During the Chocoa trade fair, we spoke with Gerald Bagonza from the Bwamba Cooperative Union (BCU) in Uganda about the challenges, successes and ambitions of this young cocoa producers’ union.
Could you introduce the Bwamba Cooperative Union and describe the unique characteristics of your region?
Bwamba Cooperative Union is a member-based organisation of cocoa farmers created in 2021. We are located in the Bundibugyo district, within the Rwenzori Mountains. Thanks to its very fertile soils and favourable climatic conditions, this area is Uganda’s leading cocoa-producing region, accounting for over 70% of national production. According to historians, the first cocoa tree in Uganda was even planted here during the colonial period.
You are quite a young cooperative union. What was the main catalyst for farmers to move away from informal groups or individual sales and to form this new union?
Bwamba Cooperative Union is young at union level, but it is a union of primary cooperatives that are much older. Some member cooperatives have existed for over 10 years, others for more than 20.
The union was created mainly because of the challenges faced by cocoa producers in Bundibugyo, such as price fluctuations and lack of sustainable markets. When we went to the field, we found many traders in the region looking for cocoa, and we observed that the higher the volume, the higher the price and the bargaining power.
Farmers had already begun forming small groups to bulk cocoa and sell at better prices, but these groups were informal and not legally recognised. We supported them in registering as cooperatives, provided training on cooperative principles, and later brought them together under a union structure to strengthen their bargaining power.
What is the price difference farmers can get as BCU members?
Farmers selling through cooperatives can earn around $0.20 more per kilogram compared with selling individually. Over time, this difference represents a significant additional income.
We brought cooperatives together to increase their bargaining power with buyers. Secondly, we wanted farmers to be able to advocate for themselves. Our government prefers to support organised groups; if you are not organised, you may not receive services.
Being in cooperatives also makes it easier to provide training and education. It is difficult to visit each individual household, but in groups it becomes more efficient and farmers can also learn from each other. Another reason for creating the union was to provide warehousing. Some farmers can bulk their cocoa, but lack storage facilities; as a union we can store cocoa while waiting for buyers.
Are there other services you provide to producers?
We support farmers by linking them to buyers and financial institutions such as banks and microfinance organisations. We also provide training in good agronomic practices, climate-smart agriculture, financial literacy, and cooperative governance.
And on traceability, for example?
Traceability is still relatively new for us and largely driven by recent regulations. We are still developing our systems and would welcome support from partners such as Enabel.
How many tons do you export to the Belgian company Silva Cacao?
Silva Cacao has been our main international buyer since 2021, but they currently purchase only a small share of our production, mainly well-fermented specialty cocoa – about one container per year. Our members produce about 720 metric tonnes annually, so most of our cocoa is still sold on the local market.
What prevents you from developing other export channels?
One of the main challenges is limited financial capacity to buy cocoa for export. We do not have a revolving fund, and payments from buyers often come after delivery. As a result, farmers tend to sell to traders who pay cash immediately. Our partnership with Silva Cacao has worked well because it provides pre-financing, allowing us to source cocoa from farmers.
Are you in contact with banks or institutions that could provide revolving funds?
We have approached local commercial banks, but interest rates are high and collateral requirements are difficult for a cooperative like ours to meet. With current high cocoa prices, assembling even one container requires substantial capital. Grace periods are also very short and do not match the cocoa business cycle.
Why was it important for BCU to focus on financial management and risk analysis in the upcoming TDC coaching programme ?
Finance is one of our main challenges. Training in financial management will make us stronger. For example, if we obtain a loan and have done proper risk analysis and have mitigation strategies in place, we will be better able to manage that loan or any grant.
With a good financial management system, reporting becomes easier, and some banks even require evidence of solid financial systems. We chose these modules because we are looking to source finance and we see this as the beginning of that journey.
How do you expect this coaching to improve the transparency and inclusivity of your governance?
A stronger financial management system improves transparency and clarifies roles between the board, management and staff. This reduces the risk of unilateral decisions and improves accountability.
We have seen many private buyers leaving the market recently. How will strengthening financial data management with TDC/Enabel help you build a more resilient and stable governance in this context?
It is true that some buyers have exited because of soaring prices. For example, a buyer with working capital of 100,000 dollars can buy more when prices are low and less when prices are high. When prices rise too much, they may stop doing business, but their operational costs remain the same.
For us, one advantage is that our members produce the cocoa themselves on their farms. We are not traders buying from unknown sources. We only need to streamline our finances so that farmers can sell more easily and at better conditions.
Sometimes farmers sell under pressure because they urgently need money. In Bundibugyo, about 80% of cocoa farmers rely almost entirely on cocoa: for food, school fees, health expenses, housing, even security. When prices are low or when markets fail, they are badly affected, and when prices are high, they are happy. Some farmers even rent out their gardens just to get cash.
If we can streamline the financial system and provide better options, farmers will not need to hire out their gardens and will be able to earn more from their own farms.
There are many women among your farmers, around 53% I guess. What specific role do women play in the cocoa sector in Uganda?
Over time, the government of Uganda has promoted equal rights and the empowerment of women. Culturally, women were often in a weaker position, but we have realised they play a major role in the cocoa value chain.
In many cases, most of the farm work is done by women, especially during post-harvest. The land may be owned by the man, who sometimes has three gardens and two wives, assigning a garden to each. Men often stay at home, as they consider they have already “given” the asset, while women carry out the operational work.
Women implement good agronomic and climate-smart practices, harvest the cocoa, manage fermentation, drying, packaging and even selling. They are often the ones bringing money home and buying food while men sit. That is why many women join farmer groups: they are responsible for their cocoa plantations. Many men work elsewhere in offices or other professions and end up leaving garden work to women. Women therefore contribute enormously to cocoa production.
Do women sit on BCU’s board?
Yes. About one third of board members are women. On some subcommittees, such as the supervisory committee overseeing all cooperative activities, around two-thirds of members are women.
You previously negotiated a direct marketing agreement with Olam Uganda. Is that correct?
Yes. We have worked with Olam for a long time, but it is purely local trade, without a formal long-term contract. They buy from us, then export, but our recognition as a producer cooperative is not visible in that chain. The prices are not as good, but we sometimes sell to them because we have no other option at that moment.
Since you mentioned the lack of visibility and the fact that prices are not always ideal with Olam, is this where your partnership with Silva Cacao makes a difference? Do they offer better prices?
Yes, Silva Cacao offers a better price and, crucially, provides pre-financing. That combination is very attractive. However, we also need to look for other market opportunities and not depend on a single buyer. We need a diversity of markets.
We have many contacts from buyers interested in cocoa, but their terms and conditions differ. Some want FOB at the port, others want to pay only at destination, which carries risks. Recently some companies have been scammed by fake buyers, so we must be cautious.
Ugandan cocoa is quite specific for European chocolate makers here at Chocoa. How would you describe the characteristics of your cocoa and the story behind it?
In terms of characteristics, Ugandan cocoa, and specifically Bwamba cocoa, is unique with specific organoleptic qualities. It is a fine-flavour cocoa, produced organically.
Do you have certification?
Yes, we are organically certified. We obtained organic certification before the new EU organic regulation came into force, and we are now working to align with the updated EU requirements.
At the same time, we are mapping our farms to comply with the EU Deforestation Regulation (EUDR). We want to ensure full compliance with EU rules because Europe is our main export market.
The new EU organic rules no longer allow very large groups to be certified. How do you manage?
We obtained organic certification only last year and did not certify our entire group of over 18,000 members. To comply with the regulations, we started with a much smaller, targeted group of just 200 farmers, which is well below the 2,000-farmer threshold. We selected these farmers based on several criteria: those located in good buffer zones, away from horticulture farmers who might use agrochemicals, and those who are loyal to the organisation. Sometimes you invest in organic certification but farmers then sell their certified cocoa elsewhere. So we considered loyalty, share payment behaviour and location in the selection. This initial small number shows the huge gap and the potential for expansion. The organic production is sold to Silva Cacao, and we need to expand organic certification because the more certified farmers we have, the more organic volumes we can export.
We are also exploring Fairtrade certification because some buyers look for the combination of organic and Fairtrade. If TDC or Enabel can support us in that direction, it would be very helpful.
Are you in touch with ZOTO to help you in the fermentation process?
Yes, ZOTO has been our long-term partner since 2021. Zoi Papalexandratou works with us to design post-harvest protocols that improve fermentation and flavour profiles. After testing these protocols, we apply the most successful ones across our cooperative. Her expertise in post-harvest handling has contributed to making Ugandan cocoa more unique.
So you already have your flavour profile?
We have worked on flavour with ZOTO. Zoi helps us define the organoleptic profile through protocols. On the market, we have special cocoa products from these protocols such as Mwena, Mukali, Sente, Mpinduka, Sanduku and Hinduka. The naming of the cocoa brands is derived from local language in Bundibugyo. Fo rexample ’Mukali’ is exclusively produced by a group of women and the liquor flavors are spicy, herby, melon, rosewater and cashew. Each of the cocoa product is unique in its own way.
What are your primary goals for participating in Chocoa this year? Is this your first time?
This is our second time at Chocoa. Last year was more about knowledge acquisition on compliance with different certifications, such as EUDR and organic standards. We came to understand what steps to follow, who to connect with, and how to get certified. We obtained useful contacts and ultimately achieved certification.
We also wanted to better understand EUDR and market trends. With support from Trias, we started mapping our farmers for EUDR compliance. Not all farmers are mapped yet, but we began with the organic-certified farmers and shared their information.
What tools do you use to map farmers?
We use Kobo to collect GPS coordinates for farmers’ plots. Most of our members are smallholders farming less than four acres, and we map individual plots.
Another goal last year was to find buyers. We received many contract offers, but again the challenge is how to service them: it is difficult for us to buy the cocoa because of limited working capital. That remains our main challenge.
This year at Chocoa, we want to find ways to overcome this financial barrier: either by finding buyers who can pre-finance like Silva Cacao does, or by being linked to financing institutions that can pre-finance specific contracts. For example, if we have a contract for 100 metric tonnes, a financier could pre-finance that volume, we buy and export the cocoa, and then pay back the capital. This is one of our top priorities.
We also look for organisations that can strengthen our institutional capacity. We are still supported by Trias, but their resources target only part of our farmers. For example, they may work with around 1,000 farmers, while others receive no support. Our idea is that if Trias works with one group, another organization such as TDC works with another group, and yet another organization with a third group, we could reach more farmers.
Our region is prone to climate hazards, such as floods and landslides. We try to provide continuous coaching on climate-smart agriculture and good agronomic practices, but the outreach is still limited. We need more partners to expand these services.
What are the biggest challenges for the next two years?
Our main challenge is access to working capital to purchase cocoa from farmers and fulfil contracts. If we had sufficient financial capacity, we could address several other challenges.
Another challenge is the knowledge gap and illiteracy among members and within primary cooperatives. We work with over 100 primary cooperatives and see weaknesses in management and leadership. Some cooperatives start and collapse within three years due to poor management and governance.
We would like to harmonise these issues by strengthening primary cooperatives. When primary cooperatives are strong, Bwamba Cooperative Union is strong; if they are weak, the union will also struggle. Financial capacity is therefore crucial, along with the ability to keep up with evolving market trends and regulations.
We also want to develop a traceability system that can be used with all partners, rather than creating a new system for each buyer. We are aware there are many free tools developed by the United Nations for mapping, checking deforestation and sharing information on websites for buyers. Receiving information about such tools would be very useful.
Transportation of cocoa from the field is still a challenge, supporting Bwamba Cooperative Union with a truck/lorry would be much appreciated. For field extension work, strong motortocycles are needed since our cooperative is located in the mountainous areas. The impacts of climate change and extreme weather conditions have led to continuous floods and landslides especially in areas where we haven’t implemented climate-smart agricultural practices with TRIAS.
What major European market trends have you identified that could shape BCU’s future strategy?
First, Fairtrade and organic certifications are key trends because they come with premium prices and additional income for farmers. For each metric tonne sold under Fairtrade, there is a premium on top of the market price, and Fairtrade also guarantees a minimum price, which helps in periods of price fluctuation.
I have also heard a lot about environmental credits, such as carbon markets. We are already working on climate-smart agriculture and would like farmers to receive incentives for their efforts in conservation. For example, if a farmer plants 10 trees, what is the monetary value of the carbon they store? We are not yet connected to specific organisations on carbon markets, but this is an area we would like to explore.
We know that projects might need to be large, involving several cooperatives and chocolate makers, and possibly funded by the EU. We see that as ideal, particularly because Europe is our main market and we must comply with EU climate and sustainability expectations.
Have you had the chance to exchange information with other producers?
Yes, I have exchanged with organisations from the Dominican Republic, Ecuador, DRC and Nigeria. We share some common challenges. One recurring issue is financing. Another is emerging pests and diseases that are not yet well known.
We face similar new diseases in Uganda. Because we do organic farming, managing them is difficult: we cannot simply spray chemicals or use herbicides. At the moment, we do not even know the names of some of these diseases; they require scientific research.
We are in contact with the National Cocoa Research Institute, which is working on these issues. But research takes time, and meanwhile farmers continue to be affected.
Interacting with other farmers is also inspiring. I have seen cocoa beans from producers who use specific varieties or clones, while in our region we do not have single-variety plots: we have Trinitario, Forastero and hybrids all mixed on the same farms. At some point we would like to segregate varieties because some chocolate makers want specific types.
What key messages or lessons from Chocoa do you expect to share with your members?
The main message is that there are great opportunities at Chocoa. It is an excellent platform for networking and lobbying. Here I can have one-on-one meetings with people like you from the Trade for Development Centre, instead of only exchanging emails with people I have never met.
It is a place where conversations can turn into concrete business opportunities. We will emphasise to our members the importance of using such platforms to transform discussions into contracts.
Chocoa also encourages us to maintain high quality. When I see different origins and producers, it creates a sense of competition. If we do not produce the right quality, chocolate makers will choose other origins. This motivates us to keep improving quality.
Interview conducted by Samuel Poos, Project Manager at the Trade for Development Centre
