PRIME Minister Dr Mwigulu Nchemba has floated the possible issuance of an order for the sale or redistribution of assets belonging to the Kilimanjaro Native Cooperative Union (KNCU).

Addressing residents at Chekereni village in Moshi Rural District yesterday, the premier dwelt on the pressing issue of settling a 400m/- debt owed to members of Mwika Kinyamvuo Agricultural Marketing Co-operative Society (AMCOS).

The hint follows complaints by members of Mwika Kinyamvuo that KNCU has failed to remit payments for coffee delivered since 2023. Farmers say the prolonged delay has left them in financial distress despite having fulfilled their obligations.

The premier demanded clear timelines from the KNCU management as to when one of its assets would be sold and when outstanding payments will be made. “I want firm answers on when you will sell an asset and when the farmers will be paid. 

“If you fail to do so, on my next visit I will personally order that asset to be distributed to cooperative members,” he declared.

Delays in paying farmers undermine public trust in cooperative unions and erode confidence in government oversight, he said, noting that farmers delivered their coffee through KNCU as far back as 2023 but had so far received 90m/- from the total amount owed, nearly 500m/-.

“By failing to pay citizens, you are causing them to lose faith. You collected their coffee and now you propose to pay in instalments while you still own substantial assets. Sell those assets and pay the farmers what is due,” he specified.

Jacqueline Senzighe, the regional cooperatives registrar, will have to ensure that one of KNCU’s properties is identified and sold without delay to generate funds for immediate settlement of the debt, he directed.

Stressing that it was unacceptable for farmers to wait for several years while their grievances remained unresolved, the premier criticised leaders who ignore farmers’ concerns, as such inaction contributes to persistent poverty among rural producers.

The KNCU board needs to convene an urgent meeting and agree a clear resolution on the matter within a specified timeframe, in the wake of the complaints aired by, Glory Fatael, a resident of Msae Kinyamvuo village, stating that members have been waiting for up to five years for full payment, having sold 11,250 kilogrammes of coffee and remain unpaid.

KNCU was established in 1933 by local coffee farmers and is recognised as one of the oldest cooperative unions in East Africa. Its founding objective was to unite smallholder farmers in order to secure reliable markets, fair prices and access to agricultural inputs.

For decades, the union served as a pillar of the northern Tanzania coffee economy. However, in recent years it has faced mounting financial difficulties, market liberalisation pressures and internal management disputes that have weakened its operational stability, researchers assert.

Since the cooperative sector reforms of the 1990s, KNCU has struggled with debt burdens, declining coffee production and recurring payment disputes with affiliated primary societies, such that on several occasions, the government has intervened to mediate conflicts and restore stability within the union.

Mwika Kinyamvuo AMCOS is among the primary societies within the Moshi Rural coffee cooperative network, catering for Mwika and Kinyamvuo areas, where members channel their coffee through KNCU for processing and export marketing. 

The current dispute is understood to have stemmed from the 2021/22 coffee season, when a buyer’s contract reportedly collapsed, reducing anticipated revenue and triggering delayed payments to farmers.

Cooperative societies operate under the Cooperative Societies Act No. 6 of 2013 and the Cooperative Societies Regulations of 2015, where the registrar of cooperatives supervises operations, conducts inspections, suspends leaders and takes administrative measures where members’ interests are at risk.

By contrast, the coffee trade is governed by the Coffee Industry Act No. 23 of 2001 (as amended in 2009) under the oversight of the Tanzania Coffee Board, which regulates marketing, quality standards and export procedures, officials noted.