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Govt appreciates CRDB role in coffee industry
2006-04-15 09:00:31
By Deogratius Kiduduye, PST Mbeya
The government is monitoring closely moves that aim at strengthening the existing good relationship between the CRDB Bank Ltd and coffee stakeholders in the country, because of the bank’s important role towards poverty reduction.
This remarks were given by the Deputy Minister for Agriculture, Food and Cooperatives, Hezekiah Chibulunje when he officiated the closing ceremony of CRDB Bank’s Coffee stakeholders forum at the Benjamin William Mkapa multi-purpose conference hall here yesterday.
He noted that the coffee industry remains the country’s economic pillar as many families’ survival depend on it in such regions as Kagera, Kilimanjaro, Mbeya, Ruvuma and partly in Mara and Kigoma regions.
Said he: ’The government expects that the outcome of this forum will further improve the business relationship between the two sides for the economic well-being of the nation.’
He also advised the bank to expand its services to support farmers to engage in irrigation farming that will alleviate food shortages resulting from insufficient rains.
Chibulunje called for coffee stakeholders and especially exporters an seek CRDB Bank’s services, notably the Price Risk Management product, which, in collaboration with the World Bank ensures stability from world market price fluctuations.
On his part, CRDB Bank’s Director of Treasury said the Price Risk Management product or ’Kinga ya Bei’ or KYB offers an opportunity for coffee farmers, buyers and exporters to hedge against price risk for their physical products through the world financial markets.
He said the impact of price risk on the coffee sector include price volatility where buyers are forced to lower their buying prices to farmers to protect against risk.
’As a result, farmers are unable to buy farm inputs, food or pay school fees and medical expenses, while bank loans defaults,’ he said, adding that financially the situation also leads to weaknesses and losses to the sector culminating to poor economic performance and eventually plummeting living standards.
He said the bank’s interest in risk management is to protect its loan portfolio as well as its customers, aimed at contributing to the nation’s economic growth thus supporting the government’s poverty eradication efforts by improving the standard of living of farmers.
In his closing remarks, the bank’s Deputy Director, Jens Ole Pedersen said the bank would take the recommendations of the coffee stakeholders seriously to further improve its services and support to the coffee sector.
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