Inclusive Business Scan: members’ perception on coffee cooperative Kawa Kanzururu

Inclusive Business Scan: members’ perception on coffee cooperative Kawa Kanzururu

25/09/2018
Merveille Saliboko
Merveille Saliboko
Journalist in Congo

On the slopes of the Ruwenzori Mountains, bordering the Virunga National Park in the eastern Democratic Republic of Congo, small family farms grow Arabica coffee of superior quality. Many coffee growers in the region are members of the Kawa Kanzururu cooperative (COOKKANZ). 875 members now collectively sell their quality coffee through this cooperative to several companies in the international speciality coffee market. The cooperative is built around coffee processing centres, called micro-washing stations, each one serving between 50 and 100 coffee growers.

In November 2017, Rikolto in DR Congo used the Inclusive Business Scan to collect stories from members of the Kawa Kanzururu Arabica coffee cooperative. The aim was to understand what the members think about having access to the coffee micro-washing station, about the relationship between members, micro-washing station and the cooperative. This will help pave the way for the Kawa Kanzururu cooperative being able to operate independently without Rikolto’s support.

Download the full Inclusive Business Scan report

Rafiki Ise Kalulu works for Rikolto in the DRC and is in charge of providing local support to the Kawa Kanzururu cooperative. We interviewed him to learn more about the findings and how the data have been used…

How does the Inclusive Business Scan differ from other survey methods?

The Inclusive Business Scan is a tool powered by SenseMaker to collect experiences on inclusive business principles within supply chains. SenseMaker is an innovative approach based on large numbers of micro-narratives, interpreted directly by the narrators themselves. In each survey, farmers share their own experience and the associated feelings, whether they be joy, sadness, frustration or satisfaction. The meaning to be attributed to a given experience comes from the respondent, without any prior assumptions on the part of the interviewer that might bias the results.

With regard to the findings, the coffee grower members’ perception is that the cooperative leadership is interventionist…

The challenge is to get the members of the Kawa Kanzururu cooperative (COOKKANZ) involved in the management of the cooperative by providing real-time information. The recommended solution is that each member of the Board of Directors should give detailed feedback to the micro-washing station (MWS) he or she represents. A framework for feedback and grassroots’ consultation is currently being developed.

The second challenge relates to the benefits of cooperative membership. We realised that these benefits are not clearly explained to the members. Some of them don’t even know how much they get out of membership of the cooperative compared with non-members. We feel there is a need to document clearly what the members gain through membership, and the Board of Directors will have to explain it clearly to the members. This will really strengthen the sensitisation messages.

And what about the commercial management of the cooperative?

More than half of the respondents believe that the quantity of coffee berries delivered to the MWS is influenced by prices that are high compared with those of competitors. Despite this, we’re working on setting up a mechanism to ensure that prices are kept stable and higher in relation to competitors’ prices. This will require negotiation with buyers in order to sign contracts with a guaranteed minimum price before coffee berries are picked and delivered, thus avoiding exposure to price volatility on the New York Stock Exchange.

Another important point is that some members commit coffee berries early to fraudulent buyers to pay for living expenses.

Yes, they take cash advances and then when the season starts, they don’t have enough berries to deliver to the cooperative. The measure proposed by the cooperative is to negotiate with organisations such as schools and health-care facilities to provide services to the members and accept deferred payment until the berries are ripe. The cooperative will thus act as a moral guarantor.

And what about the delivery of berries on credit?

We are in the process of implementing a policy to encourage members to deliver their berries to the cooperative on credit. With this in mind, the Board of Directors is planning to set an interest rate that will be offered to all members who agree to do this. The current situation is that 10% of the respondents are already requesting to be paid only at the end of the season in order to accumulate more savings.

Let’s talk about member shares now…

Oh yes! That’s another challenge. 14% of the respondents think that member shares are inappropriate. Why do they have this perception? How do we change things? We are considering working with the cooperative to devise a message aimed at raising member awareness. This message will explain to them the purpose of their member shares and the individual benefits they gain from them.

What do members think about the services provided?

Another challenge! 19% of the respondents don’t know how all that is managed. To remedy the situation, we’re going to revisit the remuneration system for MWS staff members, one that will benefit the cooperative and provide an employee incentive. This system will need to be standardised across all the MWSs.

We get the feeling there are problems communicating with the members…

The system for informing members about the various buyer contracts really needs to be improved. Ditto for the different coffee quality scores and the awards won. We believe there is an urgent need to get the micro-washing station evaluation system up and running based on different performance criteria, and reward those micro-washing stations that obtain a good rating. This must be clearly reported in the cooperative’s in-house newsletter.

Talking about the in-house newsletter, what role should it play?

It’s right at the heart of internal communications. It provides information about how the cooperative works, the various bodies involved, links with partners such as Rikolto, lending institutions, sales contracts, quality scores, quantities produced – in short, everything the members need has to go through Taarifa ya Kawa Kanzururu.

The directors and managers of COOKKANZ are committed to ensuring that the cooperative’s in-house newsletter is regularly published and displayed on the wall of the micro-washing station each month. If necessary, it is read aloud to anyone who can’t read. The Board of Directors has pledged to ensure there is proper follow-up.

And, ultimately, the newsletter should encourage the members to appreciate their membership more and to deliver all their coffee to their cooperative…

Indeed, we’d like to convey that clearly in the sensitisation messages and talk to members about the cooperative’s break-even point, which also depends on quantity.

The cooperative’s by-laws provide for the sharing of 40% of the profit in the form of member dividends, in proportion to the quantities of coffee delivered. We must therefore better explain to members that the more they make efforts to increase the volume of superior quality coffee, the sooner they will exceed this break-even point, the sooner they will have access to a dividend. This will encourage them to convince other producers to join the cooperative as well to bring their cherries and increase the volume in order to allow the cooperative to make a profit more quickly and members to benefit from a dividend more quickly.

And what has Rikolto been doing to tackle all these challenges?

We are working on training the cooperative’s directors and managers to turn these challenges into opportunities so as to achieve the objective we have set ourselves: to ensure that the Kawa Kanzururu cooperative can operate independently without our support.