Acting General Manager of KNCU, Kakozi Ibrahim said in an interview that KNCU is expecting to collect the amount as an accumulation of unpaid rents for long time. “This operation is for customers who haven’t paid rents for long time and a grace period which was given has been expired,” he said, adding that some of the KNCU customers haven’t paid a single cent for the past 30 years.
In the operation, the oldest farmers’ union is working closely with the Arusha-based Mangwembe Auction Mart and Company Limited. Ibrahim said the operation will go on for up to six months.
Among other issues, the collected amount will be used to refurbish some of cooperative union’s buildings and facilities.
Meanwhile, the Managing director for Mangwembe Auction Mart, John Mshana, said: “We have entered a six-month agreement with KNCU to collect the overwhelmed debts from their customers amounting to 200m/-.”
Located in Moshi, KNCU is a cooperative federation in Tanzania and the oldest cooperative in Africa founded in 1930 by Charles Dundas. It is owned by the farmers of the 90 primary cooperative societies which buy coffee from farmers in Kilimanjaro. KNCU flourished in the 1950s and 1960s and drove much of the development of the Kilimanjaro region. In 1977 it was nationalised by the government. This act was reversed in 1984 and KNCU became independent again, although subject to government control of their buying and marketing. Since then, the primary co-operatives and their union have gradually won back their independence. The liberalisation of the coffee industry in the early 1990s saw private companies competing with the cooperatives to buy coffee from their members. Many cooperatives in Tanzania died. KNCU initially lost 80% of its market and struggled for four years. Since 1998, it has steadily won back market share and is now the largest buyer of Kilimanjaro smallholder coffee.