CIC Incentive Scheme

The Coffee Industry Corporation Incentive Scheme programs were established to target smallholder coffee farmers to facilitate access to credit. The programs currently under the scheme are:

• Coffee Guarantee Credit Scheme
• Freight Surety Scheme
• Farmer Group Marketing

Coffee Credit Guarantee Scheme

The Coffee Credit Guarantee Scheme (CCGS) was established to assist the underprivileged smallholder coffee growers to have access to creadit deemed necessary to acquire appropriate and much needed inputs to improve quality and increase production which would enable them to earn cash income in order to improve their living standards and meet the governments economic and social policy goals.

This scheme was initiated by the CIC and adopted by the Government due to its wider concept, because it has been realized that for a very long time smallholder farmers would continue to find it difficult to borrow from commercial banks because of the lack of collateral, conventional security and equity requirements by banks.

The scheme involved farmers’ applying for loans directly to the CIC and once reviewed and screened, loans with reasonable interest rates are then given to the farmer after an initial agreement is finalized. After coffee marketing the farmer then repaid the loan with the interest and keeps the rest of the earnings for their own use.

Freight Surety Scheme

The scheme was designed to assist the most remote and disadvantaged coffee growers accessible only by air. Freight rates were increasing rapidly as fuel prices and inflation increased. This coupled with lower coffee prices and increasing costs of production and processing as a result the remote people who depended entirely on air transport to
shift their produce, especially coffee, to the market were hard hit.

In this scheme, 100% freight cost is paid upfront by CIC to third
level airlines on behalf of farmers as a surety or guaranteed
payment under MOA arrangement. CIC also arranges the marketing
of their coffee. The 100% freight cost is than recouped by CIC at the point of sale and the balance paid to growers.

There are approximately 350 remote airstrips of which up to 140
are coffee growing airstrips with an estimate of 100,000 coffee
growers spreading throughout these airstrips. The airstrips are
serviced only by Twin Otter, Islander and Cesna 206 aircrafts.

Farmer Group Marketing

CIC developed a pilot project in which groups were formed to
facilitate the marketing of their coffee. This pilot project
involved three groups in the Eastern Highlands, Simbu and
Western Highlands provinces. This project will end in December
2008 so that the groups are expected to continue on there own.
The members of the marketing groups were mainly CCGS farmers.
The marketing groups involved in the project are:

• Simbu CCGS Farmers Cooperative Ltd
• Western Highlands CCGS Farmers Ltd
• Eastern Highlands CCGS Farmers Cooprative Ltd

 

 

Updated: May 16, 2010