On 31st August 2021, the President of the Republic of Uganda assented to the National Coffee Act (the NCA), 2021. The 2018 National Coffee Bill from which the Act arose had been passed a year earlier by Parliamentary sitting on Wednesday 5th August 2020. The new law repealed and replaced the 29-year old Uganda Coffee Development Authority Act, Chapter 325. The NCA is an Act intended to continue in existence of the Uganda Coffee Development Authority (UCDA), to provide for the Uganda Coffee Development Authority, promote and oversee the coffee subsector, to provide for the authority to regulate all on farm and off farm activities in the coffee value chain, to provide for a coffee auction system and for other related matters. Key among the regulatory developments introduced by the Coffee Act:
Registration of coffee farmers
The Authority shall establish and maintain a national register of coffee farmers and all who have an intention to grow coffee.
Registration and licensing of coffee chain actors
The Authority shall register and maintain the following registers; a pulpery operator’s register; coffee buyer’s register; coffee grading register; coffee processor’s register; coffee exporters register; brewer’s register; coffee store or ware house operator’s register; coffee huller operator’s register and a coffee extractor’s register. Every person or company registered above shall be issued with a licence, upon payment of prescribed fees and under section 35 of the Act, a person shall not operate any coffee related business without a license.
Warehousing and Coffee exports
Section 54 of the Act provides that a company that intends to warehouse coffee for export shall sign a memorandum of understanding with the authority. A company with a memorandum of understanding to warehouse coffee for export which warehouses coffee not cleared for export by the authority or tampers with coffee cleared by the authority for export shall have its license cancelled and the coffee confiscated and forfeited to the state.
Coffee quality control
The Authority shall under section 58, determine and regulate the types and varieties of coffee to be grown in the different parts of Uganda. The Authority under section 40 of the Act, shall in collaboration with the body responsible for standards develop coffee standards. The Authority shall grade and certify all coffee grown or marketed in Uganda.
Offences
Section 53 lists a number of offenses and penalties under the coffee value chain. Prominent among them are; operating an unregistered nursery or coffee seed garden; selling or distributing substandard or diseased planting materials; harvesting immature cherries; poorly storing cherries or heaps of coffee leading to mold formation; drying coffee on bare ground; processing coffee without a valid licence; as well as dealing in coffee for internal marketing without a licence; among many others.
Under section 56, where an offence specified under the act is committed by a body corporate, every director and employee of that body corporate shall also be taken to have committed that offence and where the body corporate is a firm, a partner of that firm shall also be taken to have committed that offence unless he or she proves that the offence was committed without his or her knowledge, or that he or she exercised due diligence to prevent the commission of the offence.
Why is the enactment of the new regulations contentious?
a) Whereas Parliament rejected other unfortunate clauses in the Bill which gave UCDA authority to de-register farmers and have them imprisoned for failure to meet certain standards or maintain their farms, the Act still gives UCDA so much power over the coffee sector. For example, the mandatory registration of everyone involved in the sector without specifying the qualifications for such registration leaves room for abuse of small farmers.
b) Section 53 of the Act is manifestly unconstitutional since it attempts to do away with the hallmark of our criminal justice system; presumption of innocence. By finding officers of a company guilty until they prove their innocence, UCDA has been given sweeping powers of a complainant, witness, prosecutor and judge in their own case. This is bad for business.
c) The Act is centered around what farmers should or shouldn’t do, with government lifting no finger to help them with interventions such as market sourcing and other incentives. As such, only those with capacity to grow coffee on a large scale will survive.
In conclusion, what the coffee farmers need most are incentives. They need a rebirth of cooperative unions, not new laws. Cooperative unions were crucial in the early 1990’s for spearheading quality interventions amongst the farmers in order to take advantage of the international market. Farmers spoke with one voice and determined their own prices. It is hoped that the Coffee Act may not stifle growth but help the farmers to thrive.
By Julius Caesar Rugaya
