Dr Ian Clarke on Coffee Farming

#360Mentor is a continuation of the #40DayMentor series. In this episode, Robert Kabushenga (RK) speaks to Dr Ian Clarke (IC) on Coffee Farming.

RK: Welcome to #360Mentor Ian

IC: Thank you.

RK: Ian, one of the things you are known for is being versatile in terms of business and other things. You’ve written a column, been a Mayor, done philanthropy, run multiple businesses, what does it take to be somebody like that?

IC: A lot more passion, a long life and having the feeling that the environment you’re in is very okay. Before I came to Uganda in my 30s, I was an entrepreneur and I did different things too. But, I felt so comfortable here. I have done things that I thought would make my heart light and things that would contribute to the development of community and so on.

RK: Before we dive into our favourite conversation of coffee, there’s lots of young people and mid level professionals who listen to these spaces. And because of what has happened in the last two years, there is a lot of uncertainty and people are looking for answers, ways in which they can do better. You have succeeded at them. What are some of those principles that have taken you to where you are?

IC: Robert, you’re asking deep and very profound questions. Most of my life has been in the healthcare sector. I qualified as a doctor obviously. I must say that when I came to work in Luwero, I felt like I had come home. I was able to join my vocation in a situation where there was desperate need. I had to work with other people to make things happen. The first project that I did was Kiwoko Hospital. That was not done by Ian Clarke alone. It was done with the numerous people who lived there. Being able to work with the people who can be able to catch the vision and work with you to make things happen is really important.

RK: When did you first come to Uganda and how did you make that decision to come?

IC: This is ancient history, Robert. I was a GP (General Practitioner) in Ireland. I also had a furniture business. I’d run the business as I attended to my patients. And I got very busy but one day I asked myself, what’s this all about? I was busy and stressed and I asked myself, what difference am I making? I believe that all of us want to do something that is significant. Something purposeful. And that is what I found  when I came to uganda.

RK: There is something profound that you said to me when we were having a conversation at your farm last year and I haven’t forgotten it. You said, “if people think running a farm is very difficult, try running a hospital.” Tell me, why did you say that?

IC: Farming is easy. The point I was making there is, hospitals are all about life and death. We tend to take ourselves so seriously when we lose money or lose a crop, we think it’s life and death. But when you are actually looking after people’s life, it’s really life and death. It is a different matter. When I was building up IHK, it all ended with me. If someone made a  mistake it was my mistake. When a patient dies, you are affected. So I would definitely say running a farm is pretty easy compared to the stress and complexity of running a hospital.  Sudhir is one of the best businessmen here in this country, do you see him running a hospital? I don’t think so. I guess, even if he wanted to, he would ask someone else to do it for him. There are certain businesses which by their nature are emotionally demanding. Farming is a complicated business and there are a lot of things that can go wrong but sometimes you shouldn’t take yourself so seriously.

RK: At what point did you decide you’re going to become a coffee farmer?

IC: I actually never sat down and thought that now I’m going to become a coffee farmer. When I sold the majority shareholding in the hospital, I had some cash. At that point I decided that I would diversify and not have all my eggs in one basket. This was seven years ago. I was at that stage in my life where I looked at farming having grown up on a farm.

RK: Oh really?

IC: Yes. My father died when I was 9 and I spent many years then as a farmer. My mother kept the farm going until I passed my A levels and qualified to go for medicine. I think if I had failed to qualify to go for medicine, I could be a farmer today in Ireland. Yeah, so I have my roots in farming.

Robert, there is something very appealing about working on the land. Very appealing.

RK: And very fulfilling.

IC: Yes, as we speak, I am sitting outside on the veranda of my container house which looks over the farm.

RK: I am also sitting at my wooden cabin on the veranda overlooking the banana plantation. That makes two of us.

IC: For sure. The thing about farming is actually about land management. It’s like an artist who paints a picture and is able to create something. I think land management is a form of art because you are actually creating your own environment.

RK: Like a canvas.

IC: It is. And this land was scrubland and bush. And now it’s my canvas that I painted. I feel like I am reciting poetry about it.

RK: No. Not at all. You know people think that we are going mad when they see us enjoying the soils, they think we are living a bad life. They don’t know the poetry attached to it. So please recite the poetry Ian.

IC: When I was younger, I was a tree hugger. I like planting trees. We planted indigenous trees. I am always surprised when you plant seedlings and when you go back a year later, the things are growing. There is a river and other waterways that pass through my farm and I am conserving them and the entire ecosystem. I think it is wrong when farmers cut down everything but it is beautiful to see new life coming out of the land. And when you can make some money off it, the better.

RK: Ian, a lot of friends have been asking me, why coffee?

IC: First of all, coffee is an export crop. I think for Uganda, it has even a bigger market. You know if you don’t have a market, you are bound to struggle. For example, at the start, I grew red and green peppers in Bukasa and we took them to the supermarket and they told me they had their supplier. Then it also occurred to me that I could only supply for weeks. And that is so true for seasonal crops in Uganda. When you bring them on the market the prices go down. It’s such a fluctuating situation. It is not certain.

Yet we have fluctuations on the internations prices but there is a huge market there. It is not going away, there is more coffee being drunk in the world. And Uganda is becoming more established as far as coffee is concerned. I think the market is very important as far as coffee is concerned.

RK: And that market justifies entry into coffee?

IC: As a farmer I would say yes, I tried many other things. I have 1500 acres. First I tried maize. I still do but I now do it to feed my chicken. Unless you are in maize in a really big mechanised way, you’re not really going to compete and make money as far as I can see. The other thing I have seen is vanilla but the process of vanilla keeps fluctuating. I only do a little bit of it for demonstration purposes. It’s  a great idea for someone who has got a small amount of land. But even if prices fall, it is still a high commodity product.

RK: True. I think it just dropped from 250,000 a kilo to 50,000 a kilo but  still, if you gave me 50,000 or half of it for a kilo of coffee, I would be quite happy.

But for me, Ian, what drove me was the fact that I would be involved in growing a crop that would be exported. The value of that was way beyond everything else.

For a lot of people, the challenge is how do you start?

IC: In Uganda, almost everyone through their family has some land. And one of the good things about coffee is that someone can start with 5 acres or even an acre as long as it starts as a hobby not their livelihood then they can grow it into something that can fetch them some money.

Robert, you are a good example. You have built your farm over the years on the sideline and now you are at a point where it is a serious thing.

RK: Actually, Ian, it is now my full time job. That is all I do.

IC: The other thing is that you are a quick learner, Robert. Working on coffee is a steep working curve. You  need to learn agronomy, planting and  a whole bunch of stuff. And you need to be involved. You need to train your staff. You need to be checking on them.

What I have seen in Uganda, a lot of people own land but only travel there on weekends or when they have some time. But if you are going to do coffee properly, it is science. It’s logical. Coffee plants require certain things if you want to get the best prices.

RK: For someone sitting by the side doing the calculations. I usually tell my guys, if you want to succeed, you have to do it right at the beginning. Planting materials, field preparations and the knowledge you get beforehand. Do you want to say something about that?

IC: One of the things I found, clearing land for coffee is easier. If you are going to use a tractor to plant maize or potatoes, you need to get rid of tree stamps, stones and all those kinds of stuff. But when you are planting coffee, like I started out from a valley, when we planted, there were still tree stamps that were still there. But as long as you are planting your coffee 3*3, and you dig the right hole and turn over the soil, plant the coffee and keep removing the weeds, then you can keep on clearing. You don’t have to do everything at once. Of course you need to leave big trees for the shed. It’s quite doable really.

RK: I must let the guys here know that you must by all circumstances please do soil tests.

IC: Let me say this Robert, if I ask people about matooke, everyone grows matooke, people in Uganda love their matooke. But if I ask three different farmers on how to grow matooke, I would get three different answers. Everyone has their own opinion of how they grow their matooke. I even went to an agricultural centre and I found the guys there growing matooke are doing a wonderful job. It seems to last forever. But when you go to the ordinary farmer everybody is doing it differently. The question is who knows the science. Whereas with coffee, it is very well established. You need specific fertilisers, you need to keep pests under control, you need to keep the weeds down and all that stuff. You need to cut out the stems over and over. I now get 12 kilos of red cherries per tree.

RK: Then I am under performing, I need to pull up my socks.

IC: That’s an average of the trees of five to six years and prune at seven years.

RK: What are the rules governing the harvest of coffee?

IC: There is  the common practice of stripping coffee which many farmers do. See, most of our coffee is smallholder coffee. They don’t put very much into it and they don’t get very much out of it. They dry it poorly and in the end they get very poor coffee quality.

You must pick the red cherries deliberately.

RK: What are the numbers that people need to look at and tell whether it is worth doing the off or not?

IC: Let me start with the price of coffee, there are different prices of coffee. If you are growing Arabica on the slopes of Elgon or Rwenzori, you can look for micro markets for that.  You have the small rosteries. I was in Ireland and I bought 250 grams of coffee for 8 euros. And there they don’t understand coffee. Coffee is like wine. So a guy growing his Arabica will get a very good price for his coffee.

If you are a big Robusta and you can sell by container, you can sell directly to the exporters you want and get your best price. You can also sell to an agent or roaster.  You have to establish those pipelines.

The other thing is, there are some agents in Uganda, they are not exported but they take a commission to find you market. I have sold directly to people in the Netherlands but I have also sold to exporters here. I had a good relations with Superfina and they have given a premium on my washed Robusta but they are very keen on forward selling. Forward selling has both good and bad points.

I had coffee in my stores and then I wondered where is the market? I had to forward sell some of those containers and I had some money coming in. If you took the risk, you could get a higher amount for your coffee. If you are selling in tons and in 360 kilo bags, you are good to sell like that. If you are a smallholder farmer, there are people who consolidate containers, they can buy your coffee.

For one, I had found it to be a total waste to give UCDA samples to go look for the market, they just set them up on the counter and don’t do anything with them.

RK: Let me stay with you on this point, what do you think we could do to market our coffee? What are the simple things we could do to put it out there?

IC: UCDA should be able to create those kinds of opportunities for us on the world market. The embassies are also doing something. But recently, I have been building a coffee lodge on my farm since my farm is on hills and is very scenic. And that is largely to market my coffee. The whole idea of doing coffee tourism or agro tourism is that people are coming to Uganda to see the big 5 and so on. If there is a stop over where they can see coffee tourism, that would be very good. It has worked well in Columbia. At one conference one of the speakers with a coffee lodge was doing very good business on it by selling specialised coffee. That is one of the ways we improve on sales without having to depend on a national body.

RK: Many people say coffee growing is capital intensive, where do we get the capital to do this?

IC: It is going to be hard for anybody to start something by attracting funding. The stakes are high. When you get over the first three years, then you are in a better place to start attracting capital. We have the Uganda Development Bank. And they have the Agriculture Fund. I have been working with Pearl Capital Partners. They set up a fund to specifically support agribusiness in Uganda. Their initial investment was by the European Union. NSSF is also invested in that fund. There are other funds out there. But the thing is if you are going to help the poor, help them with development.

So after graduating from a startup phase, I got  financing from PCP. And I must say, it’s been useful financing for me. And it is debt financing.

RK: Let me welcome Tadeo Twahirwa (TT) from NSSF, Ian has said you have some ka-money, connect us to the money.

TT: NSSF came into partnership with the European Union and we put together a fund to a tune of USD 2 million. The EU matched that money and it is being managed by AMI trust. However, we are only giving that money to organised farmers. That is for the external funding.

We know that many of our customers are approaching the age of getting their money. We are giving out big money to many. When people like Ian share their stories, then people get insight and options of where they can put their money. All people who have big chunks of money and are approaching retirement can invest part of that money into agriculture. Like Ian has said, it is better to start small. And by the time we churn out your money, you still have an opportunity to multiply it. Then we can grow Uganda together.

RK: How do I become eligible for all these funds everywhere? How come nobody knows about these funds?

IC: Robert, you are a good example of someone who has started a business and given attention to it to grow. This makes you a good candidate to get some of the funding. The problem with bank financing is that the paying time is very long yet it may take you until like five years before you begin making money.

What I find in Uganda and all these coffee associations, everyone is desperate to get money. That is not true. The biggest challenge is the start-up phase. You need to be patient with yourself and come up with something then you can get some money.

RK: Twahirwa, I know you want to rebuild together, can I use my savings as a security to get fincianing from your partners?

TT: For now, the law we have in place does not allow us to do that. You can instead capitalise on what we are offering from. For example, we have concentrated the majority of our literature on helping our clients into various disciplines as they retire. That we can give for free. Knowledge is power.  

The other thing is the capital we have mobilised that is managed by ABI Trust is that the only thing that Ugandans need to do is to register their farms as running enterprises. People should go into agriculture as a clear career. For example, we need your presence in agriculture. No one is going to fund you, if you can’t give a valid preposition of what you are actually doing. But now Robert you can pitch your preposition on coffee and you get funding because you are sure of what you are doing.

So, first of all, formalise. Then seek knowledge you need in that area. Grow in that one area. Don’t be all over the place and then come to organisations like NSSF for guidance. It is important that in retirement you are not only working but also have sufficient income to sustain you in all other things because at that point you don’t need a lot.

RK: Ian, what are your thoughts on diversifying?

IC: I think it depends on the stage of your farming. If you are going into coffee farming, it is not bad to do intercropping especially when the coffee is still young. I talked about vanilla, you can go into vanilla because that will give you quick returns. But for me, when I was going into farming, there was no way I could have gone into coffee farming for the entire farm. That could have taken me a number of years. I first planted 500 acres of trees. Because while I was busy looking at how the coffee was growing, the trees were easy to look after.  So the trees become security for the borrowed money. There are pros and cons but I wouldn’t want to be all over the place.

I once met with a successful passion fruit farmer and I was moved to plant passion fruits as well. After like three years, they died out. When I asked, I was told there was a pest but no one had told me about it. For me that was a learning curve.

There can be a certain amount of diversification but not all over the place. It also took me time to figure out my focus. I was doing trees, maize and coffee. But now I know my focus.

RK: You know I had a similar experience. I began with matooke, coffee, mangoes and pawpaw. I thought I was being very clever but the coffee agronomist I brought around is the one that advised me.  

I chose matooke and coffee because they complement each other.

Ian, how do you go about structuring the farm? What measures do you put in place for effective management?

IC: That’s a good question Robert. For me, I found a good Kenyan farm manager who is very experienced in coffee. But if you are going to bring someone on the farm, you need someone who knows what they are doing and can manage the other farmers on the farm. Farm managers are not easy to get. There is a need to train these guys in farm management. We should also be looking towards having more collaborations with agricultural colleges.

On my farm I have like 50 full time workers. You have to be very organised in running a farm.

RK: Tadeo, why are you not proactive in making it more known that there is money that can benefit people?

TT: In fact, we are big on this. We are conducting financial literacy in clusters. People are choosing areas where they want to retire. Almost 60% of Ugandans want to retire in Agriculture. Those who choose agriculture tell us which area they want to be in. Once that is established, we get professionals in  that area who have succeeded to guide them on. It is those people who transit and we show them where they can get funding.

Richard Byarugaba: We have the fund that Ian talked about. It invests in your business as equity. It is not a grant, it is not a loan. It is an equity fund. In other words, you become equity holders in your business and that happens only after a thorough examination of the business.

As NSSF, we have our customers who save with us, those are the ones we are giving priority. The other programme is the HI Innovator which is in partnership with MasterCard Foundation. MasterCard invested to a tune of USD 5million. We are asking entrepreneurs to come and pitch their businesses to us. That money is there.

Comrade Otoa: What’s the quickest way to fundraise capital?

IC: It really depends on what the reasons are, and your size. NSSF is an option. I went for Pearl Capital because it is more structured for your time skill. But someone else can go to UDB.

Michael Ngabirano: Why are you exporting your coffee without adding value?

IC: I was in Ireland recently and everybody is doing micro roasting. Because of covid, you ring someone and have your coffee delivered at your doorstep. There are huge margins on it but it’s very micro. Secondly, people want their coffee fresh. They want it roasted today and delivered tomorrow. If you roast from Uganda, it’s good but it’s going to be a bit older. It’s harder to roast coffee in the country of origin and then expect that you will easily get a market in Ireland or somewhere. But also a container of roasted coffee is a lot of coffee. You would need a big enterprise to be able to do that.

My value addition is to wash the coffee.

Uganda needs to brand itself as the home for Robusta coffee. 80% of our coffee is robusta but because of poor agronomic practices, it’s not as good as it should be.

Michael Nkambo Mugerwa: Some colonial coffee varieties struggle to do well. The small leaved coffee struggles where the broad leaved thrives. Have you observed a similar thing?

IC: The process I use is one litre of water per kilo as opposed to the drizzle method. I also have an echo drier which uses 45 kilos of husks to do 15 tons of coffee. I also use a solar pump which I also find effective. I am aware of those things in terms of conservation.

RK: What I have picked from you Ian, is that I need to fast-forward my coffee lodge. Let me get work done on that almost immediately. I have been putting off my plans but I guess it’s’ time. Thank you very much for the time you have given us.

IC: It’s my pleasure, Robert

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