Kanyam Tea Cooperative, a successful small tea cooperative in Nepal Kanyam, was established 8 years ago, and has currently 135 members. It is one of the strongest member cooperatives of Central Tea Cooperatives Federation (CTCF) in East Nepal. Since two years they have their own tea processing unit, producing black orthodox tea. The small factory was financed by the cooperative (73%) and they took a soft loan (27%) from the cooperative bank. In 2015 they sold the whole production, 45.000 kg, to an Indian wholesaler. They are satisfied and want to expand the capacity of the processing plant, as they use it for 100%, and they can only process 50% of the produced green leaves. What cannot be processed is sold to nearby factories.
The cooperative has 135 members. With share capital (80,000 USD) and a loan from the cooperative bank (30,000 USD) the cooperative constructed this plant and started processing. Now they have 3 staff that look after the plant. They are the member of CTCF, the umbrella federation of tea cooperatives, receiving support from Agriterra since 2012. According to the chairman, Mr. Khem Pradan, CTCF is important as they support the members in establishing linkages with government, banks and other organisations. Secondly, CTCF provides services focusing on improved production and marketing. The recordkeeping training provided in 2015 is an example of a very useful training. The manager explains: “after participating in this ToT I have conduct a one day awareness training on the importance of recordkeeping to 20 lead farmers of my cooperative. When the tea season starts (April) we will start the record keeping. CTCF has produced a tea diary, and each individual farmer can use this to keep records. We will buy those diaries from CTCF. I will further coach the farmers in properly maintaining the records. It is good that we start doing this, so we know the cost of production and we know the real facts of our tea business”.
In order to further boost the tea business in this area, the cooperate is requesting CTCF for more marketing support, support in value addition so they can get better prices. Their dream is that CTCF is the one stop shop for buyers: CTCF collects all the tea of the cooperatives, ensures branding and marketing. And they add: “of course they would be willing to pay for such services!” So far they appreciate the support of CTCF especially in the area of making linkages with the government and for example the bank, it is enhancing their bargaining power. The chairman adds: we are very busy with the cooperative and it is really helpful that CTCF supports in making linkages and provides useful information”.
For now, the short term plans are to invest in additional machinery to produce green tea (requiring another fermentation process) so they can process more tea and diversify their market. Next year they will have to pay back the loan to the bank, so far they only paid the interest. It will be hard but they have to. This cooperative is an example of how a small cooperative makes steps forward, on its own, with backstopping support of CTCF. Step by step they are moving into a brighter future.
Agriterra’s role is to support CTCF in providing good services and doing effective lobby for the member cooperatives, with the aim to make a change in the life of the members of the cooperatives. And when the members see and feel the added value of the services provided by the federation, in return they will contribute contributing for such services as well.
One example is that primary cooperatives contribute 1% of the net profit to the federation, up to a fixed maximum amount. This cooperative has paid this maximum additional contribution to the CTCF, as their business is doing well now.
Bertken de Leede
