered by the Joint Body (JB), a 13-strong premium committee that consults with shareholders and workers on premium projects and is then responsible for managing those projects. The JB is made up of elected representatives of farmer members and estate and factory employees (five of whom are women), a trade union representative, plus a management representative and two board members whose roles are to give financial guidance, administrative support and technical advice, with a broader remit to support the elected members in gaining the skills to effectively manage the premium fund.

Silver Kasoro-Atwoki is one of the local tea farmers and businessmen who are the driving force behind the Mabale enterprise, using their experience and know-how to build up the organisation’s operational and commercial capacity.

In addition to his work as member of the Mabale board and chairman of the Joint Body, Silver joined the board of the Fairtrade Foundation in July 2006 where he is able to bring the perspective of African producers to the Foundation’s discussions and planning processes. Silver is also an advocate for African producers in the wider Fairtrade movement as a member of the Africa Fairtrade Network, one of three regional networks of producer organisations which in May 2007 became co-owners of FLO, the international Fairtrade umbrella organisation, where they can contribute to decision making processes at the General Assembly.

‘Thanks to Fairtrade, we have changed our agricultural techniques which have improved the quality and quantity of our teas. We have opened new access roads to benefit all in the community, assisted in providing primary health care through construction of health units and added a new block to a local secondary school. Fairtrade is significantly contributing towards the social improvement of our community and providing a better future for our youngsters.’

Fairtrade Premium projects


Construction of leaf collection sheds

It is essential that freshly picked green leaf tea reaches the tea factory in good condition within a few hours of being picked. Thirty-nine roadside leaf collection sheds have now been built or renovated so that farmers can store their green leaf in cool, dry conditions, whatever the weather. Registered growers carry their sacks of green leaf to the sheds to await collection by the factory’s trucks. The sacks are emptied in piles so that the leaf inspector can quickly check the leaf is of the right quality. Sturdily constructed, these sheds have concrete floors so that the leaf stays dry and free from mud during wet weather, and corrugated tin roofs to give protection from heavy rains and strong sun. The sheds are often used by local people as impromptu meeting places and at several sites the premium committee has also built or improved pit toilets for the benefit of the community. By comparison, the sheds owned by privately-owned estates that also buy in green leaf from smallholders are often recognisable from the dilapidated condition of their dirt floor and thatch roof construction.

Road construction

The premium has been used to fund the construction or improvement of a total of 100km of community roads, mainly feeder roads connecting farms to the local roads that join the main highway. The premium pays for the equipment and materials while local people join together to provide the labour. The work is arduous – existing tracks or paths have to be levelled and widened then covered with a thick layer of earth which is compacted by hand to provide a hard surface. Because of the inevitable pot holes and other damage caused by a combination of heavy rains and strong sun the roads need regular repair and maintenance. In many cases building leaf collection sheds has also meant constructing or improving access roads to supplier tea farms so that factory trucks can reach them. This of course benefits the wider community by helping all farmers get their produce to market and making local travel easier for everyone.

Clean water

The tea farms are located in very rural areas with poor infrastructure. Less than 1% of homes have electricity or running water. Most people get their water from shallow wells, springs or bore holes but less than 50% have easy access to safe, clean water. The factory is prioritising the provision of safe water in the community through the construction of shallow wells and providing water sources with concrete covers to protect them from contamination. Shallow wells, around 30 metres deep, have been dug to provide water on the camps where the estate workers live. Three were completed in 2007 with three more to follow.

Healthcare

In partnership with the government, the farmers have constructed a healthcare unit with dispensary at the factory. The factory pays the salaries of a clinical officer, midwife, two nurses and support staff while the government supports procurement of drugs and medicines and supplies free vaccines. A clinic has also been built to serve the community outside the factory, which treats outpatients, provides antenatal care and immunisation as well as HIV testing and counselling.

Field extension

A field extension manager and six extension officers are employed to provide technical services and training to smallholders to increase productivity by, for example, improving plucking techniques. The staff training for this project was provided by the Cafédirect Producer Support programme.

Education

The Joint Body works closely with the communities in which their members live. When local people identify a project such as building classrooms they can apply to the committee for a budget.

In 2006/07 the premium was used to part-fund, with parents, the school and government, the completion of an unfinished government project for Buhemba Secondary School. This included the construction of a new block with an office and two classrooms plus staff quarters for four teachers. A hundred children will benefit from the new facilities but they, and those at the adjacent primary school, still have to make do without electricity and collect water from a protected spring. Two other state schools have been supported with improvements to toilet facilities and ongoing budget assistance for basic repairs and maintenance.

Factory facilities

The benefits of Fairtrade are also extended to the tea factory employees. In 2006/07 the premium has part-funded a new workers’ block with toilets, locker rooms, a rest room, kitchen and canteen where employees can relax and eat.

Herbert Babinyaga, tea grower


Herbert Babinyaga, 42, is a tea farmer and one of the 1,000 shareholders in the Mabale Tea Growers’ Factory.  He and his wife Primi Kahwa, 30, care for their four children under 9 as well as Herbert’s three children between 9 and 20 from a previous marriage.  The older children are all in full-time education, including 16-year-old Doreen Kiiza at secondary school and 20-year-old Miriam Nyakata who is studying to be a nursery teacher at Kampala YWCA College.

With much hard work and enterprise Herbert has been able to expand his business interests to provide for his family and keep his children in education. He owns a total of nearly 15 hectares which he inherited from his father Stanley, now 86. It includes a eucalyptus plantation that supplies all his firewood and timber needs, but most of the land has not yet been cleared and planted. Half of his income comes from his two-hectare tea farm where he works for four or five days a week from 8am to 5pm, with an hour for lunch, employing a supervisor and seven workers to help him. Near to his house Herbert has planted a two and a half hectare banana plantation, grows coffee, and keeps 30 dairy cows to sell their milk. On top of all this, Herbert works most afternoons as a self-employed portrait photographer. 

An important aspect of being a shareholder in the factory is the technical advice from the field extension officers employed by the factory. With the help of their expertise, Herbert is planning to extend his tea farm, improve quality, and increase his income.

Herbert is part of a group of 32 farmers who supply tea to Mabale tea factory and provide labour for premium projects such as constructing roads and collection sheds. This was exemplified by the major project they undertook in 2006 to open up a 6km road to connect Tubwemara and Kihoiga villages to Mabale. The old road ended at a swamp so a big detour was needed to access the villages. The farmers organised villagers to help dig drainage for the swamp, clear bush and bridge the river under the guidance of a builder hired by the premium committee. As the factory trucks could now drive straight up to the villages they also built a leaf collection shed, meaning farmers no longer had to make the arduous uphill 3km walk to the old one. 

The Fairtrade premium is used to benefit the whole community, as Herbert explains:

‘The Fairtrade premium helps pay for field extension officers who have given us advice on how to maintain the tea. This has improved the quality and we have also improved productivity. Fairtrade is good for the farmers as we have used the Fairtrade premium to build leaf collection sheds and improve roads and secondary schools. We cleared bush and drained a swamp to open a road so lorries can now come to the new collection shed and it is a shortcut for all villagers. Before, farmers had to carry their bananas, cassava, coffee and maize for up to 3km to get it to market.

For the road and collection shed, the Fairtrade premium paid for a builder and provided the materials - poles, roofing sheets and cement - and we villagers provided the labour. The new leaf collection shed is a big improvement - its tin roof and concrete floor means the tea stays clean. Before, the tea was kept in a shed with a grass roof and mud floor so heavy rain could get in and ruin our tea. The Fairtrade premium has done a good job. It paid for a clinic which helps us get drugs for first aid. We want to improve the clinic by hiring a doctor or trained medical assistant but to do this we need to sell more tea to Fairtrade.’ 


Nyamasoga Tea Estate


The Nyamasoga Tea Estate covers some 46.6 hectares (115 acres). The tea areas have been completely rehabilitated and in-filled using high quality Kenya clonal tea plants, with an additional 6 hectares (15 acres) of new planting.

The estate employs 47 pluckers, including two women, and 28 weeders and sprayers, all men. Pluckers work an eight-hour day, starting at seven or eight in the morning, depending on the time of year. They are the most skilful as well as the highest paid workers, with a plucking target of 40 kilos a day after which they receive a bonus for each additional kilo. Weeders work a shorter five-hour day to allow for the strenuous nature of the work.

Around 30 of the workers live in shared rooms at the estate labour camp where they are provided with clean water and hygienic latrines. The other employees live on their small subsistence farms in nearby villages. They tend to be less reliable and more frequently absent from work. This is partly because they have to give priority to work on their own farms at certain times of the year but a lot of absence is caused by the prevalence of malaria as a result of mosquitoes breeding in stagnant water in some villages.

Louis Akampurira, 26, is single and lives in the camp.  He works as a head man, a supervisor whose job is to control the quality of the tea by ensuring that only the new flush of fresh green leaf is picked by his team of 24 pluckers.  Louis is enthusiastic about the positive benefits of Fairtrade: ‘The premium is making life better in many ways, such as providing clean water and latrines at the camp and maintaining the roads in good condition. I support it very much. The clinic is good for first aid and we want to improve it by employing trained people like a midwife.’

 
Susan Amina, 30, has worked as a tea plucker at the estate for two years, having previously worked on other tea estates in the area. She lives at the workers’ camp with her three children aged 3 months to 6 years. ‘I came here because Mabale is a better company. The camp is good, we have clean water and toilets. At other estates they don’t care about the workers and allow the level of the tea to grow too high so the leaf is hard to pluck.’ 

Background to Mabale Growers' Tea Factory


In the early 1970s Uganda was second only to Kenya in African tea production. But production declined catastrophically between 1971 and 1986 when many farms, estates and factories were abandoned and looted during the chaos of the Amin years and the guerrilla war that followed, with the tea bushes, normally pruned to waist-level for picking, left to grow up to 30 feet high.  As well as private estates, the casualties included Mabale and three other tea factories in western Uganda that the government had built and operated in the 1960s to support small-scale tea growers by providing processing facilities.

In 1989 the EU funded a 10-year tea rehabilitation project which was complemented by a Ugandan Government Smallholder Tea Programme from1995 to 2001 The schemes aimed to contribute to the revival of the tea industry, particularly the smallholder sector, in order to improve rural incomes by giving subsistence farmers the opportunity to grow and sell tea as a cash crop. Mabale and neighbouring sister organisation Mpanga Growers Tea Factory benefited from the schemes through the renovation of their tea processing factories and facilities and rehabilitation of their tea estates.

Privatisation of the state-owned factories was fundamental to the government programme. In 1994 the ownership Mabale was transferred to an association formed by the smallholders who supplied green leaf to the factory. They gradually bought shares by means of a small deduction from every sale of green leaf to the factory. Eighty percent of the factory’s shareholders are small-scale subsistence farmers with less than two hectares who also supply the factory with their freshly picked green leaf tea. Their farms are located up to 90km from the factory and they depend on tea for at least 50%-60% of their cash income.

In 1996/97, Mabale purchased and rehabilitated the previously abandoned Nyamasoga and Mparo tea plantations, which now employ 45 permanent and 73 temporary workers. They provide a fall-back position if supplies from smallholders fall significantly and are also used as demonstration fields to train supplier farmers in good agricultural practice.

In 1997 the fledgling business joined forces with Mpanga to set up an expert management company to run the two operations, with a brief to improve quality and increase processing capacity. Over time, the Mabale shareholders acquired the commercial and technical expertise to appoint their own board which took over management in 2002. A big investment was made in 2004 to install a new production line that was vital for the factory to keep up with the increasing quality requirements and production volume necessary to make the operation economically viable.

Mabale factory now employs 101 permanent and 107 temporary workers. It processes more than 2,600 tonnes of tea each year and competes with 11 privately-owned tea factories in the area to buy in green leaf from local growers. April to June and September to December are the peak plucking seasons when the optimum rainfall encourages abundant leaf growth and plucking is carried out every day.

Fairtrade Foundation 2008

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